Toyota Cost-Cutting: How Fewer Parts Cut Complexity

Toyota is targeting lower costs and higher profits by simplifying vehicle components, reducing part types, improving productivity and cutting unnecessary processes.

Toyota wants to make vehicles simpler

Toyota cost-cutting is taking a surprisingly simple direction. Toyota Boshoku, one of the automaker’s major suppliers, wants to reduce the number of individual parts used in its products.

The company is targeting a 7 percent operating profit margin by 2030. Its current forecast for this year stands at 3.8 percent.

To reach that goal, Toyota Boshoku plans to increase the value of its products. At the same time, it wants to reduce manufacturing costs and improve productivity.

One of its main targets is called RPT33. The programme aims to reduce the number of part types by 33 percent.

The idea is straightforward. Fewer unique parts can mean less complexity during development, purchasing, manufacturing, storage and logistics.

Toyota Boshoku is already using this strategy in real products.

The company says collaboration with automakers has helped produce a 76 percent reduction in headrest components in one example.

That does not necessarily mean building a cheaper product. Instead, the objective is to create the same basic function with fewer individual pieces.

This can simplify several stages of the production process.

It can also reduce the number of components that suppliers and factories need to manage.

For a company that produces large numbers of seats and interior parts, that difference can have a major effect on costs.

Fewer parts can also mean lighter seats

Toyota Boshoku is applying the same philosophy to its next-generation seat frames.

The new structures are designed to use fewer parts and fewer manufacturing processes. The company also wants to increase the amount of work carried out in-house.

Weight reduction is another target.

Toyota Boshoku says its next-generation seat frames will be 20 percent thinner than the thinnest competitive product. They are also designed to be 5 percent lighter than the lightest product currently available.

That combination could provide benefits beyond manufacturing.

A lighter seat can contribute to overall vehicle weight reduction. The same principle applies to other components throughout a vehicle.

The company is also looking beyond physical components.

One of its targets is something much less obvious: meetings.

Toyota Boshoku wants to reduce total meeting time by 42 percent through its “stop, change, and find a better way” initiative.

The objective is to remove wasted time from everyday operations. That same philosophy applies to manufacturing and logistics.

AI is also expected to play a role.

Toyota Boshoku plans to use automated design tools and process innovation to identify inefficiencies and reduce waste.

The broader strategy is therefore not limited to cutting the price of individual components.

Instead, the company is trying to simplify the entire system behind them.

Toyota Boshoku is also chasing other automakers

There is another important part of the plan.

Toyota Boshoku wants to expand its business beyond Toyota itself. The supplier wants sales to customers outside the Toyota Group to reach three times its 2022 level by 2030.

That means the cost-cutting strategy also has a growth objective.

By producing components with fewer parts and more efficient processes, Toyota Boshoku can potentially offer competitive products to a wider group of automakers.

The company already develops seats and interior systems for a broad range of vehicles. Its portfolio includes solutions for compact cars, SUVs and premium models.

That experience could help Toyota Boshoku scale its approach.

The strategy also reflects a wider automotive trend.

Automakers and suppliers are looking more closely at the number of parts used in vehicles. Every additional component can add cost and complexity.

Volkswagen Group is pursuing a similar idea on a much larger scale. The group is working to simplify its product portfolio and reduce the number of available options.

Toyota’s new leadership has also questioned whether its own model range has become too large.

For Toyota Boshoku, however, the immediate focus is more specific.

Fewer part types, fewer manufacturing steps and better use of existing assets are at the centre of its plan for 2030.

The approach could make products easier to manufacture and manage while also creating opportunities to reduce weight.

At the same time, Toyota Boshoku wants to increase the value of its products and expand its business with other automakers.

The core idea is simple: make fewer parts, simplify the process and use the resources more efficiently.