Case Study

Toyota´s New Camry: „Global Best, Local Best“

At the beginning of 2002 Kenichiro Fuse is appointed by Toyota as chief engineer and leader of one of the most ambitious projects: the global launch of the new Camry. Innovation projects are always led by chief engineers at Toyota. They not only have the role of a project manager but also of a project leader and a technical system integrator. The chief engineer is responsible for the definition of the vehicle concept, and for this he collects rich input from all the relevant functions ranging from Marketing to Production in the so-called nemawashi process. And difficult technical decisions which emerge during the innovation process are also taken by the chief engineer. A Toyota chief engineer has only six to ten employees directly reporting to him. All the other members of his innovation team have been made available by the functions on a temporary basis and for this project only, and they report to him only via a “dotted line”. Several chief engineers have acquired an outstanding reputation and nearly a legendary status as heroes in the Toyota organization thanks to the projects they have led. Examples are Ichiro Suzuki who achieved market leadership for the Lexus in the US luxury car segment within a short time span from nowhere, or Takeshi Uchiyamada who launched the revolutionary Prius with a hybrid engine in record time.
Besides the Corolla and the Yaris the Camry is one of three world car brands that Toyota owns. It is being sold in more than 100 countries and regions, amongst others in the USA, Canada, Australia, Europe, the Middle East and Asia. Since the end of the 90s the Camry is the best-selling passenger car in the USA. The original launch year of the Camry was 1980. The new Camry which is now slated for a global launch is the sixth generation.
Kenichiro Fuse´s Camry team sets itself a challenging objective at the very start: „Global best, local best“. With this it tries to achieve two goals which appear irreconcilable. On the one hand the new Camry shall be produced worldwide, and it is expected to become the best world car from a quality and cost-performance perspective. On the other hand it must fulfil the needs and appeal to the values of the local customers in various regions.
The exploration of the needs and values of these customers is at the very top of the agenda of the Camry team. Given the overarching importance of the American market Fuse sends a sub-team to the USA so that they get to know and understand local consumers at the source. The chartered team is comprehensive. Not only marketing people and product planners belong to it but also technical specialists and designers. The idea is that they develop and bring home a common impression of the local needs. 32 American families in six different cities are being visited. One of the collected consumer insights is that the American customer regards the current Camry as a super car but does not find it very exciting.
This is important input for the vehicle planning discussions which start in the autumn of 2002. The Camry team decides that the new Camry should exude youthful strength. “Rejuvenation” is the design motto. The new Camry is expected to have an athletic and modern look.
As far as the technology is concerned, the new Camry shall receive Toyota´s latest technologies. Apart from an improved suspension this implies a new braking system, a new V6 engine and a newly developed six-speed automatic transmission. A new body construction will better protect the passengers against lateral collisions. And above all, the new Camry shall have a hybrid variant with Toyota´s hybrid engine built in.
The Camry team is set up as a global team true to its aspiration of launching a genuine world car. To steer the Camry project Fuse uses an obeya or large room as an organizational tool. Since the introduction of the Prius obeyas are best practice at Toyota. It enables the team members to hold regular face-to-face meetings and to work efficiently. Every day the members of the Camry team meet in the obeya in order to coordinate their plans, to solve problems and to control the progress of their project. This meeting room is reserved for the Camry team. The team members hang detailed drawings and process plans on the walls, and they can leave them there knowing that the confidentiality is not endangered. Due to the global scope of the Camry project there of course is not only one obeya. Apart from the central obeya at Toyota´s headquarters in Toyota City there is one obeya each at the production locations in the US, in Australia and in Asia. All obeyas are closely linked to each other. Information such as meeting minutes are shared nearly in real time between the central and the local teams. In addition worldwide meetings are held on a regular basis. At least every three months representatives of all teams meet in global milestone meetings in order to report on the project progress and to discuss solutions to problems that have emerged. This fosters the cohesion of the Camry team, and helps create a global team spirit.
Toyota is known for massing the deployment of cross-functional resources at the start of the innovation process when the technical drawings are done and various designs are discussed. In this early kentou phase of product development engineers of the most varied disciplines including production engineers and representatives of the purchasing function are invited to the design review meetings in order to vet the different design proposals for feasibility and technical implications, and, if needed, to modify them accordingly together with the designers.
The Camry team decides to skip the development of a prototype vehicle. With the help of the simulation technology of digital engineering highly advanced technical master drawings shall be done, and on their basis a highly finished performance confirmation vehicle shall be assembled from actual components straight-away. After finishing these technical master drawings no further design change will be permitted. The finalization of the master drawings replaces the traditional clay model whose finalization in the past signalled that no further design modifications were allowed (so-called „clay model freeze“). Any later design change would be much too costly. The technical master drawings of the new Camry need the approval of the production managers of all Camry plants worldwide, and of the suppliers. Thanks to their early involvement in the design review meetings emerging problems can be solved early on, and their solutions can then be immediately reflected in the technical master drawings.
Once the master drawings are finalized the mass production trial, the so-called pilot production, can start. Representatives of the different Camry plants worldwide meet at the Motomachi Plant in Toyota City in order to jointly assemble the new car. For a multitude of emerging problems global solutions are developed on the spot. All Camry production lines worldwide are converted to the new Camry simultaneously.
At the beginning of 2006 the new Camry is launched worldwide. Sales develop to Toyota´s full satisfaction. In particular the higher share of young American buyers which jumps from 17% to 26% proves that the new Camry design is well accepted. Also in 2006 the Camry retains the title of the best-selling passenger car in the USA. Motor Trend names the new Camry as the “2007 Car of the Year”.

Sources:

  • Morgan JM, Liker JK (2006) The Toyota Product Development System. Integrating People, Process, and Technology, Productivity Press, New York
  • Liker JK (2003) The Toyota Way. 14 Management Principles from the World’s Greatest Manufacturer. McGraw-Hill, New York et al.
  • May ME (2007) The Elegant Solution. Toyota’s Formula for Mastering Innovation. Free Press, New York et al.
  • Toyota Annual Reports 2006 and 2007

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