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Toyota Gains Lead in Overproduction?
January 30, 2008

Toyota beats GM in global production; GM No. 1 in global sales

So it turns out that GM *sold* more cars than Toyota in 2007, but it's basically rounding error and a virtual tie (as pointed out well by the Lean Thinker blog). He's right, who cares who sold more? It's profit (and long-term profitability) that matters.

I wasn't going to comment until I saw the headline that Toyota *produced* more than GM. How odd -- Toyota produced 213,000 more vehicles than GM.... so they produced more cars than they sold.

In the latest neck-and-neck numbers race between the world's top two automakers, Toyota Motor Corp. said Monday it had made a record 9,497,754 vehicles worldwide in 2007, up 5.3 percent from the previous year.

That's about 213,000 more automobiles than the 9.284 million that GM made last year.

Now, I'm somewhat "tongue in cheek" saying that it's the "waste of overproduction." If Toyota's "heijunka" (or level loading of production) says it was more cost effective to slightly overproduce (to be made up for in a period where sales will be higher than production), then it's not necessarily the worst thing ever. Keeping production level brings many benefits to the stability of the supply chain and the supplier base. Constantly changing production to meet demand isn't necessarily the best business decision, nor is it "not Lean" to have a little bit of planned out inventory... am I explaining that well?

Posted by Mark Graban on January 30, 2008 | Comments (0)