The Legacy of Eiji Toyoda

Photograph by Paul Sakuma/AP Photo

Eiji Toyoda died on Tuesday at the age of 100, almost 30 years after retiring from active management of Toyota Motor. Like Alfred Sloan and Henry Ford before him, Toyoda was an engineer whose vision dominated the company in its formative years and beyond. He transformed Toyota into a global powerhouse with management and manufacturing processes that transcended the auto industry. Where would we be without kanban, kaizen, muda, and keiretsu, as well as acronyms like JIT (just in time), TQC (total quality control), ZD (zero defects), and TPS (Toyota Production System)?

Although Taiichi Ohno is known as the father of the Toyota Production System, Toyoda probably deserves more credit for its development. He encouraged his team to learn from W. Edwards Deming, to study the Ford production system, and to use data to refine manufacturing processes. Toyoda was known as a good listener and someone who wanted to hear the suggestions and opinions of the very capable team he built around him. He understood that international success would come with affordable and durable cars, and under his direction, Toyota developed the Corolla, a name Toyoda personally selected, and the Camry. Later he pushed Toyota into the luxury-car sector.

At Toyoda’s insistence, the company took its first, hesitant steps to produce cars outside Japan. Toyota didn’t know if its production system could be replicated overseas, and it was cautious to commit, even after Honda Motor and Nissan Motor were building cars in the U.S. Toyoda’s answer was a joint venture with General Motors, a decision that was not enthusiastically embraced within Toyota, but once his mind was made up, there was no changing it (nor would anyone try).

Toyoda challenged his management team to forge the agreement with GM and to accept GM’s closed Fremont (Calif.) assembly plant as the production site. Fremont was notorious for inferior quality and poor labor relations, which Toyoda saw as an opportunity. If they could succeed there, they could succeed on their own anywhere, he told executives. Although Toyota used GM’s bankruptcy to terminate joint production at Fremont in 2010, the company gained immeasurably from the experience. It learned how to manage a Western workforce and a long-distance supply chain without giving up the important elements of its production system. The most advanced product in the plant was probably an electric typewriter, and even without automation, Toyota was able to build cars in fewer person-hours than GM, and with quality comparable to Japan.

In reaching decisions, the only things that mattered to Eiji Toyoda were genba—production site or factory—and genbutsu—products. He always retained his love of manufacturing and took great pleasure in visiting Toyota assembly plants and those of the competition. He could stand in the middle of a plant and listen; by the sound alone, he could judge how well it was operating.