𝗧𝗼𝘆𝗼𝘁𝗮’𝘀 𝗛𝗶𝗱𝗱𝗲𝗻 𝗦𝘁𝗿𝗲𝗻𝗴𝘁𝗵: 𝟵𝟱% 𝗼𝗳 𝗣𝗿𝗼𝗳𝗶𝘁𝘀 𝗗𝗲𝘀𝗶𝗴𝗻𝗲𝗱 𝗶𝗻 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁

Why can’t other automakers surpass Toyota despite mastering its production system?

Since 1980s, manufacturers worldwide have benchmarked Toyota Production System (TPS). Production lead times now match Toyota’s, and TPS elements became global standards.
Yet Toyota maintains overwhelming advantage. Why?

𝗦𝗮𝗸𝗮𝗶’𝘀 𝗕𝗿𝗲𝗮𝗸𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝗗𝗶𝘀𝗰𝗼𝘃𝗲𝗿𝘆
Takao Sakai reveals:
“95% 𝘰𝘧 𝘛𝘰𝘺𝘰𝘵𝘢’𝘴 𝘱𝘳𝘰𝘧𝘪𝘵𝘴 𝘢𝘳𝘦 𝘥𝘦𝘵𝘦𝘳𝘮𝘪𝘯𝘦𝘥 𝘪𝘯 𝘵𝘩𝘦 𝘱𝘳𝘰𝘥𝘶𝘤𝘵 𝘥𝘦𝘷𝘦𝘭𝘰𝘱𝘮𝘦𝘯𝘵 𝘱𝘩𝘢𝘴𝘦, 𝘯𝘰𝘵 𝘱𝘳𝘰𝘥𝘶𝘤𝘵𝘪𝘰𝘯.”

This challenges everything we thought about Toyota’s success.
Toyota’s philosophy: “𝗽𝗿𝗼𝗱𝘂𝗰𝗶𝗻𝗴 𝘀𝗲𝗹𝗹𝗮𝗯𝗹𝗲 𝗽𝗿𝗼𝗱𝘂𝗰𝘁𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗿𝗶𝗴𝗵𝘁 𝗼𝗿𝗱𝗲𝗿, 𝗾𝘂𝗮𝗻𝘁𝗶𝘁𝘆, 𝘁𝗶𝗺𝗶𝗻𝗴.”

-𝗧𝗣𝗗 (𝗧𝗼𝘆𝗼𝘁𝗮 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁) creates “sellable products”
-𝗧𝗣𝗦 handles “producing efficiently”

Since 1970, TPD’s profit contribution exceeded TPS. By late 1980s, Toyota achieved 48-month development lead times—12 months shorter than competitors, developing twice as many models with half the engineering hours. The Prius’s 12-month development exemplified this mastery.

𝗧𝗵𝗲 𝟵𝟱% 𝗥𝘂𝗹𝗲: 𝗗𝗲𝘀𝗶𝗴𝗻 𝗗𝗲𝘁𝗲𝗿𝗺𝗶𝗻𝗲𝘀 𝗘𝘃𝗲𝗿𝘆𝘁𝗵𝗶𝗻𝗴
Toyota’s Chief Engineers are “product presidents” responsible for consumer value, profit margins, and the technology to realize both—like Steve Jobs, designers in the broadest sense.

Sakai’s key insight:
Value and cost are determined in early design stages. Later changes become impossible—like changing Christmas dinner after chopping ingredients.

Companies like Sharp (acquired by Foxconn) and Toshiba (accounting scandals) lost humility to learn, mirroring American auto industry’s decline. Jeffrey Liker identified Toyota’s advantage: treating development as a standardized process with PDCA cycles and waste elimination.

𝗧𝗵𝗲 𝗨𝗹𝘁𝗶𝗺𝗮𝘁𝗲 𝗟𝗲𝘀𝘀𝗼𝗻
Prius chief engineer Takeshi Uchiyamada brought all teams together in “Obeya” for transparency and speed—contributing to 12-month development success.

Old Mikawa* saying: “Making things that don’t sell is a crime.”

𝗦𝗮𝗸𝗮𝗶’𝘀 𝗰𝗼𝗻𝗰𝗹𝘂𝘀𝗶𝗼𝗻:
𝗧𝗣𝗦 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗧𝗣𝗗 𝗹𝗲𝗮𝗱𝘀 𝗻𝗼𝘄𝗵𝗲𝗿𝗲. When 95% of profits are determined before production begins, real competitive advantage lies in superior product development systems, not manufacturing efficiency.

𝗤𝘂𝗲𝘀𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝗿𝗲𝗳𝗹𝗲𝗰𝘁𝗶𝗼𝗻:
-What percentage of your organization’s resources and leadership attention goes to product development versus production optimization?
-Are you designing tomorrow’s success or just perfecting yesterday’s processes?

*Mikawa: historical region in eastern Aichi Prefecture where Toyota is headquartered