It’s always fun to see how the things lean companies do thoroughly confuse traditional thinkers. Toyota’s announcement that they are bringing manufacturing, engineering, sales and finance together in a new headquarters campus in Texas is a good example. At the same time they are moving procurement to close proximity with the design folks in Michigan.
Before the formal announcement from Toyota the folks at Bloomberg opined that the move must be a cost reduction one. “Some of the company's 5,300+ California-based employees would be let go or bought out. Others may make the move to the Lone Star State.” What do you suppose would be the basis for assuming some of Toyota’s employees would be “let go” - that the move to Texas is to reduce headcount? In all of their history they have never done that sort of job chopping consolidation, but, of course, the folks at Bloomberg cannot think of any reason for a company to do much of anything of significance if it is not to reduce headcount.
Again assuming the move is to reduce headcount and avoid California taxes, an ‘analyst’ from Kelly Blue Book warns of the dangers of “business disruption” and “brain drain”.
In fact, there is no mention of headcount reduction in any of the Toyota announcements. Quite the opposite, in fact. They seem to plan on everyone relocating (although that is unlikely). No, the fact is that Toyota is finally acknowledging the power of value streams, and that functional silos are troublesome even for a strong culture such as theirs. The move is all about lean management; not old school machete wielding Management For Dummies.
“Currently, we’re operating as multiple affiliates in a connected-but-independent way. In other words, we still have silos, and that’s slowing our decision-making process. Our goal is to become not a group of dedicated affiliates, but one company — One Toyota.” That according to Jim Lenz, Toyota’s CEO for North American operations.
It is interesting that Toyota is following, rather than leading, in this fundamental area of lean management. Structuring into cross-functional value streams along end to end process lines in order to overcome the communications and cycle time killing effects of silos is an element of lean that has been pioneered by American companies. Make no mistake, Toyota is still the star role model for lean companies, but it is good to see that, every now and then, the students can teach the master a thing or two.
In the meantime, we can all sit back and watch the mainstream business community speculate as to just how many heads Toyota will chop, and enjoy their confusion when those who believe that headcount reduction and management are synonymous.