By Angela M. Corriero
Article Summary: A global shift in thinking about how homes and buildings are constructed is occurring. This is a good thing as we have, for too long, accepted chronic quality, cost and delivery problems that have threatened not only profit margins but also our standard of living. Kozo Sakano and I had the opportunity to visit Toyota Homes – Toyota Motor Corporation`s home construction company in Japan. In this article, I would like to offer some key insights from our visit to this impressive home construction company.
Lean Construction from the Japanese Point of View
It is well known that lean is the continuous elimination of waste and non-value added work to maximize efficiency and delivery flow to ultimately increase profit. But did you know that lean, from its Japanese origins within the Toyota Production System is about harnessing internal know how to drive innovation and growth? In the construction world, this is about no longer accepting blow out allowances, loss time injuries, time delays, re-work and absenteeism. How about higher profit margins and less headaches instead?
Professor Roger Liska of Clemson University in the U.S conducted an analysis of productivity on the construction industry and found that the average construction worker operates at only 40% efficiency. Similar inefficiency can be found in Australia. Indeed, Return on Equity within the construction industry is well below average. Further, 43% of construction and demolition waste goes to landfill in Australia, while in Japan often 98% is recycled. The amount of inbuilt inefficiency, waste and hazards in construction projects is incredible. The lack of employee engagement is alarming. And the amount of lost opportunity for companies to capture internal know how and drive innovation and profit cannot be understated. We are limiting ourselves.
Why are we accepting so much waste? Such little profit margins? Such high prices? What if there was a better way where the customer could get a better quality home at a cheaper price and the construction company could gain a higher profit margin – at the same time? Impossible? Toyota Home Construction company does it all the time.
About Toyota Housing Corporation
Toyota Housing Corporation is an inspirational home construction company founded by Mr. Shoichiro Toyoda. Utilizing the same philosophy and continuous improvement strategies of Toyota, homes are created with the highest quality standards at the best possible price.
Toyota Homes History
1950 – Yutaka Precon Co. Ltd. was founded – now known as Toyota T&S Construction Co. Ltd.
1975 – Operations begin & the housing division is officially added to Toyota Motor Co. Ltd`s operations
1977 – Single Family Home sales begin
2000 – Apartment construction & sales begin
2001 – Achieved #1 ranking in Aichi Prefecture for number of homes sold in 2000 (Toyota Homes was ranked #1 from 2000 – 2009)
2003 – Toyota Motor Corporation functions are divided and Toyota Housing Corporation is founded
2008 – Achieved #1 home sales ranking in 3 prefectures
2010 – All housing divisions are combined to form a new Toyota Home brand
How does Toyota Homes implement lean construction?
Toyota Homes is a highly sophisticated company employing lean manufacturing concepts and strategies from The Toyota Production System. They have tested and practiced their home construction techniques over a matter of decades to achieve their high quality and efficiency standards. Below, I outline some key features of their construction methods and strategies. But first, I want to challenge you and your organization to consider how you could implement a continuous improvement system within your company. The strategies and method utilized at Toyota Homes may not be fully practical or feasible for your organization. But the point of continuous improvement is not to transfer technology – it is to harness the internal capabilities within your own organization to get better and better. The entire reason for Toyota`s success is that they have built upon their know-how, and have kept building – striving to become ever better. Does your organization have a similar credo?
Toyota Homes operates like a factory. Indeed 85% of the home construction is completed within the plant. This ensures quality, cost and delivery standards are upheld. Did you know it takes about 6 months to build a home in Australia? Guess how long it takes Toyota Homes….45 Days!
Elements of the Toyota Production System utilized:
Lean Construction Study Opportiunities
Would you like an opportunity to visit Toyota Homes in Japan? For training tours on Lean Construction, click here.
Improving efficiency and eliminating waste has its challenges! If you have a question, ask our experts in the field right here in Japan.
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