What Toyota’s success can tell the service provider

With the recent announcements that two of the Big Three North American auto makers are making deep cuts in vehicle production and Ontario reeling from the news that General Motors will close its truck assembly plant in Oshawa, Ont., what is striking is the rationale given for the shutdowns and cutbacks. Somehow, it seems, corporate management was taken by surprise that North American drivers were abandoning large trucks, SUVs and Hummers in the wake of gas hitting $1.30 or more a litre in Canada and $4 a gallon in the United States. Others added high commodity prices were also cutting into profits and increasing the production costs of these large vehicles.

What strikes me about the explanations given is the unspoken suggestion these changes to the economy and people’s buying habits all happened overnight. There is only one problem with that. Anyone who has been paying attention to the markets would have realized high gas and commodity prices have been a fact of manufacturing for some time, as well as the changing buying habits of North American car buyers. I believe many thought these changes were either going to be temporary, or people would simply bite the proverbial bullet over increasing gas prices and continue to buy large, gas-hungry vehicles because drivers liked big cars and trucks. Now the North American auto giants are scrambling to bring out smaller, more fuel-efficient vehicles to meet the changes in the market, and looking for new ways to make and sell those vehicles to consumers.

To get an idea of how they might do this, and what lessons service providers can learn as well, let’s have a closer look at Toyota. Toyota is now one of the most profitable auto companies operating today and more innovative as well. The New Yorker in mid-May had short, but informative article on Toyota’s innovative management philosophy and how it has contributed to its success. Where Toyota succeeds is by focusing on constant improvements to its operations, looking for ways to be more efficient and encouraging workers to be on the lookout for ways to keep things moving forward.

Too often, when times get tough, it’s easy to blame outside forces for difficulties. Instead of bemoaning high fuel costs, a slow economy and changing consumer spending habits, why not, like Toyota, look for ways to improve the business. Focus on improving cost efficiencies, charging what it really costs for a job instead of deep discounting and thereby cutting into revenues and profits, and finally engaging employees to come up with ways to improve the operations and profitability. Toyota receives some one million new ideas from employees each year, many of which are simple suggestions such as making parts easier to reach and thereby improving overall efficiency. Shop employees likely have hundreds of simple suggestions that if followed would help a shop be more efficient, profitable and more fun to work for.

Starting with this issue of SSGM, you will notice that we are asking for your input on articles and editorials. If success comes from being open to other’s suggestions and knowledge, well we want to hear from you. Maybe you have a solution to a technical problem we have written about, some experience that illuminates a tricky diagnostic problem we touched upon, or you have comments about something I, J. D. Ney or Jim Anderton has written. We want to know. As well, we want you send us the questions you have always wanted to ask industry experts. We will take those questions and pose them to the experts and publish their answers. By having our reader’s input, we can improve SSGM for everyone and continue to make the magazine the first choice of Canadian service providers.

Do you agree? Disagree? Let us know! letterstotheeditor@ssgm.com