12.15.2010

Porsche Gets Its Speed from Toyota

I just read this great article over at the Bloomberg Businessweek site titled Porsche ‘Shock Therapy’ Spurs VW, Lufthansa Efficiency Drive. Other than pointing out that Porsche currently has the highest profit margins in the industry, the article discusses how Porsche, under the auspices of CEO Wendelin Wiedeking, began benchmarking Toyota's Lean production techniques back in the 1990s. This current success could indeed be attributed to the lessons learned from Toyota.

One section of the article -- "Taught By Toyota" -- points out how Porsche fully embraced a JIT (just in time) delivery system in cooperation with its suppliers: "Porsche took steps to fine-tune cooperation with suppliers to ensure factories received parts just when they were needed on the assembly line."

For years, Toyota has been operating its "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." It appears Porsche has followed this lead as well as it has established its own consulting division and has worked with such clients as "Deutsche Lufthansa AG, Volkswagen AG, and Meyer Werft GmbH" who have "all turned to Porsche to make their manufacturing processes more efficient."

In 1993, Porsche "had a net loss of 122 million euros ($162 million) and sales of no more than 14,000 cars" and now in 2010 posted an "operating margin in the automotive unit in the fiscal first quarter of 19 percent" and earned honors in J.D. Power & Associates’s annual quality study.


What do the readers of this blog think of Porsche's success? Does it come as a surprise? Is Porsche building a new culture within its organization?

15 comments:

Mike LaChapelle said...

Porsche engaged the Japanese consulting firm Shingijutsu in the early 90's to help them with Lean. Here's an article from 1994:

http://www.independent.co.uk/news/business/inside-story-shock-therapy-for-porsche-the-prestigious-german-car-firm-was-speeding-to-destruction-so-its-chief-swallowed-his-pride-and-hired-japans-top-consultants-to-improve-outdated-methods-of-production-john-eisenhammer-charts-the-brutal-remedies-they-prescribed-at-the-companys-plant-near-stuttgart-1411366.html

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