1. Toyota’s Economic Performance July 2007 Sales: 9.34 million cars worldwide forecast for 2007 –If achieved with surpass GM to be largest auto firm in sales Profits: $13.7 b for the fiscal year ended 3/07 –GM = $-1.97b, Ford = $-12.61b (fiscal year 2006) Market capitalization: $186.71 b (5/10/07) –GM = $16.6b, Ford = $15.7b, Daimler-Chrysler = $81.77b

2. Why has Toyota been successful? In the words of Katsuaki Watanabe, President of Toyota: “We’re doing the same thing we always did; we’re consistent. There’s no genius in our company. We just do whatever we believe is right, trying every day to improve every little bit and piece. But when 70 years of very small improvements accumulate, they become a revolution.” Quoted in “Lessons from Toyota’s Long Drive”, Thomas A. Stewart and Anand P. Raman, Harvard Business Review, July-August 2007, pp. 74-83.

3. Toyota Management Principles (TMP) The Toyota Way I. Continuous Improvement –Challenge: We form a long-term vision, meeting challenges with courage and creativity to realize our dreams. –Kaizen: “Continuous Improvement” We improve our business operations continuously, always driving for innovation and evolution. –Genchi Genbutsu: “Go and see for yourself” We go to the source to find the facts to make correct decisions, build consensus, and achieve our goals. II. Respect for People --Respect: We respect others, make every effort to understand each other, take responsibility, and do our best to build mutual trust. --Teamwork: We stimulate personal and professional growth, share the opportunities of development, and maximize individual and team performance.

4. The Toyota Production System (TPS) Jidoka: quality at the source Kaizen: continuous improvement Heijunka: even flow Kanban: pull system Just-in-Time: minimal inventories Work teams Total Quality Management Supplier Partnerships

5. Global Implications of TMP For other industries For economic development For sustainability