Toyota wants more kaizen in its r&d

TOKYO -- For five years as Toyota's global manufacturing boss, the quest for kaizen -- or continuous improvement -- was the mantra for Takeshi Uchiyamada. But when he became chief of r&d last year, he found operations there strangely stagnant.

"On the front lines of manufacturing, improving efficiency is a daily activity," Uchiyamada said. "Then I came to research and development and found that nothing similar was being done."

Now the hard-charging Uchiyamada, revered internally as the father of the Prius hybrid, wants to shake up his new portfolio -- streamline product development, boost quality and promote new technologies. The goal, he said, is a 30 percent jump in r&d efficiency by 2012 from 2009 levels.

"Simply put, with the existing manpower, we will get 30 percent more development," Uchiyamada said.

The newfound productivity will be channeled into more than gasoline-electric hybrid vehicles. High on Uchiyamada's to-do list is overhauling Toyota's traditional engine lineup, with a focus on improving mileage by using turbochargers and direct fuel injection in smaller cars.

Uchiyamada said the industry's recent slump actually provides a perfect opportunity to take stock and reinvent the way Toyota Motor Corp. develops cars.

"Vehicle sales are much slower than expected," Uchiyamada, 64, said in a recent interview. "Therefore, to a certain extent we can do away with development of new vehicles. Using that extra latitude, we can now engage in activities aimed at improving r&d productivity."

The heightened priority on r&d highlights a key step that the world's biggest automaker is taking to differentiate its products and recover from the recall of 15 million vehicles in the past year. Lapses in product development are a root cause of Toyota's current quality crisis. As the carmaker chased volume to match expanding demand, engineers were stretched too thin.

Uchiyamada envisions the following improvements:

-- Changing the way engineers do their work.

-- Overhauling the vehicle design process.

-- Mechanizing some steps to save time and manpower.

The moves could free up resources to handle more development work in-house. Before the crisis, Toyota was outsourcing 30 percent of its global engineering, says Robert Cole, a business professor at the University of California at Berkeley who studies Toyota.

"What they did was rapidly expand the hiring of a large number of inexperienced contract engineers," Cole said. "When you start hiring a lot of outsiders, there is a lot of miscommunication; sometimes you make bad judgments. There is ample room for error."

Toyota's January recall of millions of vehicles to fix sticky gas pedals underscored such risks. Toyota outlined the specifications for the part -- one outside supplier engineered a problem-free pedal used in some cars, but another came up with a different design that triggered the recall.

Toyota is already adding four weeks to the development cycle to better vet its products.

In terms of new product, Uchiyamada eyes fuel efficiency -- both in terms of more hybrid offerings and in the addition of turbochargers and direct fuel injection to gas engines.

Toyota will need the new technologies to stay ahead of competition from rivals such as South Korea's Hyundai Motor Co., which is trying to become a green-car leader.

But it is a tall order to balance those needs against the pressure to spend more time on quality -- all the while trying to cut costs to offset the yen's surging exchange rate.

Uchiyamada, who joined Toyota in 1969, is candid about the challenge: "I'm sure there must have been harder times than this for the company. But this is the toughest since I've joined."