By Somali K Chakrabarti
Problems are only opportunities in work clothes! ~ Henry J. Kaiser.
This comment from Kokila on my post ‘Being Unreasonable may lead to Innovation’ triggered the thought for this writeup.
We often whine about the no of problems that surround us and the difficulties that we face in our day to day lives. But then there are those who persevere under trying circumstance and turn the constraints into opportunities.
Here’s the story of Toyota, a business that emerged successfully out of severe constraints during its formative years, guided by people who sought new perspectives to look at problems and worked around the constraints.
Japan in the Post World War II era
Japan, as we know today is one of the most advanced industrialized countries in the world. But it wasn’t always so.
Sixty years back, it would have been impossible to imagine that Japan would reconstruct itself as one of the most developed and technologically advanced nations in the world.
The end of the World War II in 1945, with the unconditional surrender of Japan to the Allies, had left Japan in a devastated condition. The country faced an acute shortage of food, most of the large cities were severely damaged, and the industries and the transportation networks were impaired.
These factors coupled with the restrained amount of land and natural resources, left the citizens with limited opportunities.
But the lack of opportunities did not deter the Japanese. In those hard times, the creative minds came up with innovations to produce state-of-the-art automobiles that would appeal to the customers worldwide. Here I take up the story of Toyota.
Formed by Kiichiro Toyoda, as an offshoot of his father’s spinning and Weaving Company. Toyota Motor Company, started operations in 1935, with the launch of A1, prototype passenger car.
When World War II ended, the economy was in shambles. Toyota that had primarily produced trucks for the military during the war period, now had to shift focus towards post war vehicles. Toyota’s biggest crises came about five years later in the form of financial and labor crisis in 1949-1950.
By 1949, raw materials and goods of all kinds were still in short supply. Prices were going up. Inflation had reduced consumer demand and dried up the supply of credit. Toyota’s financial situation deteriorated rapidly, and the management decided to reduce staff.
Toyota’s labor union went on strike in April of 1949 over impending layoffs. After long and bitter negotiations, management and labor agreed to reduce the workforce from 8,000 to 6,000 employees.
Seeking New Perspectives
After the strike, two of the company’s new executives, Eiji Toyoda and Shoichi Saito, visited the United States to seek new ideas.
Looking at the Just In Time approach used in US supermarkets to stock the items needed by their customers for just the right amount of time and in the quantity needed, Eiji Toyoda conceived the conceived the concept of Kanban.
Taiichi Ohno (a former Toyota vice president), applied the Kanban concept to Toyota production system. By reducing excess inventory and supplying “what is needed, when it is needed, and in the amount needed” according to production plan helped to eliminate waste, inconsistencies, and unreasonable requirements, resulting in improved productivity. Further process and technical innovations followed and Toyota emerged as a global carmaker.
But more than anything else, the crisis led to a paradigm shift about the role of people in Toyota’s operations and it changed Toyota’s approach to employees, with the company giving priority to ensuring stable employment for its employees and improving labor conditions.
The Toyota story reminds us of the importance of a positive outlook and a ‘Never Give Up’ approach in life.
When life puts you in tough situations don’t say “WHY ME?”, just say “TRY ME“
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