Monday, May 30, 2005

Multi-level Change Efforts, part two

Multi-level Change Efforts, part two

A few days ago I wrote about different levels of change strategy. When I wrote it, I thought about mentioning a fourth, higher level of change efforts, one that really fundamentally alters a way of doing business. But I didn't have a clear handle on how to explain it, so chose not to mention it at that time.

Well, sure enough, here is an example of just that level of effort as we learn Toyota eyes new cost-cut strategy.

Like our friends at Toyota didn't already have a clear cost-cutting strategy??

Yes, they do. And they keep making the strategy better. And they continue to set the standard for waste eradication. And it represents this fourth-level strategy.

Take a look at the article. Two points jump out at me.

First, they are looking at radically rethinking component parts. Instead of making screws more efficiently, why not make parts that don't need screws?

Second, rather than whine about high steel prices, why not increase the yield out of the steel they currently use?

In both cases, they think about optimizing the entire system...not just one sub-part of the system. A crucial understanding Frank Patrick's made clear in his post I pointed to last week.

Also note: this strategy is based on the already-legendary relationship of Toyota with its supply base. They are counting on (depending on?) their suppliers to come through. The promise to these suppliers is increased volume. Any lean initiative has to lead to top-line growth to bring about it's full potential

I hope this is helpful.

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