1. Provide a short expalanation for each of the five steps of the product development strategy that Toyota follows. 2. Explain how ideas at Toyota are gathered and managed. 3. Describe the Toyota Creative Idea and Suggestion System and give examples of benefits that such a system can bring. 4. Explain the strategies during each stage of the product life cycle for the Toyota Prius. 5. Give examples of publicly responsible decisions that Toyota has recently been involved in. What is their impact on the society? The Toyota Prius CHAPTER 9 Developing Toyota's product life cycle is shaped by the launch of numerous generations of the same model. This strategy can extend the growth and maturity phases of the cycle by decades and involve multiple product generations. Consider the Toyota Prius, arguably its most successful model. Here, each phase of the product ife cycle corresponds to a generation of the Prius. 1. Introduction Phase: The first generation of Toyota Prius was launched in 1997, after five years of design. As one of the world's first commercial hybrid vehicles, it was revolutionary in fact, the design proved so successful that it has been maintained in all Toyota models since. The car was an immediate sucoess in Japan, selling 40,000 units by the year 2000. Although it initialiy had slow extemal sales, by the end of 2003, when the first-generation production ended, the model had sold more than 123,000 units in all markets. 2. Growth Phase: This phase is represented by the secondgeneration Toyota Prius, which had more electrical feafures and a new hybrid motor that could achieve peak performance based only on the electrical part of the engine. The car was larger and fuel performance was improved by 15 percent. It was an immedate commercial success: by 2004, it hed already sold more then the previous model over its entire lifespan. By 2012, when production stopped, worldwide sales had reached over 1,190,000 units. 3. Maturity Phase: This phase is represented by the thirdgeneration Prius, which hed incremental improvements: CO2 emissions decreased by 14 percent, engine power increased by 22 percent, and fuel efficiency increased by 10 percent. This model also broke internal sales records, with a total of 3,360,000 units sold by 2014 . 4. Decine Phase: This is what we can consider the current phase of the Prius. In 2016, the number of Priuses sold in the U.S. was half the number in 2012 . The reasons range from lower gasoine prices to the emergence of full electric vehicles like Tesla. Acting Responsibly for the World Social responsibility at Toyota is incorporated in innovative ideas toward the environmental goal of reducing CO2 emissions by more than 22 percent between 2010 and 2020 . The company plans to produce orly eloctric vehicles and hybrids by 2050 and to drop total CO2 emissions by 90 percent untll then. Toyota's website currently presents six electric vehicles, the latest being the Toyota Concept-1 Ride, launched at the Tokyo Motor Show in 2017. These vehicles are small urban compacts designed to fravel short distances in a busy cly environment. The show also unveled the Concept-I WALK, an electric personal transporter that operates like a Segway. Technologies are being developed to ensure that Toyota's vehicles maintain the highest performance as well as environmental friendiness, Continuous improvernent is cultivated. For example, the company recently discovered a method to create magnets for electric vehicles that uses 50 percent less critically rare materials than regular magnets. This means lower production costs for the same performance and a lower reliance on raw minerals. Partnerships with two Chinese battery companies, CATL and BYD, ensure a smooth entry into the full electric vehicle market. Social responsiblity at Toyota is also reflected in its testing of electric technologies in urban environments. Between 2014 and 2017, Toyota partnered with the French city of Grenoble, French energy provider EDF, and carpooling company City Lb to conduct an experiment on the integration of electric vehicles in public transportation. Toyota provided a feet of electric vehides using its proprietary technology and powering stations to complement the city's public transport - the result was 90 percont satisfaction among the people who used these services. Toyota introduced multiple salety systems in all vehicles to reduce traffic accidents, such as emergency diver assistance and the Intelligent Clearance Sonar system, and has organized information campaigns on traffic safety, environmentalism, and society and culture. Toyota has also held cell vehicle classes at elementary schools in lwaki City, and aiong with the Chine Soong Ching Ling Foundation, the company has provided scholarships to over 2,000 Chinese students to attend university. At Toyota, workplace cuture includes basing responsible product decisions on employees' volunteer activities. For instance, the company signed its employees up for the Tokyo Paralympic Games in 2019 to get a better understanding of different types of disabilities. In Belgium, Toyota donated the money collected through different employee activities to an NGO that deals with refugees and disadvantaged people. The Toyota Foundation has supported several public programs, including the Trafflc Congestion Mitigation Project in Bangkok, the Station Accoss \& Mobility Programme for the Bengaluru metro system, and the Ueyama Mobility Project to make traffic easier in mountainous regions in Okayama Prefecture, Japan. Toyota also sets itself apart with its policy toward Conflict Minerals, which are mined in war-torn zones, usually by warlords, gangsters, and local dictators. Toyota refuses to purchase minerals acquired through human rights violations, and it is a member of interna. tional organizations that moritor the routes of conflict minerals. 30 Questions for Discussion 9-16 Provide a short explanation for each of the five steps of the product development strategy that Toyota follows. 9-17 Explain how ideas at Toyota are gathered and managed. 9-18 Describe the Toyota Creative Idea and Suggestion System and give examples of benefits that such a system can bring- 9-19 Explain the strategies during each stage of the product life cycle for the Toyota Prius. 9-20 Give examples of publicly responsible decisions that Toyota has recently been involved in. What is their impact on the society? Company Case Toyota: Developing a Million New Product Ideas Every Year Toycta is one of the car industry's biggest success stories. Founded in 1918 as Toyota Spinning and Weaving compeny. it orly started to produce automobies in 1937, but since then the compeny has continued to grow to become one of the most. important car manufacturers in the world. In this regard the compary has been a globel traiblazer in several areas related to product and product design, with some of its strategies, the the Toyota Product Development System (TPDS), becoming industry standards. From Concept to Decision Hall The now product development strategy at Toyota is realiced mainly in five distinct steps: 1. Creation of Concept. This step is defined by the collection of ideas, mainly from employees but also from the general public through programs such as Ideas for Good. Major points taken into consideration are customer profle and future car trends. Designers then create an initial sketch. 2. Development of the idea. After the initial sketches have been pencled out, a team of experienced designers create a complete 3D computer model with full details. Emphasis is on the realism of the project (how close it is to the final product) as woll as creativity and visual appeal. 3. Color Choice. Toyota takes great care with minor detais, even color. Every color is analyzed based on its fit with the general product idea and concept. For example, red might fit a sports car like the Toyota GTR but not a Toyota Offroader. Morecver, special attention is given to how the colors of different car parts fit with each other. 4. Mock-Up. A realistic mockup is created using clay, which the designers and engineers analyze to find errors. 5. Decision Hall. A few modeis are bult and taken to a hall where they are analyzed in realistic environmental conditions. Light and rain are gonerated to see how the car looks in these settings. Toyota believes in co-creation value in which al stakeholders are involved, potential customers included. The comperry uses three main sources of product ideas: employees in the engineering and design departments, other employees across the whole company, and people from outside the company. Toyota also gathers new product ideas from dealerships worldwide, as this is where customers bring their cars in for repairs. Ideas from engineers and designers are generated through the TPDS. Toyota Creative Idea and Suggestion System In 1951, the company developed the Toyota Creative Idea and Suggestion System (TCISS) to allow every employoe to offer feedback on any topic they could bring an improvement to. The TCISS was put in place to empower evory employee to make informed suggestions regarding the production process, especially employees at the sharp end of production, arguably the ones most likely to highlight potential issues. The company offers an individual annual award for ideas submitted through the TCISS, for which employoes can earn gold, siver, or bronze medals. Since the TCISS was set. up, the company has expanded its ideas creation process to include poople from outside. It organized multiple idea contests and has recelved a growing number of creative submissions: in 1974, it exceeded a milion; by 1984, 10 milion; by 1988,20 milion; and by 2011, 40 milion ideas and the number continues to rise. In 2007, as an extension to the TCISS, the company launched an innovation Fair where teams from the sales, financial, and IT departments competo in an idea-based toumament. It was at the 2007 Fair that hydrogen-powered vehicles were presented, and at the 2014 Fair. Eluetooth low-energy beacons to help dealers get better inventory management information were debuted and won funding. Supporting and Rewarding Creativity Fundamental to the TPDS is the human value of Toyota's em: ployees. The company seeks to create an ervironment of creativity where ideas flow freely and contributions from every toem member are encouraged and rewarded. To separate good ideas from bad ones, those who submit ideas must always explain how they contribute to the overall project. Additionaly, each topic or probiem receives multiplo ideas, and each idea is verified based on a performance-based approach. Finally, to avoid "reinventing the wheel," all ideas are centralized in an easy-toaccess ideas management. system. This system, especially in the engineering deparment, involves the most exceptional and experienced engineers, who also serve in the role of teacher. At Toyota, the boss can perform their subordinate's tasks at a higher level, so the creation process is not hindered by employees' differences with bureaucratically selected management. At higher echelons, managers are expected not only to possess advanced technical skils but also to see the bigger picture by carefully coordinating the work of multiple distinct departments working on the same project. As such. this facilitates the top management support that is so crucial for the new product development procass. In 2010, Toyota extended its search for now ideas to the general public through the "Ideas for Good" campaign, encouraging people to imagine new ways in which its technologies could be used for the betterment of their lives beyond the automo. tive world. The best ideas are selected by a panel of Toyota employees, and the winners are invited to participate in the Toyota design process for a future product related to their ided