Toyota is using AI to cut waste, free factory space, and gain fresh capacity as Chinese rivals intensify global competition. 
Toyota

Production line at Toyota Motor Corporation's Motomachi Plant in Motomachi, Toyota City, Aichi Prefecture.

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Toyota Motor Corporation plans to launch a new vehicle development system as early as this year that will share customer order data on new-vehicle specifications in real time across all divisions involved in car manufacturing, including parts suppliers.

The system will use artificial intelligence to analyze and forecast which specifications are selling well, while phasing out those with weak demand. That will allow Toyota and its suppliers to redirect people, funds, and other resources more efficiently toward high-demand areas of development, paving the way for a major boost in productivity.

Rise of Chinese Automakers Drives Reform

Japan's auto industry is being forced to shore up its profit base as it faces a tougher trade environment, including steep US tariffs, and the rise of Chinese automakers with formidable cost competitiveness and speed of development.

"We won't be able to compete in the years ahead unless we raise productivity to an unprecedented level," Toyota Vice Chairman Koji Sato said.

President Kenta Kon has also described the productivity drive as something that "cannot wait." One concrete step toward that goal is the reform Toyota hopes to achieve through the new system.

Vehicle specifications are the basic design data behind a car. They include engine and battery performance, drive system, equipment options, and the materials used for interiors and exteriors. The new system will effectively be Toyota's first companywide platform for shared vehicle-specification data since the 1982 merger of Toyota Motor Co and Toyota Motor Sales, which created today's Toyota Motor Corporation.

Before the merger, the two companies used different information-management methods. As a result, Toyota's planning and development, production, and sales divisions have continued to use different terms and symbols for the same vehicle specifications. 

More than 40 years later, with more models on the market and a far wider range of technologies and materials in use, the task of translating specification information between divisions has ballooned to 310,000 hours. That accounts for roughly 35% of all work involved in developing new vehicles and has become a major barrier to faster information sharing.

Solving a Longstanding Issue

The new system turns the roughly 45,000 vehicle-specification terms and symbols that had built up across Toyota into a common companywide language. By linking that shared data platform with all of Toyota's roughly 800 core business systems, the company says it can finally resolve the long-running problem of translating specifications between divisions.

Toyota is already rolling out the system for newly developed electric vehicles and full model changes of several existing models. It plans to begin offering functions that connect the platform with parts suppliers as early as this year, moving the system into full-scale operation.

Once new models using the system are launched, Toyota will be able to link consumers' specification choices directly with every stage of vehicle manufacturing. Based on production and sales results, the company will be able to see in detail which specifications are selling and which are not, down to the part-number level.

Toyota will then use specially developed AI to analyze customer data accumulated from global sales of roughly 10 million vehicles a year. Rather than continuing to expand the number of variations in an effort to meet every possible need, the company will shift to a more efficient model built on subtraction: cutting specifications that do not sell and concentrating resources on the features the market wants and on new product development.

Cutting Factory Space by 35%

Parts suppliers also stand to gain. A clearer picture of which components are selling and which are not should make it easier to plan production and development and to manage manufacturing equipment, such as molds.

Toyota has already begun a related improvement drive ahead of the new system's rollout. Called AREA 35, the initiative aims to reduce the number of parts and the amount of factory space used by 35%, in part by reviewing vehicle specifications with limited sales records.

Reducing the number of parts used would free up factory space and give workers more room and capacity to build additional vehicles. Toyota has not yet determined exactly how much extra production capacity the effort will create, but its benchmark is 35% of the supply capacity of its existing assets.

That would be equivalent to about 3.5 million vehicles a year—roughly the scale of Honda or Suzuki's annual output—marking an unusually large jump in productivity.

The initiative began at 10 plants in Japan and has since expanded to 19 factories at home and overseas, including sites in the United States, Thailand, and India. Together with the new system, Toyota aims to accelerate its push to create additional capacity.

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(Read the article in Japanese.)

Author: Noboru Ikeda, The Sankei Shimbun

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