The Toyota Way…With Water

Toyota has been a manufacturing leader for decades, and its philosophy and strategy regarding everything from production practices to just-in-time logistics have been widely copied as well as admired.

Now the respected global industrial standard-setter is pushing the envelope and looking for followers in another area: water usage and stewardship in factories.

Cognizant of this pressing need within its own facilities and also hoping to spark more attention by the American manufacturing community to the growing challenge of water supply and utilization, the company is highlighting its own efforts in the context of the broader problem in a new program that begins airing on the Science Channel on June 17 and will also be shown on MotorTrend TV and on demand on the Discovery Science Go app.

“This is not a patting-our-selves-on-the-back kind of thing,” Kevin Butt, senior director for environmental sustainability for the Plano, Texas-based North American arm of the Japanese automaker, told Chief Executive about the show, “Water: We Have Too Much, But Not Enough.

“It’s how we share information and get the word out. There’s such a thing as asking people to join a cause that has a lot of merit to it. We don’t want [society] to be in a position again where we’re only in a reactive mode to another of the environmental issues we’ve had over the years.”

Industry uses about 19% of the fresh water in the United States, agriculture 70% and households just 11%, meaning that manufacturers’ usage could be targeted, especially in water-parched areas like the West, if climate change, extreme weather, poor water management and other factors continue to exacerbate America’s fresh-water situation.

“There are risks out there” to manufacturing, Butt said. “The first place water is going to be cut off is probably the golf course, but then it’s going to get to manufacturing. We have to continue to work to make this a focused area for industry.”

Other manufacturing and operations chiefs can learn from Toyota’s approach to water management just as they have learned about and adopted aspects of the sublime Toyota Production System for manufacturing, and the company’s pioneering approach to Kanban for inventory management.

• Use less. Valuing water and its costs in manufacturing is crucial. “Calculations are often just based on, ‘We’re [only] going to save a gallon of water and that only costs us a penny,’” Mark Yamauchi, Toyota North America’s environmental sustainability manager, told Chief Executive. “But that’s just the commodity cost of water. Then start looking at the true value of water — every gallon you purchase has to be treated, processed, pumped, moved and filtered — those costs get multiplied several times. Understand the real value of water to help with those payback calculations.”

• Re-use every drop. Toyota has been installing reverse-osmosis water-purification equipment as part of its emphasis on re-using every gallon of water in its facilities. “We’ve got to be more efficient in that area, and technology is the answer,” Butt said. Yamauchi added, “We’re continually cleaning our water internally to make multiple passes of water through our manufacturing system.”

• Consider the ecosystem. Toyota’s plant in Baja California, Mexico, is one of its most water-stressed plants in the world, in large part because of its location in a part of the continent that has been dealing with severe drought for several years and is basically desertified in the first place. The company has focused much of its initial effort on that plant, including understanding its relationship to the local and regional watershed.

“We always knew we were withdrawing water from the local reservoir, fully permitted and working with local water agencies,” Yamauchi says. “Then we realized that our water is actually fed through a canal system from the Colorado River delta, which connects that water to everything upstream in the United States that we’ve been hearing about. And the reservoir also feeds local communities such as Tecate [Mexico]. We have an obligation to understand how that reservoir needs to support those communities.”

• As in everything, kaizen. Much of the worldwide success of Japanese companies in manufacturing has been to transfer their homegrown philosophy of unrelenting, steady, incremental improvement to their operations and workforces everywhere. That certainly applies to improving utilization of water.

“We are never satisfied,” Yamauchi said. “It doesn’t end. Kaizen is continuous improvement. That’s kind of the challenge and the fun of it. You always find something. You don’t stop.”

• Take it seriously. So far, severe water shortages in the U.S. have been more of a regional or short-term problem, but some scientists believe they’re just a hint of worse problems to come from climate change. Manufacturers should get ahead of that potentially tectonic shift.

“A lot of people don’t understand or have a concept of water shortage unless they live in a local region where there are impacts,” Butt said. “But that’s why we’re telling the story, and hopefully in a way that’s impactful and causes people to want to make a change.”