Toyota's 'Simple Slim' cuts Camry engine costs in half
These days, with ever-thinning margins and rising production costs, automakers are generally pleased when they can cut the cost of their major systems by a few percent between model cycles. But apparently, for Toyota, that isn't good enough, as they've reportedly cut the cost of building the Camry's V6 engines by a full 50-percent.
The massive cost savings arrives courtesy of 'Simple Slim', the quizzically-named cost-cutting program whose centerpiece is a new method for pouring molten aluminum into less-expensive castings. The process resulted from the work of some 300 engineers, and is just one facet of Toyota's 'Simple Slim' cost-savings regime.
[Source: Bloomberg.com]
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Reader Comments (Page 1 of 2)
Jason E. Rist 6:17PM (2/21/2006)
Ok, let's assume a 1 year project for this engine.
Let's assume that the average salary for 300 engineers is $50k (that's being generous). That's roughly $15,000,000. I'd like to see the case study on this versus not doing the change. Perhaps this change will be propogated across different engines, thus making this a good investment.
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Finished.Law.School 6:20PM (2/21/2006)
Too bad GM and Ford could never do this on their best day...
I blame the UAW.
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nezromatron 6:24PM (2/21/2006)
You assume that these 300 engineers did nothing else but this. It probably means that 300 engineers were somehow involved with this somewhere along the way..
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Eric 6:48PM (2/21/2006)
Ok. So... how long before the products blow?
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djSyndrome 6:52PM (2/21/2006)
If I'm not mistaken, the "new" 3.5L V6 in the Camry is also used in several other Toyota vehicles, including the new ES350, the RAV4, and the Avalon. I would also expect to see it eventually replace the 3.3 in other Toyota vehicles (Highlander and Sienna, to name two). So the savings are really leveraged across multiple models, not just the Camry.
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Rob 7:07PM (2/21/2006)
Reader #1 assumes the benefits of the project to be amortized over engines, but this is not the case. Take for example the wheel plant mentioned in the article; not only are these techniques useful for engine manufacturing but also in the casting of wheels, a seemingly unrelated process.
Add the benefits to other parts (manifolds, suspension) and you see where the time becomes "well spent"
Toyota typically develops new processes infrequently, tending to rely on long-proven "old school" stuff. When a new process comes along, it will be last as long as one of their vehicles and will be just as well sorted out and perfected.
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Dan A. 7:11PM (2/21/2006)
I heard a while back that Toyota had developed a new system for producing their Hybrid Synergy Drive as well. I wonder if this has anything to do with that?
The bigger question is; Are consumers going to benefit from this breakthrough? Or is Toyota just going to increase their profit margins?
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Roger 7:56PM (2/21/2006)
#7 I'm sure both will happen. Consumers will benefit from a higher value product and Toyota will increase their profit.
I'm sure Toyota only goes forward with projects like this that will pay them back if not in the short term, for sure in the long run.
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iQuack 8:01PM (2/21/2006)
I just hope they haven't skimped enough that we will have another oil sludger on our hands. Only time will tell.
A friend of mine has a 97 Avalon which smokes badly upon startup. It has a mere 98,000 miles on the clock and he has had maintenance done religiously. Amazingly, he is like most toyota faithful and excuses this miserable excuse for a car and wants a new Camry when they come out.
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Mick 8:03PM (2/21/2006)
I'm more concerned with what happens to he workers in these "time and motion study" plants as managers watch even the eye movements of their production workers. This does not exactly strike me a a quality environment in which to spend one's working life.
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Charles S 8:09PM (2/21/2006)
Well, not that I mind all the gushing over Toyota's cost savings (and no, I'm not anti-Toyota), but lowering the bottomline is essential if a company wants to be competitive.
Will buyers see the savings? I guess they could, but Toyota has no obligations to do so. Being able to produce products cheaper just gives Toyota buffer in pricing their products. That's how it should be, and that's how we should view it.
If Toyota is going to lower prices, it is probably because of competition, and not from the goodness of their heart.
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TheChaz 8:16PM (2/21/2006)
One more nail in the first poster's coffin. Toyota sold 431,703 Camry's last year. I have no idea what the cost on that engine is, but let's say it's a hyper-conservative 100 dollars. (I'd guess that it's actually closer to $1000, but no matter.) That would put the cost to Toyota of building that engine at 43,170,300. Cutting half that cost saves them 21,585,150. That's a handy 6.5 million dollar savings over your estimated 15 million expense.
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Noah 8:31PM (2/21/2006)
Now if Toyota would just see the light of forced induction...
--Noah
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hans 8:36PM (2/21/2006)
it said that it lowered the cost of the engine to a $1000 total, from $2000.
engineers also make far more than $50k a year, but then again these are probably engineers that already worked for toyota and will work in other r&d projects later.
so seeing as this 3.5L engine goes in many of their cars it is a worthwhile thing.
this engine presumeably is the one in the avalon, lexus IS250/350 (the same block anyway) , gs350, gs300, camry v6, etc.
they also said it could be used to make v8s and i-4s with a changing of the die.
with #1's logic of thinking it might pay off maybe for a year, so maybe they s hould not have bothered, we'd be driving 1970s technology cars since no one would have bothered. then again i assume the detroit auto makers think the same way which is why until recently most of their cars were made with 1970s technology (chevy cavalier deathtrap anyone?)
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Noah 9:04PM (2/21/2006)
Regarding #10
Generaly the most cost effective motion is also the safest because lawsuits and workman's comp aren't cheap. If they can make you work 10% more effectivly and reduce injury rates by 50% their going to see a lot more savings than if they just make you 15% more efficient and blow out 80% of the worker's backs.
They call it "work" for a reason, and they pay them well for the same reason.
--Noah
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Ryan 9:24PM (2/21/2006)
Well I dont know about the rest of you guys but I would much rather have a PRE "SIMPLE SLIM" Toyota than a post "SIMPLE SLIM" Toyota, but that is just me. Anyone else? Are *any* of the savings going to be passed through to the consumer?
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Autoblog Sucks 10:08PM (2/21/2006)
Hey, that pitcher moovs.
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Kurt B 10:08PM (2/21/2006)
Does this one come pre-sludged? ;-)
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Robert Hearne 11:03PM (2/21/2006)
Most everybody seems concerned about whether savings will be passed along to consumers , maybe not on the front end(two years max for ANY NEW INNOVATION), But if the Research and Development costs are not recovered by the propagating designers , they take a loss and others using their new found processes pass along cost saving to the consumer through competion for market share . The patent process makes an attempt to assure innovations are forever coming forward and the consumer is the ultimate benefactor .
Do you understand ? Most likely not , if you try to deny profits to those willing to gamble on new processes not proven to be moneymakers .
RH
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Joey (Kev) 4:22AM (2/22/2006)
too bad that GM did that 30 years ago with a factory kit ( ;) )
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