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Management of Toyota
Toyota production system success
Management of Toyota
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Creating Sustainable Competitive Advantage: The Toyota Philosophy and Its Effects
What is Toyota Philosophy
Toyota is Japan's biggest car company and the second largest in the world after General Motors. The fundamental reason for Toyota's success in the global marketplace comes from their corporate philosophy, the set of rules and attitudes that govern the use of its resources. The Toyota philosophy is often called as the Toyota Production System. The system depends in part on a human resources management policy that stimulates employee creativity and loyalty but also, on a highly efficient network of suppliers and components manufacturers. Much of Toyota's success in the world markets can be attributed directly to the synergistic performance of its policies in human resources management and supply-chain networks.
Toyota philosophy in Human Resources
Although many other Asian automobile manufactures have earned a reputation for building high-quality cars, they have been unable to overcome Toyota's advantages in human resource management, supplier networks and distribution systems in the highly competitive US market.
The evolution of Toyota's advanced human resource management can be traced to the period immediately following the Second World War when the economic outlook was uncertain and human, natural and capital resources were in limited supply. The company developed a highly efficient production system, called lean production to utilize human resource more efficiently. Today, Toyota's philosophy of empowering its workers is the core of a human resources management system. It grows creativity and innovation by encouraging employee participation, and brings high levels of employee loyalty.
Toyota Philosophy in Supply chain management
In-house production has been decreasing for a number of years. Among US car makers, General Motors continues to manufacture a high percentage of components in-house, while DaimlerChrysler outsources more than any other firm. Volkswagen, a German brand, produces on average less than 50 per cent of its automotive components in Germany.
Outsourcing is increasing the importance for car makers because 85 percent of the direct cost of car production comes from engineering and component fabrication. The companies try to externalize many of these direct costs and minimize market risk. They also can receive the benefits of using specialized suppliers.
In Japan, supply chain relationships of Toyota are based on a complex system of co-operation and equity interests. Co-operation and asset concentration are encouraged, and antitrust prohibitions are far less restrictive than in the US.
It is also important to understand that both government and culture play a major role in Asian manufacturing and distribution practices.
The development and implementation of Toyota’s lean production system has set a benchmark in the automobile industry and inspired many other companies in the automobile industry and other industries as well to adopt it.
As most Americans know, the car-making industry has gotten very competitive in the last decade, with most of that competition coming from European and Japanese brands. A large contribution to the rise of foreign cars and fall of American cars has to do with the recent downfall of General Motors, a well-respected American auto-making manufacturer for years. “The partial collapse of General Motors (GM) is an important benchmark in American history. The bankruptcy of the major car manufacturer marks the end of the auto-industrial 20th century in the USA and starts a 21st century, hi-tech society” (Veldman). Recently, foreign cars have gotten the leg up in respectability and longevity of their products.
For over fifty years, Toyota has established over 50 bases in 26 different countries and regions. Their automobiles have found their way into over 170 countries across the entire globe. In addition, Toyota has design and R&D bases in nine locations overseas, with this they prove that they have achieved consistent globalization as well as localization. The most important part in any Toyota base is the quality assurance. They don’t stamp their product with “Made in the USA” or “Made in Japan”, but instead opt for one label for all: “Made by TOYOTA.” This shows that the product is made in the “Toyota Way.” To achieve this, the company minimized support that comes from Japan to let each of their foreign locations become self-reliant. For example, a Toyota plant recently began production in Texas has made maximum use of its sibling’s experience in Kentucky which has been cultivated over the past 20 years. Toyota believes that in order to reach their goals is through educating people. Multiple Global Production Centers have been built within Motomachi Plant in Toyota City, in United States, the United Kingdom, and Thailand to carry our corresponding activities in the Asia-Pacific, European, and North American regions. To promote the “Toyota Way”, the Toyota Institute established an internal human resources development organization in North America, Europe, Asia, Africa and Oceania. As you can see the pros of the globalization of Toyota are endless. This company alone has created millions of jobs across the world. Winners are not only the workers, but also the buyers, without globalization Toyota automobiles would only be available in Japan. Many people, including me, see globalization of this kind as a beneficial and advantageous result. Toyota companies have not only created jobs for thousands if not millions of people, but their
Outsourcing labor and materials in a global market can significantly stretch the supply chain structure. This can have both positive and negative effects. Looking to different countries provides the opportunity to access different markets and find the lowest possible manufacturing costs. Many companies also embraced the Toyota Motor Corp. model of just-in-time inventory and other lean manufacturing techniques that emphasized speed and cost reduction (Bosman, 2006...
The company that the author has chosen to compare his own organization with is the Toyota motor company. The Toyota Company has become a renowned leader in the area of quality management. Toyota’s theory of “keep it lean” has kept the company running at a level that eclipses the industry standards.
Toyota Motor Corporation is a very successful automobile manufacturer that is recognized globally. They have continued to obtain and retain a competitive advantage over their counterparts, despite recalls over many years. Regardless of recalls, Toyota has been quick to rectify their shortcomings and continue to lead within the automotive industry with their innovative measures. In this essay, I will discuss key internal factors for Toyota. Within those factors will include Toyota’s core competencies, which are what they do really well in comparison to their competition, three of their strength’s, which will include their posture within the automobile market and their heavy focus on research and development, and two of their
Toyota Motor Corporation operates globally with the automobile industry, which includes 522 worldwide subsidiaries (Toyota, 2010) (Sagepub, n.d.). Toyota's mission is aligned with the needs of their stakeholders to a degree. Toyota's mission is in line with long-standing philosophies; they have designed their mission to supersede short-range decisions. Toyota's philosophical principle is to "work, grow, and align" the enterprise in the direction of a universal rationale, which the Toyota Motor Corporation states is "bigger than making money" (Toyota, 2010).
The automotive industry is involved in the manufacturing and distributing of cars and specific car parts such as car bodies, drivetrains, engines and transmissions. Car companies in the industry manufacture these cars in their factories often using parts purchased from specialized companies (ex: company only producing transmissions) or parts produced in their own factories. These cars are then purchased by car dealerships (independent franchises selling cars to consumers) for display, test-driving and ultimately for consumer purchase. Today several extremely large firms dominate the automotive industry, each with footprints in almost every market around the world. Each car company typically owns several other subsidiaries
Toyota’s uses both differentiation and low cost as generic strategies to try and gain a competitive advantage over their competitors in the automotive industry. The market scope that Toyota uses is a broad one that encompasses nearly every type of customer that is in the market to purchase an automobile. Toyota is able to target such a large market because they have something for everyone. Toyota has four wheel drive trucks and SUVs for the outdoor types or those who live in areas that face severe weather conditions, hybrid models like the Prius for the eco-friendly customers that are interested in saving the environment, along with the standard cars for general, everyday use. Additionally, Toyota provides vehicles for all price ranges.
Toyota Motor Corporation is one of the largest automakers in the world. At its annual conference in Tokyo on May 8, 2008, the company announced that activities through March 2008 generated a sales figure of $252.7 billion, a new record for the company. However, the company is lowering expectations for the coming year due to a stronger yen, a slowing American economy, and the rising cost of raw materials (Rowley, 2008). If Toyota is to continue increasing its revenue, it must examine its business practice and determine on a course of action to maximize its profit.
Generally, a superior supply Chain is an important and unique source of competitive advantage. Its importance is especially illuminated in Multinational companies such as Toyota. Putting this into consideration, the question that now begs for an answer is whether Toyota’s supply chain is effectively serving the organization. Without a doubt, Toyota ha...
Toyota- focused differentiation, medium pricing, breadth of product line is low. Company is known for quality products, and nice styling.
In the 1980’s successful Japanese firms proved to be leaders in modern management techniques with strong relationships with suppliers, allowing them to produce products of a higher quality and a faster rate than their American and European counterparts. (Ehret, 2004) Their business model focused on economies of scope, as opposed to economies of scale. Industrial firms realised they needed to manage buyer-seller relationships in order to manage cross-functional and cross-organisational processes that would allow them to become more flexible.
Toyota has adopted an expansion strategy aimed at increasing the company’s market share through sustainable growth. This will be done based on the delivery of high quality, and safe cars, at an affordable price. As the company seeks to expand to new markets, focus will be on maintaining an organizational culture that allows optimum efficiency in the ever dynamic global market.
Nonmanufacturing companies can learn and apply Toyota’s philosophy and practices as listed below. i) Learn to think. In the 1950s, Toyota developed lean thinking. The Toyota Production System aspires to minimize waste and increase efficiency while at the same time enhancing its product quality.