After riding through a time of economic turmoil in the late 2000s, Toyota has indicated in recent press statements the importance of becoming a company that can achieve “sustainable growth” beyond growth in only volume. For Toyota, what is necessary for “sustainable growth” and what efforts are being made to attain this goal?
Toyota has three main goals as part of making a proactive investment for sustainable growth. The first is to become a company that is capable of making steady progress toward the creation of “Always Better Cars.” For instance, we will promote TNGA (Toyota New Global Architecture), launched in 2015, even further. The second goal is to sow the seeds for growth in both existing automotive fields and in fields beyond the conventional boundaries of our business as a challenge for the future. The third is to build a strong business and financial foundation to realize the previous two goals. We consider it particularly important to strengthen our business foundation as an initiative to sustain not only present Toyota but also future Toyota from a mid-to-long term perspective.
Please explain your efforts for TNGA in more detail.
TNGA, Toyota New Global Architecture
Amid quantitative sales expansion in recent years, we have faced new challenges to our existing individual model-optimized development and production approaches. In response, Toyota has undergone structural reorganization known as TNGA.TNGA is an integrative framework inclusive of planning, purchasing and production, designed to deliver “Always Better Cars” to customers. TNGA consists of three operational steps. The first is to improve the vehicles themselves and enhance the emotional appeal of eye-catching style and “fun to drive” as well as the rational appeal of excellent functionality. The second is grouping development, which enables “smart sharing” of parts and components across different models. This achieves both individual and overall optimization at a high level. The third is “smart Monozukuri (manufacturing)” in which TMC and suppliers work as one to eliminate waste from the planning and development process. By accelerating these three operational steps, we deliver “Always Better Cars” to customers.
In the time of rapid change in social structures and environment, and with the ever-accelerating progress and complexity of technological innovation, what is Toyota’s position on the future investment for “sustainable growth” and car mobility?
Gill A. Pratt, Chief Executive Officer, Toyota Research Institute Inc. / Akio Toyoda, President, Toyota Motor Corporation Inc.
Since its foundation, Toyota has continually undertaken constant challenges and innovation, an effort grounded in Toyota’s founding principle of contributing to society by making automobiles. Our living environment has been changing at an unprecedented speed. Even under such challenging conditions, Toyota strives to realize a sustainable mobility society by combining cutting edge technologies such as AI, and big data with our technological competence and insights that Toyota has acquired through Monozukuri (manufacturing).
For example, Toyota is developing AI-led automated driving on general roads, which requires greater technical intricacy than for dedicated highways. Toyota established the Toyota Research Institute (TRI) in California in January 2016 to accelerate AI Research & Development. TRI focuses on researching AI technology that partners with people – vehicles that causes no accidents, mobility that brings freedom of movement to all, and partner robots to improve the quality of life of senior citizens, etc. Technology for finding new materials, and development of production management systems have also been brought into their research scope.
Toyota is also working on utilizing big data. AI actively learns from Toyota’s data accumulated through driving tests and the enormous volume of data collected from connected Toyota cars driving in a variety of conditions all over the world, and in turn all Toyota connected cars receive this learning data. Data of “near-miss” incidents around the world is converted into “empirical knowledge,” which reproduces high-quality and experienced driving performance.
Mobility Teammate Concept
What are your efforts for “sustainable growth” as an organization?
Toyota made substantial changes to its structure in April 2016. Now that annual global sales have passed the10 million units mark, it is often the case that Toyota undertakes a long consensus-building process prior to decision-making. Meanwhile, business alliances with other auto-makers have offered Toyota plentiful opportunities to learn skills, passion, and a sense of speed to produce automobiles and also to review Toyota itself.
The organizational change introduced product-based in-house companies to scale down organizational units. The change also arranged an organization that is able to accelerate development of cutting-edge technology and the creation of new value.
As suggested earlier, the organizational change aims at speedier decision-making and a cross-sectional way of working. In addition, Toyota targets the development of human resources assuming responsibility for future Toyota. The larger a company organization becomes, the less people working there have a sense of ownership and are active in challenging themselves. The in-house companies make each organizational unit like a “compact Toyota,” which transforms the company into one where Toyota employees can challenge themselves to initiate something more easily and feel their growth first hand.
Toyota Environmental Challenge 2050
In October 2015, amid larger impact of Toyota on the world, we formulated and announced the Toyota Environmental Challenge 2050. Our ideal goal has grown higher from “Toyota’s presence will not impact environment” to “Toyota’s presence will have a positive impact on the environment.” We are going further with an aim to establish a future society in harmony with nature. To achieve towards 2050, Toyota is addressing or is going to address 6 challenges. First 3 challenges are aiming to reduce the environmental impact of automobiles as close to zero as possible. 1) New Vehicle Zero CO2 Emissions Challenge 2) Life Cycle Zero CO2 Emissions Challenge 3) Plant Zero CO2 Emissions Challenge.
However those are not the only environmental challenges Toyota takes on. Toyota has moved itself one step forward and upgraded its goal to roll out new initiatives towards a sustainable society looking to a positive impact on the earth and society. Here are three specific challenges to achieve this world: 4) Challenge of Minimizing and Optimizing Water Usage 5) Challenge of Establishing a Recycling-based Society and Systems 6) Challenge of Establishing a Future Society in Harmony with Nature.
The keys to success are to reverse ways of thinking, “to make the impossible possible” and “breakthrough technology.” We will never change this basic stance.
“Do what should be done instead of doing what is possible.” This spirit of challenge that stands up to innovation is the Toyota’s DNA. We wish to continue to be a company that creates a desirable future with our stakeholders and brings smiles to our customers and society.