5. Shitsuke (Sustain) – Discipline to maintain a stable environment of continuous improvement.
The first 4 Ss are typically done in a workshop. The fifth, and most challenging, S is
accomplished by auditing and continuous improvement efforts. (Masaaki Imai, 1997)
A summarized version of the 14 Toyota Way Principles is as follows:
1. Base your management decisions on a long-term philosophy even at the expense of short-term financial goals.
2. Create continuous process flow to bring problems to the surface.
3. Use “pull” systems to avoid overproduction.
4. Level out the workload (heijunka). (Work like the tortoise, not the hare.)
5. Build a culture of stopping to fix problems, to get quality right the first time.
6. Standardized tasks are the foundation for continuous improvement and employee empowerment.
7. Use visual control so no problems are hidden.
8. Use only reliable, thoroughly tested technology that serves your people and processes.
9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.
10. Develop exceptional people and teams who follow your company’s philosophy.
11. Respect your extended network of partners and suppliers by challenging them and helping them improve.
12. Go and see for yourself to thoroughly understand the situations (genchi genbutsu).
13. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly.
14. Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen). (Jeffrey Liker, 2004)
Toyota Production System in Action
Many people confuse the Toyota Production System by thinking that it is just for the production floor. That notion is incorrect. In Toyota plants everyone is trained in the TPS. According to Seizo Okamoto, president of Toyota Manufacturing Indiana, Inc., ‘At Toyota, we believe that we create real value through production. The most important person is the production team member. But we have decided that other functions have to support production – I mean in administration, accounting, and engineering. Without fully understanding TPS, they can’t support effective production; they just create conflict.’ (Lindsay Chappell, 2005) So TPS can and should extend beyond the shop floor. But what about non-production facilities?
A good example of a service industry employing the TPS would be hospitals. The Allegheny General Hospital has trained their employees to let no problem go unsolved. By examining the way that intravenous lines are inserted they were able to reduce infections by 90% in just 90 days after instituting new procedures resulting in savings of $500,000. (Wysocki Jr., 2004) In analyzing the infections it was found that femoral intravenous lines had the highest rates of infection. The directive was made to use this site for intravenous lines only if there was no other alternative. The application of Root-Cause-Analysis is obvious. The monetary impact is quantifiable but the human factor is priceless.
Well known window and door maker Pella Corp. adopted the TPS many years ago. They recently “loaned” some of their employees to a local hospital. In a billing example a mapping process was done and it was found that billing insurers could be reduced from 14 to 11 days just by changing the process by which follow up calls were made to discharged patients. Everything can be mapped and questioned. How much inventory really needs to be in the pharmacy? (Wysocki Jr., 2004) The idea is to find the smoothest workflow. Mapping processes and ferreting out waste can reduce inventories, reduce waiting time, and prepare operating rooms faster with fewer errors. The customer (the patient) must always be the focus.
At a meal therapy program in Montana health care workers were frustrated because they only had 20 out of 45 minutes time to spend with patients administering care. Not only was this a human interest concern but the time lost in setting up for the next patient was non-billable time. By systematically studying the way time was used it was possible to reduce wasted time so that quality time could be dedicated to the patient. The current state was mapped, root causes of problems identified and countermeasures enacted. In this example it was found that some steps of setting up were duplicated by technicians, therapists and other workers. It was also determined that “kits” could be pre-arranged to reduce some of the set-up time. The analysis was done on an “A3” report. (William Inman, 2006) An A3 report is a paper on which a full report is documented. On this one piece of paper must be the problem, the current situation, the root cause, alternative suggestions, recommended solution and cost benefit analysis. Why A3? This is the biggest size that can fit in a fax machine (11x17 inches). (Jeffrey Liker, 2004)
The service industry is actually looking to the manufacturing sector to gain insight into how the TPS can work for them. Hospitals have even used unlikely sources such as Ariens, a well known producer of lawnmowers and snow blowers, to model after. (Marybeth Matzek, 2006)
An important difference in operating philosophy is how Toyota treats suppliers. A common practice of American based companies is to push cost cutting mandates to their suppliers. At Toyota a collaborative approach is taken which they believe brings more value to the final customer than harassing the supplier just for cost savings. At Toyota it is believed that working with the supplier on methods to reduce defects and to find mutually beneficial strategies will ultimately strengthen both parties. To build this collaboration Toyota has even formed an on-site supplier park at its Texas facility capable of housing 21 various suppliers. (John Teresko, 2006)
Toyota Production System Summary
So why does the TPS system work for Toyota but not for everyone? The simplest explanation is that the TPS or similar system of continual improvement cannot be confused with the individual tools utilized and perhaps most important is that the culture of the entire company must make a permanent change. Lean or the TPS is easy to understand but it takes commitment starting with management. A master plan should be developed outlining training and the cultural change within the organization. Company goals have to be aligned with individual and team goals. A plan needs to be in place to address the fears of downsizing. (George Alukal, 2006) “Kaizen consciousness” must be on the mindset of all employees. (Making Things: The Essence and Evolution of the Toyota Production System, n.d.)
In a global economy some industries in America have reengineered themselves with specific players emerging stronger than ever before. There are examples found in the steel industry. Other industries have not managed to do so and have vanished from the manufacturing landscape of the United States. The textile industry is gone. The auto industry is currently being put to the test. (John Teresko, 2006) It seems that Toyota with their Toyota Production System will be one of the strong survivors. But true to the Toyota way “The biggest problem is thinking you are okay”. (Making Things: The Essence and Evolution of the Toyota Production System, n.d.)
What a Hybrid Is
Any vehicle that combines two or more sources of power that can directly or indirectly provide propulsion is a hybrid. (How Hybrid Cars Work, n.d.)
In today’s automobile society, the most typical hybrid in use is a gasoline-electric combination. A gas-powered vehicle has a fuel tank, which supplies gasoline to the engine, which turns the transmission that turns the wheels. An electric car, on the other hand, has a set of batteries that provide electricity to an electric motor that turns the transmission, which turn the wheels. The concept behind the hybrid is a compromise; it attempts to increase mileage and reduce emissions in a standard gasoline combustion engine, and make the battery of an electric car more practical while maintaining low emissions.
In most recent years there have been just two forms of gas-electric hybrids available: Parallel and Series. A parallel hybrid provides power to both the gas engine and electric motor with the capability of utilizing both sources simultaneously to turn the transmission. In a series hybrid, the gas engine turns a generator, which charges the batteries or powers the electric motor that drives the transmission. Thus, the gas engine never directly powers the vehicle. The main reason why hybrids are capable of high mileage per gallon averages is because of its partial use of an electric motor. (How Hybrid Cars Work, n.d.)
Prius
To allow common hybrids to be more practical and not have to be charged by plug after every use, Toyota developed a system to allow the vehicle to act as a generator when braking or decelerating to recapture energy and store it in the batteries. Just like a wind turns a propeller, which is linked to an electrical generator to produce energy, the rotation of the wheels during deceleration and breaking turn the generator to produce electrical energy to be stored in the batteries. Another advantage during breaking offered by the Prius is that the gasoline engine is automatically turned off to save fuel and reduce emissions since it is not needed. (Toyota Prius, n.d.)
To reduce emissions the Prius can accelerate to about 15 mph before switching to its gasoline engine. The gas engine only starts once the vehicle passes certain speeds. The Prius also has a specially designed power split device that allows the car to stay in its most efficient load and speed range. This device allows the Prius to operate as either a parallel or series hybrid. The device also allows the gas engine to operate by itself, or with the electric motor to power the car, or to charge the batteries by powering the generator. One of the neatest capabilities of the split device is its ability to eliminate the need for a starter since the generator can do the job.
Tax and Other Incentives
A new and improved tax incentive has made a new qualifying hybrid car purchase even more enticing. As of January 1, 2006, any qualifying hybrid purchase is eligible for a full –dollar tax credit, compared to previous years allowance of a tax deduction. (New Tax Credit for 2006, n.d.) Estimates provided by the American Council for Energy Efficient Economy (ACEEE) has the Prius credit listed at $3,500 if certain qualifications are met. The qualifications include:
- Purchased on or after January 1, 2006
- New vehicle, not used
- Purchased with intention of use, not resale
However, there is a limit of 60,000 vehicles/carmaker based on how many are shipped to the dealer from the manufacturer, not the number of vehicles sold to the consumer. Credit will be phased out over 5 months. According to Toyota, phase out will begin as early as 6/30-9/30/06 resulting from high demand. Also, the credit will reduce regular income tax liability, but not below $0, and it is the last credit taken into consideration (after mortgage, retirement savings, etc.). Excess over dollar limit is forfeited forever. (New Tax Credit for 2006, n.d.)
Some of the noted state incentives, as long as all federal requirements are meant include:
- California- Free Meter Parking
- Florida- HOV authorization with any amount of passengers
- Pennsylvania- Rebate of $500
- New Jersey - None
As a result of growing environmental concern and rising fuel prices, some companies have taken incentive in offering employees money for the purchase of a hybrid vehicle. Some of the companies include:
- Hypexia- Software company offering employees $5,000 for hybrid purchase
- Google- Internet company also offering employees $5000 for purchase
Also, as a result of growing environmental concern and rising fuel prices, some business offer customer discounts and perks to owners of hybrid vehicles. Some of the offerings include:
- Travelers insurance- Offer 10% discount on auto insurance
- Hotels- Offer discounted room or free parking
(Local and Regional Hybrid Car Incentives, n.d.)
Prius Safety
The threshold for voltage that can be fatal is around 60 volts. Toyota Prius has 276 volts. (No one has ever died fixing this car. Mechanic must be careful and experienced.) In a crash, once the airbags are deployed the high voltage (HV) system is shut down to protect passengers and emergency medic techs.
According to the manufacturer, the Prius poses no greater threat than any other crashed car. Toyota uses nickel-metaphydride (NMH) which is claimed to be non-flammable and non-explosive. The battery is also sealed in a metal case and located near the rear axle, a location that is deemed to be well protected in the event of a collision. Hybrids must conform to the same government crash test standards as all other passenger vehicles. Also, the engine has a bright orange indicator covering cables as a warning sign of a HV battery. (Hybrid Safety Concerns for First Responders, n.d.)
Impacts – National Security
Over 50% of oil that is consumed in the U.S. is imported, which requires a military presence in these foreign countries to make certain the flow of oil is accessible. Not only does this presence cost billions of dollars a year, but it also stimulates hatred from those who oppose American principles. Our reliance on oil from the Middle East has aggravated conflicts and endangered national security. Pipelines and our oil tankers have become terrorists’ targets for those who are aiming to cut resources and disrupt the economy. If this notion isn’t concerning enough to reduce our dependency on oil then it is interesting that it is noted that: “oil money enables Saudi Arabia to invest approximately 40% of its income on weapons procurement”. (Security Risks, n.d.) We are essentially funding terrorist operations as we know them with our activity.
Impacts – Oil Dependency
Americans makeup less than 5% of the world’s population but they guzzle almost 25% of its oil and release 25% of greenhouse gasses which is directly correlated to its oil consumption. While oil contributes 40% of the nation’s aggregate power sources, it makes up 97% of the petroleum consumed by the various constituents of America’s transportation system. If the country remains on the same path and consume huge masses of oil then the economy will be constrained by the fluctuations of the oil market. All three world oil price shocks (1973, 1979 and 1991) were followed by economic collapses in the United States.
President Bush has encountered heavy criticism on his initiative, or lack thereof, in addressing the fuel efficiency of motor vehicles. An increase in the standards for fuel-efficiency would allow for a substantial reduction in America’s reliance on foreign oil as well as affect the American auto-industry. A rise of just less than 3 miles per gallon in the corporate average fuel economy (CAFÉ) standards, in one year, would offset the total exclusion of oil imports from Iraq and Kuwait collectively (Kennedy). U.S. automakers have been giving Bush pressure, which with Toyota’s new success with the Prius have been set further behind their foreign competition and are being forced to scale back staff in certain plants. “14 U.S. factories are at risk if Detroit can't produce more fuel-efficient vehicles, such as hybrids”. (Economic Risks, n.d.) Therefore, the President has not yet supported large increases in these standards.
While encouraging the public to drive hybrid vehicles like the Prius is solid step in the right direction, other actions are being taken to reduce the dependency on oil, and thereby, its associated risks. Senator (IL) Barack Obama claims that reducing oil consumption is a top nationwide concern, but also acknowledges that it would be hard pressed to take place without a national investment. (Obama, 2005) It isn’t that far-fetched to comprehend that the financial burden that American automakers have endured is due partly to its lagging behind competitors in producing energy efficient vehicles. In November 2005, the Healthcare for Hybrid Act was implemented and offers federal funding of 10% of retiree healthcare expenditures. Manufacturers become eligible for financing only if 50% of the associated savings are spent on hybrid, alternative fuel technology and the correlated costs of shifting production more in the direction of fuel efficient vehicles. Walter McManus, auto-economist, asserts the enactment is of an innovative kind: “Typically, the Federal government influences investment decisions through tax credits, but in order for tax credits to work it is necessary to have something to tax. Companies posting losses, and the Big 3 (automakers) are billions in the red, pay no taxes, therefore they receive no benefit from a tax credit”. (McManus, 2006) Employing this modern technology in vehicles in the United States will salvage jobs, maintain workers’ healthcare levels and decrease reliance on foreign oil while handling critical ecological matters.
Impacts – Business & Economy
America’s current dependency on oil and the concept of energy efficiency has sparked a project called the Apollo Alliance. This initiative is aptly named after the Apollo project that resulted in putting a man on the moon. Its purpose, along with weaning America from oil, is to create millions of jobs while generating the infrastructure to the energy system of the future. The present economy’s means of support is energy, and its outlook is contingent upon a continued economical supply. The American economy cannot dig itself out of the hole it has been digging for 30 years without actual political leadership and public investment. (Executive Summary, n.d.) Public investments have historically proven to be critical in new technological progress. For example, railroads, national road structures, the space program and the creation of the microchip and other related technologies are all beneficiaries of government investments. This type of federal funding includes $300 billion over 10 years that should bring vast benefits to America and the world. In total 3.3 million jobs will be created. The majority of these jobs will arise in the struggling manufacturing industry. Renewable and resourceful energy requires far more labor than the labor needed with non-efficient sources. It will create 21.5 jobs for every $1 million investment. Together with promoting a healthier, cleaner environment by reducing total emissions by 20% and putting 91 million advance hybrid vehicles on the road by 2015, these benefits will be realized through the following targeted strategies:
- Diversify our energy sources: making America less dependent on foreign oil, while making energy more secure, affordable, reliable and less polluting
- Invest in the industries of the future: promoting new technology, improving manufacturing processes, and expanding markets for American durable goods.
- Promote construction of high performance, energy efficient buildings: saving money and rebuilding more livable, more equitable, and healthier environments, and
-
Drive investment in cities and communities: renewing our commitment to building smart public infrastructure for transportation, energy, and other vital public services.
(Executive Summary, n.d.)
An actual example within the manufacturing industry where job opportunities should skyrocket as a result of initiatives like the Apollo Alliance is the power semi-conductor business. The basic premise of a hybrid vehicle is the energy that is generated is transformed and recycled all over again. “Electric power-massaging equipment” is already a large market. However, until the power sources were fabricated with high-velocity and high-energy semi-conductors, the products were not economical enough. Engineers have benefited from the capacity and price of power transistors. They have made use of the enhancements in the quality of silicon and have raised prospects for makers of parts of the silicon automobile. "Even when we get to only 5% or 10% of vehicles as hybrids, a niche for the auto industry, it's still a huge deal for the power semiconductor business," observes Stephen Ahrens, Fairchild's director of discrete automotive-power products. (Huber & Mills, 2005) By 2015 most cars will be manufactured around a hybrid engine, which will very positively impact the prospects of the following producers of power silicon and transistor components: Cree, Diodes, Fairchild Semiconductor Intl., Infineon Technologies, International Rectifier, IXYS, ON Semiconductor and Siliconix.
As previously illustrated, the costs of hybrid vehicles are much higher compared to conventional vehicles of similar caliber and performance. Toyota president, Katsuaki Watanabe, announced a recent target for the company’s cost reduction of their hybrid fleet which was one half of existing models. (hybrid cars.com citation) Recognizing that the key factor driving up the costs of hybrid vehicles is the battery, Toyota decided to improve battery technology. The Prius, for example, utilizes a gas motor along with a motor powered by nickel-metal-hydride batteries, which through a spike in demand has led to higher costs of this raw material. The evolvement of the light-weight lithium-ion battery may improve Toyota’s chances of achieving its aspiration to sell a million hybrids, annually. Johnson Controls, a leader in supply motor vehicle power solutions, is operating on a new age of hybrids with new rechargeable batteries that will provide additional cutbacks on fuel and greenhouse gases by enabling the battery to be plugged in. (VandeHei, 2006) This variety of battery is made to generate levels of power two to three times more than the nickel batteries together with 50 percent less weight, which offer consumers long-term cost benefits.
In February 2006, President Bush addressed the nation at the State of the Union and expressed concern about the solidity of the governments of the nations for which we rely on for oil and emphasized the instability of the markets. He requested an undertaking to substitute 75% of total imports from the Middle East by 2025. U.S. representatives feel that the nation will have trouble achieving this goal since their belief is that a decline in imports from the Middle East is more dependent upon the state of the markets than government orders. (VandeHei, 2006) However, companies are making efforts to “green” themselves.
General Electric declared that by 2010 their yearly investment in studies in “greener” technologies will increase twofold to $1.5 billion resulting in a $20 billion boost in annual sales of environment-friendly product offerings. This initiative also includes a 1% reduction in GE’s greenhouse gases emitted through their own operations, which otherwise would have increased by 40%. (Ignatius, 2005) By means of their global presence, GE’s resourcefulness will impact other businesses and serve as the trailblazer for future similar projects.
Along with Toyota’s conception of the Prius, GE’s program is an impressive example of a reform toward an ecological awareness that is influencing global trade. Overall, the United States is dragging it’s heels and is slower in joining this transformation due to the fact that President Bush’s decided not to ratify the Kyoto Protocol. The Kyoto Protocol (1998) is a treaty among the United Nations that pledge countries to restrict the release of greenhouse gases between 2008 and 2012 to amounts that are 5.2% less than 1990 measures. (Kyoto Protocol, n.d.) Despite this, there is a desire to address social issues. Companies and unaffiliated governmental organizations are coming together and creating innovative environmental strategies that are turning out to be customary within business.
An environmental standard referred to as Equator Principles, employed by financial institutions, illustrates this concept of these “self-enforcing rules.” In this example, which has been implemented by several key financial organizations, contributors have decided only to offer financing on a business venture following an evaluation specifying strategies to act in accordance with environmental codes for sustainable development. (Ignatius, 2005) Consumer awareness is also increasing. Consumers have doubts that egotistical and wasteful companies are basing more of their purchasing decisions on the social responsiveness of companies. Now companies like Shell, an energy company that once personified corporate arrogance, has take on a worldwide mission to lower emissions damaging the world’s most contaminated cities. (Ignatius, 2005)
Impacts – Environment
When it comes to analyzing the effects that cars and trucks have on the environment it is interesting to note that since 1970 emission control standards have helped reduce emissions to 60-90% of the 1970 level. (Driving Trends, n.d.) In spite of this, air conditions have only recuperated slightly. This can be attributed to the corresponding ratio of total vehicle miles traveled have nearly risen 150% compared to only a 40% increase in the U.S. population. With nearly 200 million cars on the road in the U.S. and 700 million worldwide today, there could be over a billion traveling the streets by 2025 at the current rate.
Below are a few concepts that depict the frightening correlation among cars and the environment:
- Driving a private car is a typical citizen’s most air polluting activity.
- Americans spend, on average, an hour per day in the car, and collectively over 8 billion hours per year stuck in traffic.
- The 2000 census revealed that 3 out of 4 workers drive to work alone.
- Each single family household generates approximately ten vehicle trips per day.
- Less than 5% of the population uses public transportation.
(Driving Trends, n.d.)
The climate is changing, and unfortunately Global Warming is not going to wait for concessions to be made. Humanity can only hope that hybrid and subsequent technology will severely curtail the adverse effects on the environment related to the greenhouse gas discharges from power plants and the daily millions of miles driven. A November 2004 report by the Arctic Climate Impact Assessment Group describes the significance of these effects. It stated that Earth's upper latitudes are enduring record escalations in temperatures, glacial melting and weather pattern changes. Throughout the last century, rising temperatures have seriously impaired the terrain of Glacier National Park in Montana. They are responsible for the gradual withering away of glaciers, which have been reduced to just 37 from 150. A total melting of Greenland’s icepack would increase global sea levels by more than 25 feet. (Why Reduce Dependency on Oil, n.d.) A 20 foot rise in sea levels would totally submerge sea-level cities like Miami, Los Angeles, New York and London. Even a 1 foot rise would have a severe impact in wiping out low-lying island countries like Indian Ocean’s Maldives. (Lovgren, 2004)
Pollution from cars extends beyond air pollution and the relative consequences are broader. For example, the end result of dissolving glaciers goes beyond destroyed national parks. Their fresh water pours into the ocean and disturbs the ecosystem caused by a reduction in salt water levels. The agriculture sector also bears the effects of air and water contamination. The general health and development of plants is threatened and are vulnerable to disease and ecological strain; thus, producing smaller harvests of fiscally essential crops. “Spring comes earlier, fall later, and the growing season has become longer and warmer; agricultural output in poorer countries could be significantly reduced, putting 80 – 90 million poor people at risk of hunger and malnutrition”. (Global Warming, n.d.) National security could also be at risk ensuing a climate change as countries clash to protect and obtain diminishing food and energy reserves.
Part of an overall approach to diminishing global warming consequences can be shifting the tendency of drivers to hybrid or alternative fuel-source cars and equipment that afford better fuel- efficiency. Consumers in the United States could single-handedly conserve 1.5 million barrels per day and about 55 million metric tons of fumes cast into the atmosphere per year if fuel economy criterion was upgraded by 3 miles per gallon. Oxocar is a great example of this strategy put in motion. It is the first all-hybrid car service that operates in New York City and claim that their passengers feel “pretty darn” virtuous knowing that they were expend 70% less fuel than a regular town car. (Gimbel, 2005) Awareness of these risks and effects will mount through the worldwide revolution in hybrid vehicles. With any luck, increased pressure and market demand will force the government’s hand in setting stricter emission regulations and approve funding for additional research into new technologies and other eco-friendly raw materials. In addition, each substitution to a hybrid can salvage the earth from stomaching a few tons of greenhouse gases.
According to calculations enabled by the Toyota website, the following eye-opening example is pivotal in understanding the path that hybrid and energy efficient technology are leading us. Let us compare the Prius to a conventional automobile that gets 25 miles per gallon of gasoline. We will assume a national average price per gallon of $3 (National Unleaded Average, 2006) and an average of 12,000 miles driven in a year. The burning of a gallon of gasoline emits 20 pounds of carbon dioxide. According to Toyota’s calculations, driving a Prius for a year will save you upwards of $900 in fuel cost and almost 261 gallons a year. Let’s take into consideration that they are 200 million cars on the road in America today and look at a “what-if” scenario. What if only 12.5% (25 million vehicles) contained hybrid technology similar to the Prius? In a single year, the United States would save itself over 16.5 billion gallons of gas, $19.6 billion, 163 million barrels of oil and 130.5 billion pounds of carbon dioxide emitted into the environment.
Initial worries that the batteries needed to run hybrid cars might cause a toxic situation when it needs to be discarded may be unfounded. Car batteries, conventional or hybrid, both contain corrosive material. However, it is a fact that the nickel metal hydride batteries used in the hybrid cars are much safer for the environment than the lead acid or nickel cadmium batteries used in conventional models. Additionally, companies like Toyota are offering cash incentives to motivate users to bring the used batteries back to the company for proper disposal. According to a Toyota press release, this proper disposal includes recycling every part of the battery and neutralizing the alkaline products before disposing of them.
Alternative Fuel Vehicles
Flex-fuel vehicles (FVV) have a single fuel tank, fuel system and engine. These vehicles are designed to operate on unleaded gasoline and on alcohol fuel in any mixture. Alcohol fuels are corrosive; thus, the engine and fuel system in flex-fuel vehicles are altered slightly. There is a special sensor in the fuel line to analyze the fuel mixture and control the fuel injection and timing to adjust for varying levels of fuel compositions. (Alternative Fuels Vehicles, 2006) According to Ed Stone, fleet manager for the city of Wilmington, DE, the cost to utilize flex-fuels is significantly less expensive. Stone compared the $28,000 for a hybrid vehicle or the $4,000 in upgrades needed to retrofit an existing vehicle to use compressed natural gas and concluded that the “initial costs can’t be beat”. (Karen Lundegaard, 2006)
Bi-Fuel Vehicles have two separate fuel systems, gasoline or diesel and another for either liquefied propane gas (LPG) or compressed natural gas (CNG). CNG and LPG are stored in pressurized tanks and cannot be pumped into the gasoline tank. When accessible, low cost CNG or LBG and the bi-fuel design offer a cleaner alternative to the traditional single system fuel system. As a result of the two separate fuel systems and the storage tank, the bi-fuel system vehicle is costly and lacks adequate storage space. (Alternative Fuel Vehicles, 2006)
Electric Vehicles (EVs) are virtually non-polluting and energy efficient. 75% of the energy from a battery reaches the wheels of a vehicle, compared to only 20% of chemical energy in gasoline in conventional combustion vehicles. Whereas internal combustion engines must be increased to a high rpm to produce peak performance, electric motors have the ability to provide power at just about any engine speed. This results in efficient acceleration from a stop. Cost and performance of EVs is determined by the battery in the vehicle. Batteries range from advanced lead-acid batteries, to nickel-metal hydride, to lithium polymer batteries. (Alternative Fuel Vehicles, 2006) Electro Energy is a company seeking to implement EVs technology in the Toyota Prius. James Landi, engineering manager at Electro Energy, has developed a prototype of the Toyota Prius with two new accessories; plug-in battery charger and a larger-than-stock battery pack capable of storing six kilowatt-hours of electricity. (Jim Motavalli, 2006) At this time, however, recharging the battery pack can be problematic. Home recharging systems are available but recharging sites away from home are rare. (Alternative Fuel Vehicles, 2006)
Fuel Cell Vehicles (FCVs) are the most recent buzz in the automobile sector. FCVs will not reach the mass market before 2010 but the technology is expected to transform the transportation industry. FCVs are propelled by electric motors. Whereas battery-electric vehicles use electricity from an external source, FCVs create their own electricity. According to the fuel economy website, “Fuel cells create electricity through a chemical process using hydrogen fuel and oxygen from air. FCVs can be fueled with pure hydrogen gas stored onboard in high-pressure tanks. They can also be fueled with hydrogen rich fuels; such as methanol, natural gas, or gasoline; but these fuels must first be converted into hydrogen gas by an onboard device called a reformer”. (Alternative Fuel Vehicles, 2006) FCVs emit a significantly smaller amount of air pollutants. FCVs have issues that must be resolved before their entry into the market. The vehicles require expensive components which lead to high cost for the customer. Also, a system needs to be developed to store the hydrogen necessary to run the cells. (Tim Scramcik, 2004)
Diesel cars and trucks are changing the previous perception that diesel vehicles are loud and odorous. As gas prices have risen dramatically over the past two years, more consumers have turned to vehicles with greater fuel economy. On average diesel cars and trucks are 20 to 30 percent more fuel efficient than cars powered by gasoline engines. (Lazarony, 2004) As a result of the lower fuel consumption, diesels emit less carbon dioxide (CO2), believed to be a contributing factor to global warming trends. (Consumer reports, 2006) Despite the lower CO2 emissions, diesels emit more particulate and oxides of nitrogen. Therefore, diesels are not considered as environmentally conscious as other fuel alternatives.
Toyota Competition
Honda is Toyota’s most formidable competitor in the hybrid category. Honda produces the only two seat hybrid on the market. The Honda Insight retails at an affordable $20,000 and is marketed as an eco-friendly, high fuel economy vehicle. The Honda Civic Hybrid is categorized with the Toyota Prius as a compact car. The Civic Hybrid was the first hybrid vehicle to achieve Advanced Technology Partial Zero Emission Vehicle status under California’s Zero Emission Vehicle program. The major difference in the Civic and the Prius is the Civic lacks the ability to drive exclusively on its electric motor. (Hybrid-Car, 2006) Honda has also manufactured the Accord in the hybrid model. In 2005, Honda sold more Accord Hybrids, than Ford sold Escape Hybrids. Honda proved that Hybrids can offer performance, amenities and fuel efficiency. The Accord Hybrid, however, will lose market share with the introduction of the Toyota Camry Hybrid. The Camry Hybrid is more fuel efficient as it gets a reported 43 highway miles/gallon compared to the Accord Hybrid’s 37 highway miles/gallon. Hyundai revealed plans to release a Hybrid version of both the Accent and Sonata in 2007. Hyundai chairman Chung Mongkoo believes “Hybrids are the next-generation growth engines” and announced the company will “shift their R&D from fuel cells to hybrids”. (Hybridcars, 2006) Hyundai will develop their own design and to compete directly with Toyota and Honda. Conversely, Nissan does not have plans to develop a Hybrid program CEO Carlos Ghosn states, “They make a nice story, but they’re not a good business story yet because the value is lower than their costs”. (Hybridcars, 2006) Nissan will introduce a Hybrid Altima in 2006, but it is simply an effort to meet fuel and emissions standards in states, such as California, that maintain stringent emissions guidelines.
Volkswagen offers several diesel models. The VW Golf, VW Beatle and the VW Jetta compete directly with the Toyota Prius. Consumers do not sacrifice performance with these vehicles.
SMART is an unleaded fuel-efficient vehicle recently available on the market in the United States. The vehicle is neither electric nor Hybrid, but is competitive with current hybrids. With a tank capacity of 8.7 gallons, the 1599 pound vehicle can travel as fast as 85 mph. (Smart Cars, 2006)
Closing
Toyota, the second large producer of automobiles, has set the stage for years to come in several aspects of the industry. Not only has Toyota set the bar with their business model for all companies, they have paved the way for “greener” pastures for their own and worldwide economies with their technological inspiration. It will be interesting to see how this revolution, which Toyota initiated with the birth of Prius, unfolds in the years ahead.
References
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Norihiki Shriouzu (2005, July 14). Mean but Lean, Toyota Seeks Outside Help; With In-House Quality Gurus in Short Supply, Automaker Turns to Its Affiliates. Wall Street Journal (Eastern Edition), p.B.4. Retrieved April 18, 2006, from Wall Street Journal database. (Document ID: 867761901
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