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The point of the "profitable mechanism" is in product development.

To date, Toyota has been making a profit every year.

The Toyota Production System (TPS) has an overwhelming power to reduce costs, as the media calls it a "household art."

If it is overwhelming power, the cost price should be zero someday if you have been making it for decades. But costs are still incurred.

As I explained several times in this blog,

"Profit" = "Sales"-"Cost"

If you think about this calmly, it's easy to see that it's not easy to keep making profits just by reducing costs.

Let's say you have a company that is not good at manufacturing.

  • Parts are not in time

  • Incorrect parts are delivered.

  • Re-arranging

  • Machining mistakes do not go away

  • Equipment is just out of order

You cannot say that you can make things at a reasonable cost in such a state.

Suppose such a company introduces TPS and promotes Kaizen. In that case, it will be profitable as much as the cost is reduced, so it is possible to enjoy the profit increase by improving activities.

Suppose there is a company that can manufacture at an excellent cost price, with few of the above problems close to the ideal.

By analyzing the manufacturing lead time of the company in detail, finding work that does not add value to the contents of the process, and struggling to eliminate it from Kaizen, you will be further reduced the cost.

Even companies that continue to use TPS will be profitable by taking the above-mentioned non-value-added work with lead time contents.

That's why Toyota's manufacturing sites are working on Kaizen day and night, saying, "There is no end to Kaizen."

There are limits to how much profit can be generated by reducing costs.

Efforts to increase "sales" are indispensable for making profits.

Since the basic idea is to provide products acceptable to our customers at reasonable prices, we must constantly provide good products.

Currently, I have a company based on the above idea

I have installed a "cost planning" activity.

Clarify the leader and clarify the promotion system through the approval and participation of the parties concerned.

We will clarify customer satisfaction and investigate how much you can buy and how much you can buy.

Then, when you buy how many units a month and how much, you decide the profit necessary for the company to survive.

Then, it is calculated from the formula below how much the cost price must be to make a profit.

"Cost" = "Selling price"-"Profit"

Setting this cost target first is of paramount importance to product development.

It's time to develop a new product, so you can take the plunge and modify the structure.

At the end of development, it's too late to say, "This isn't profitable, so let's do cost reduction activities."

You can see the "things to do" in product development when you start this activity.

We can see the need for related parties to work together.

So I also understand the need to share the schedule with everyone.

By the time the prototype is finished, the achievement of the cost target will come into view.


If you are involved in design and development, wouldn't it be taken for granted?

Where I'm walking, it feels like this isn't the norm.

In my forum, I have accumulated a lot of articles about Toyota's chief investigator system benchmarked by GAFA. So I think people who understand it will understand it.

My goal is to revitalize the Japanese manufacturing industry.

If you can speak to me, I will visit you.

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