Porsche learns from Toyota

RedorDead

granted its only about lean production but interesting article nonetheless.

From autonews.com

BERLIN (Bloomberg) -- Just as car enthusiasts envy Porsche drivers, so company executives salivate over the carmaker's profit margins, the highest in the industry.

Companies such as the airline Lufthansa, carmaker Volkswagen and shipbuilder Meyer Werft are turning to Porsche's growing consulting business to learn from its efficient production methods and boost profitability.

“The brand has become a synonym for masterminding the car industry's complex work processes,” said Thomas Stueger, product and services chief at Lufthansa's maintenance unit, which hired Porsche to help cut the service time for the Airbus SAS A340 plane. “Porsche is an interesting partner for us.”

Porsche's consulting division, which draws on lean-production techniques originally developed at Toyota Motor Corp., aims to expand its 220-strong workforce by more than 10 percent to serve an increased customer base of 150 companies.

This year, the unit opened a branch in Brazil to benefit from business ahead of the 2014 World Cup and 2016 Olympics.

Porsche, the world's most profitable carmaker, posted an operating margin in the automotive unit in the fiscal first quarter of 19 percent. BMW, the biggest luxury carmaker, posted a third-quarter automotive profit margin of 8.1 percent, while Daimler AG's Mercedes-Benz was 9.5 percent and VW's Audi was 11 percent.

The consulting business was borne out of former CEO Wendelin Wiedeking's restructuring of production lines and work processes to stave off insolvency in the early 1990s.

Saddled with high inventory levels and wasted factory space, Porsche had a net loss of 122 million euros ($162 million) and sales of no more than 14,000 cars when Wiedeking took over in 1993.

“Workers used to spend half their time climbing up and down shelves looking for pieces,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen and a former head of marketing strategies and research at Porsche. “Porsche had no alternative but to undergo a shock therapy which laid the groundwork for its huge success.”

Taught by Toyota
Toyota, the world's largest automaker and Porsche's teacher, is also in the consulting business, operating the Toyota Production System Support Center at its North American manufacturing and engineering headquarters in Kentucky, where it holds ongoing seminars for outside companies, as well as schools, hospitals and charities, spokesman Mike Goss said.

Under Toyota's guidance, Porsche took steps to fine-tune cooperation with suppliers to ensure factories received parts just when they were needed on the assembly line, a method that's been widely copied in the automotive industry and that Porsche is now helping companies in other industries implement.


Meyer Werft, a family-owned maker of cruise vessels based in the northwestern German town of Papenburg, hired Porsche two years ago to shorten production cycles and improve cooperation with its 1,800 suppliers, as 75 percent of components in luxury liners now come from outside contractors. Porsche helped the company move to a “just-in-time” supply system to cut inventory.

“We now have a lot of space in the hall and can do much more things at the same time,” said Bernard Meyer, Meyer Werft's managing director. “We're opening our own academy. We want to ensure that our staff doesn't slip back into past routines.”

Toy truck lessons
Porsche Consulting, which still advises the auto-making unit on improving manufacturing and administration, invites customers to its training center in Leipzig, Germany, where managers assemble toy trucks and fold cardboard boxes before being coached on lean-production techniques.

Porsche has come out on top of J.D. Power's annual quality study in the U.S. for six consecutive years, leaving behind Mercedes-Benz, Toyota's Lexus and BMW.

Remedies applied at Porsche work just as well in other industries, with customers including car suppliers, plane makers, hospitals and furniture manufacturers, Eberhard Weiblen, who heads the unit, said in an interview.

“Many clients come to us and say, ‘Please turn us into the Porsches of our industries,'” Weiblen said.

Lufthansa's catering division is now using Porsche's services to help improve logistics at a unit that produced 405 million meals last year for 300 airlines such as American Airlines or Asiana Airlines Inc., he said.

Two years ago, Lufthansa's maintenance unit used the sports car maker to cut time on aircraft overhauls. Coaching in Leipzig and at the division's Hamburg headquarters helped trim the time Lufthansa needs to dismantle, check and reassemble an A340 plane by 10 days to no more than 26 days.

Volkswagen, which is merging with Porsche, has contracted with the consulting unit on production since 1996, Weiblen said, declining to discuss the specifics of VW projects.


Michael Macht, who succeeded Wiedeking as Porsche CEO in July 2009 and is now VW's production chief, led the consulting unit from 1994 to 1998. Macht decline to comment for this story.

German builder Kirchhoff, a unit of Strabag SE, central Europe's biggest contruction company, hired Porsche in 2006 to shorten construction times on highways and cut staff and equipment costs.

“Porsche was the pioneer in bringing those Japanese manufacturing methods to Germany,” Kirchhoff CEO Joerg Eschenbach said. “Those changes were very meaningful and they worked extremely well for Porsche. For us, it was definitely a worthwhile example to follow.”



Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101213/ANE/101209816/1317#ixzz180btu3Fi

Lots of the largest medical device companies in the World also learn from Toyota. The likes of them pay good money for a tour around the Derby plant in the UK.

Mr.David

Yeah, the Japanese and Toyota in particular have pioneered a huge amount of the production systems and techniques used today globally.

squod

Lean manufacturing has been around since the late eighties. No company is without some aspect of it. Highly surprised Porsche aren't already using this system

Alun

squod wrote: »

Lean manufacturing has been around since the late eighties. No company is without some aspect of it. Highly surprised Porsche aren't already using this system

Exactly, I was in Japan in the late 80's (1987 IIRC) and did a tour of Toyota's facilities in Toyota City when all this JIT stuff was first kicking off. Not new at all.

squod

squod wrote: »

Highly surprised Porsche aren't already using this system

The title here is bit misleading.

Porsche are coaching other manufacturers for "just in time" manufacturing after using it themselves for years to improve their margins to the highest levels in industry. Porsche themselves learned their lesson from Toyota in early to mid 90's.

Stevie Dakota

When I read the title I expected to hear of some Porsche recall.