Toyota's Kaizen Experience

In the early 1990s, the Japanese automobile major, Toyota Motor Corporation (Toyota) was facing acute labor shortage. The emergence of high wage jobs and a shortage of young workers due to the low birth rates in Japan in the previous two decades were the primary reasons for this. The number of women and aged people was increasing in the country's labor pool. These people avoided heavy manufacturing work.

Toyota's strong focus on improving productivity and production efficiency over the decades had created strained work atmosphere as the workers were reportedly over burdened. This led to an exodus of young workers from the company.

Further, according to analysts, Toyota management's focus on increasing production efficiency by achieving higher production levels with less number of workers resulted in increased stress for the workers. This also played a major part in the worker exodus. Toyota's problems increased with by the global upsurge in car demand during 1987-1991 because of which the demand for labor shot up. As high wage jobs were easily available to the limited pool of young male workers, many Toyota workers began to leave the company. To handle the crisis, Toyota radically changed its production management and human resource management practices.