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toyota manufacturing case study
toyota history and background
toyota production system advantages
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TOYOTA PRODUCTION SYSTEM (TPS)
The Toyota Production System (TPS) is a unique system of producing vehicles developed by Toyota. The goal is to make and deliver vehicles and most efficient way possible. Also known as “The Toyota Way”
TPS arise of necessity due to the circumstances surrounding the company. Many of the concepts are unique to Toyota while others have their backgrounds in more old-fashioned sources.
TPS was established on two concepts
• Jidoka
• Just-in-Time (JIT)
The oldest part of the production system is the concept of Jidoka which was created in 1902 by Toyoda founder Sakichi Toyoda. This concept relates to the view of building in quality at the production process as well as enabling separation of man and machine for multi-process
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For example in supermarkets only the items to be stocked when they are needed, and then only in specific amount that meets demand.
Most importantly Toyota production system emphasizes the human development and a long-term view. Workers themselves are respected as a precious resource, and Toyota works to grow staff members by providing free education and skill training programs.
This dedication towards staff and long-term vision that have helped Toyota become one of the biggest automaker in the world.
IMPORTANCE OF TPS
Japanese automobile industry which has been started from zero base has grown in accordance with Japanese economy expansion.
Then, Japanese cars have overwhelmed to American cars based on the price and products competition.
Japanese automobile industry has reached the biggest country in the world more than the American automobile industry in the car production.
TPS influences every aspect of Toyota’s association and includes a common set of principles. It trusts workers with well-defined responsibilities in each production step and encourages every team member to strive for overall improvement.
As a result, Toyota Production System delivers the following key benefits:
• Quality
• Costs
•
One of several aspects of the Toyota production system that differ from The GM system is that Toyota puts a flow into the manufacturing process, while GM has lathes located in the lathe area, milling machines in the milling area Toyota places a lathe, milling machine and a drilling machine in the actual sequence of the manufacturing process.
(5) Liker, Jeffrey K. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. New York: McGraw-Hill, 2004. Print.
Toyota was forced into adapting its strategies to different marketplaces as well as altering its management style. For example in Toyota UK the organisational structure corresponds to the traditional Toyota system which encourages team working and communication between workers this was done through training, sharing of information and knowledge between teams and team members. The fact that Toyota dealt with trade unions, shows departure from traditional Japanese organisational behaviour represented innovative adaptations on the part of the company to operating in the UK.
TPS is based on the Lean Manufacturing concept. This concept also includes innovative practices like Just in Time, Kaizen, and Six Sigma and so on. Toyota has worked tirelessly over the years to establish this distinctive competence. No other automobile manufacturer can do it as well as Toyota does. This distinct competence has led to a competitive advantage that has given Toyota a sustainable brand name and a market leader position.
Salespeople need to know the history of the company, how the company has grown, and how the company runs currently. According to Toyota Global, the company was founded on August 28, 1937 in Japan, by Kiichiro Toyoda. The company has grown steadily over the years, and currently the Camry is one of the most popular cars in the world. Toyota has manufacturing companies it does business with in 27 different countries. Toyota’s vision statement is “Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people” (Toyota Global). This statement shows Toyota places an emphasis on innovation, safety, and environmental responsibility. Forbes states the company has over $255.64 billion in sales making it the ninth most valuable brand in the
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
As one of the leading automobile manufacturers in the world, Toyota ranks within the top three worldwide. Due to their unique business model, they are now have a market share of 14% in the first four months of this year. That is an astonishing 2.3% jump from the previous year. According to Autodata.com, the Toyota City based automaker ranks fourth in United States sales.
Although Toyota USA’s Mission states "To attract and attain customers with high-valued products and services and the most satisfying ownership experience in America." Toyota’s Group uses an official statement called The Global Vision (refer to http://www.strategicmanagementinsight.com/mission-statements/toyota-mission-statement.html or http://www.toyota-global.com/company/vision_philosophy/toyota_global_vision_2020.html...
...emained pretty much the same. Customers first - all others follow. Unlike many companies, who work just to appease the shareholders, Toyota's mission is their customer and workforce. Toyota learned early on that happy employee's work harder and smarter, which in turn creates greater customer satisfaction, creating better earnings for their shareholders.
All employees of Toyota are satisfied with lower level needs, they make great wages, they have job stability, and the job sites are full of safety initiatives and well planned (Liker, 2004, p.210). Toyota also provides family benefits to help with raising children and the wellbeing and health while at work, with all these benefits employees are content and can focus on big picture ideas. Toyota promotes a strong team mood and a sense
The nonmanufacturing companies can learn and apply from Toyota’s philosophy and practices as listed below:
Toyota- focused differentiation, medium pricing, breadth of product line is low. Company is known for quality products, and nice styling.
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.
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.