Shigeyuki Hori: Automotive Planning and Development
Shigeyuki Hori was a Toyota chief engineer for fifteen years across fifteen vehicle programs. His book Automotive Planning and Development is the most candid insider account of the chief engineer's real job: honest cost engineering down to the part, the groundwork done before a program is approved, and the political danger of reporting numbers superiors do not want to hear.
Shigeyuki Hori: Automotive Planning and Development
Shigeyuki Hori (堀重之) spent fifteen years in Toyota’s product-planning department as a sub-chief engineer and chief engineer. He worked on fifteen vehicle programs. His book Automotive Planning and Development walks the entire process from concept to factory line-off. The actual book contains by far the most images, cost examples, and parts of technologies, etc. compared to others on the topic. Of the chief-engineer books, it is also the most candid about the less glamorous core of the job. Honest cost engineering down to the part level. The groundwork done quietly before a program is approved. And the political danger of a chief engineer who reports numbers his superiors do not want to hear. Hori writes about his time as a working engineer, and he is unusually willing to describe how the job really goes wrong.
For the role of chief engineer in general, see the main guide, What Is the Toyota Chief Engineer (Shusa) System?.
Who Was Shigeyuki Hori?
Shigeyuki Hori (堀重之) earned a doctorate in engineering and joined Toyota’s product-planning department. Over about fifteen years he worked as a sub-chief engineer and then chief engineer, and later rose to executive chief engineer. By his own account he was involved in planning and developing fifteen vehicle programs. His work spanned sporty cars such as the Celica and MR-S, sedans such as the Premio and Allion, the Avensis, and the Opa. He also did cost planning for the Lexus LFA and the US Camry, and later for the next-generation MIRAI fuel-cell vehicle.
What Happens to a Chief Engineer Who Reports Honest Numbers?
Hori does not romanticize the role of chief engineer. The sharpest thing in the book is what happened to him for being too accurate.
A specific type of fuel-economy system had started appearing on a rival’s cars, and Toyota had to decide whether to roll it out across all its vehicles. Cost estimates were prepared and the cost-reduction work did not progress well. Hori, who was good at this kind of value-engineering work, was put in charge. He re-estimated the cost and improved its accuracy. The true cost came out higher than the earlier figure. The previous estimator had baked hoped-for reductions into the number, apparently under pressure to show something lower. After Hori submitted the honest, and higher estimate, he was removed from the assignment. The system’s adoption was postponed in the end, because the cost really was that high at the time.
The same pattern repeated years later on the next-generation MIRAI. The fuel-cell unit uses a large amount of expensive platinum, so it is very hard to make cheap. When Hori improved the estimate’s accuracy and reported the high accumulated cost, the assignment was handed to another staff member. The estimate was likely revised on top management’s instruction to include future expected values. Hori’s advice is clear however on the topic. Planning members must always study cost, work to detect the accurate number, and share the correct cost honestly with their superiors, whatever it costs them.
Hori shows that political danger reaches further than cost. He recounts a veteran chief engineer replaced one year before line-off, after more than three years on the program, over a disagreement with superiors in the planning department. A sound concept is not enough. The chief engineer must also keep the trust of the people above him at all times. Technical proficiency is only part of the job.
How Did Hori Do Cost Engineering?
Cost planning is the part of the job Hori treats most seriously, and he reaches further into it than the other chief-engineer books. He argues a chief engineer cannot cut cost by bargaining down a supplier’s price or waiting for the supplier’s proposals. He has to fundamentally determine the manufacturing process of the part itself.
He contrasts two ways to estimate a vehicle’s cost. One is the difference-cost method and it counts only the changed, added, and discontinued parts against the base car used in comparison. It is faster. But it never reexamines carried-over parts, so old supplier prices and inefficient methods stay hidden inside them. In contrast the “all-parts” method estimates every part on the car, new or not. Each part is broken into material cost, processing cost, painting cost, assembly cost, equipment investment, development cost, and supplier profit. That makes the whole car visible. If processing cost is high, change the method. If material cost is high, reconsider the material. Cost planning becomes an engineering activity, not an accounting exercise.
On the Opa vehicle, Hori tried to switch the company from difference-cost to all-parts estimating. Accounting rejected it at first. It went in incomplete, was corrected during the Premio, and was eventually applied to every model. To make it work he persuaded the head of purchasing to have suppliers submit estimates for nearly every part. Hori tells several examples with concrete results. In one the outside-temperature sensor had been a separate part joined to its connector by a sub-harness that needed soldering and waterproof potting. The value-engineering proposal integrated the sensor and connector together, which eliminated the sub-harness, the soldering, and the potting. The estimated cost for these components fell to less than a third. The chief engineer and team have to think at this detailed level if they truly want to reduce cost.
Hori is firm about the manner of this type of work. A chief engineer should not just point at the expensive parts of an estimate and call the supplier “overpriced”. He must ask why they are expensive, find the waste, and then remove the cost through a better design. In return for the supplier lowering its price, the designer owes the customer an attractive vehicle that sells more, generates more orders, and keeps the supplier’s profit intact.
What Groundwork Happens Before a Program Is Approved?
Much of a chief engineer’s preparation happens before the company has authorized the work and before any budget even exists. Hori is candid about this below-the-surface activity.
To prove an ambitious performance target is reachable, the team needs evidence before the approval meeting. The Opa vehicle laid its windshield back and pushed the base of the glass forward for a new look, which raised a worry about downward visibility. So the team built a modified test car with the glass moved forward and ran driving tests. The result showed visibility was actually better than an ordinary sedan. With that proof in hand, the chief engineer could enter the planning-approval meeting with confidence.
Cars like that get approval sometimes before any project budget even exists. Hori says the work was done by asking colleagues who were keen on driving performance, or by arranging to use leftover budgets from other projects. It runs on trust and personal relationships across departments. It requires a network of colleagues willing to support you. And because superiors will eventually learn of it, it also needs senior managers who understand and tolerate the work.
How Did Hori See the Chief Engineer’s Role?
For Hori the planning department in Toyota is the command tower of development. It sits at the center, holds the planning document that points every department the same way, and is the window to everything outside the development center. The chief engineer is the person who carries a vehicle across every organizational boundary it has to cross.
He is clear that the lever is not authority. Engineering wants feasibility, sales wants price and equipment, production wants manufacturability, finance wants profit, and the hard conflicts they cannot settle land on the planning department. The chief engineer has to decide in a way both sides can accept, and when they cannot fully accept it, persuade the losing side logically so it will still move forward. He calls planning the entire vehicle a series of battles and he means it. Being an engineer is only the first condition. The rest is controlling human relationships well, earning the trust of staff and superiors, and leading.
Hori is also honest about his own mistakes, which is rare in these books. The Opa was built on the theory that buyers would graduate from large one-box family cars to a roomy two-row car. Once it launched, almost none of those anticipated buyers appeared. The customers came from sedans instead. Hori reflects that the team should have listened to actual one-box owners and checked whether the target users were really there. He believed the car satisfied the people who bought it, but the premise had been the team’s own assumption.
What Is the Book?
Automotive Planning and Development: The Process from Concept to Completion (自動車の企画と開発―構想から完成までのプロセス) is organized around the development process rather than around the chief-engineer role as a subject. It moves through the triggers that start a program, planning, vehicle development, cost planning, weight planning, sales preparation, and line-off. It is full of pictures and examples. It is the most complete example of product development practice in Toyota as a system. The chief engineer sits at the center of every chapter, because in Hori’s telling the planning department is the command tower and the chief engineer carries the car forward or not. He explains the work in concrete, sometimes technical detail, with real figures and his own programs as examples. Grand Prix Publishing released it in 2022.
Where to Buy
Automotive Planning and Development (自動車の企画と開発―構想から完成までのプロセス) is published by Grand Prix Publishing, March 2022, 184 pages, ISBN 978-4-87687-393-7. It is available in Japanese through Amazon.co.jp, Kinokuniya, Rakuten Books, and other Japanese booksellers. There is no English edition.
Sources
This article draws on Shigeyuki Hori’s Automotive Planning and Development (自動車の企画と開発, Grand Prix Publishing, 2022), a Japanese-language primary source by a former Toyota chief engineer, together with firsthand knowledge of the Toyota chief engineer system. Quotations translated from the Japanese are the author’s renderings. AI was used in the editing of this article.
Art Smalley is president of Art of Lean, Inc.