Toyota Goes to Texas

Not too long ago, Toyota downplayed its "larger-than-a-compact" pickup-truck entry into the U.S. market. Toyota first called it the T100 in 1993 (offered only with a V-6); it evolved into the slightly larger Tundra in 2000 (just a 7/8th-scale full-size pickup truck) and eventually into the four-door Tundra (the length of an F-150). With only one manufacturing plant in Princeton, Indiana (the Tundra "mother plant")-which also makes Sequoia SUVs and Sienna minivans-Toyota was content to put together just 150,000 Tundras a year, at the same time going out of its way to avoid calling this pickup truck a "full-size" competitor.

Today, in the most un-Toyota-like way, the Japanese manufacturer makes no apologies for what this truck can do, what it directly competes with, and how many could roll down the assembly line. Much of the truck's success will depend on how well Toyota's newest state-of-the-art production facility operates. This is a new kind of manufacturing plant; in fact, it just might revolutionize the industry.

"Our facility will introduce numerous recently patented production and assembly advancements that, for now, must remain proprietary," says Don Jackson, vice president of the TMMTX production and quality. "But even more important to establishing a new benchmark for the Toyota Production System will be how a vast network of 21 separate parts and components suppliers has been incorporated and integrated on site. TMMTX will be the first automotive-assembly plant to integrate many supplier parts-production facilities on the same grounds and, in some cases, under the same roof, as the main assembly plant."

That's right, there are 21 separate manufacturing plants on site along with the much bigger Tundra assembly plant. Beyond the cost savings (no additional packaging, storage, freight, or environmental cost), at the slightest hint of a product-fitment issue, line workers (called team members) can stop the line, pick up a phone, and contact the lead foreman at the supplier plant in the next building. Within two minutes, that foreman can return to his own plant to make the fix. This means most supplier issues are virtually cost-effective in-house fixes.

Another impressive aspect to the new San Antonio plant is the extent to which the parts supplied to the line workers are automated. Working in tandem with each station on the assembly line is a large, parts-storage area where part orders are filled and moved to the assembly line, all by robots and electric carts following hidden track wires in the flooring. Once the parts are delivered, the driverless carts (beeping up a storm) head back to their parking stalls to await the signal from the parts computer to pick up another load. Even though our specific plant tour took place early in the production cycle (Toyota gave itself plenty of time to get the process right before full production speed), the plant was running with Disney-like efficiency, carts magically appearing and disappearing through opening and closing doors, first empty then full, all keeping the storage lines at the point of assembly operational.

Efficiency is the bottom line. Seats, for example, can be made and matched up hours, maybe days, before they're ready to be installed onto the very truck they were designed for. It's not much of a leap to see this kind of productivity leading to large-scale customization, where you order the exact truck you want from the dealer and have it in your driveway three weeks later. We're not there yet, but there's enough groundwork here to make your head spin. The original cost for the plant was projected in the mid-to-higher $700 million and $800 million mark. However, actual costs totaled $1.2 billion dollars--quite an overrun, to say the least. It's easy to surmise that much of the extra cost was passed onto the on-site suppliers (another good reason to keep them close) as well as a possible "extra" charge to the eventual transaction price of the truck (official pricing will not be announced until late February).

Finally, to keep its new employees happy, Toyota built a medical facility, as well as a pharmacy, on the grounds. The medical building is right next to the TMMTX museum, where tours will start and rotating exhibits will be on display. Look for this type of plant layout and strategy to be followed by other manufacturers, including Toyota. Of course, none of these advances will matter much if the pickup trucks rolling out the back door aren't a success.