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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
•
Some American made cars are not built with the elegance of the Japanese cars. The engine is likely to be larger and can be quite louder, their vehicles are less reliable and safety consideration is even less. So, with this, they are known to be inferior to Japanese cars. Speaking of which, Japanese cars are known for their sleek look and speed capabilities, they are a popular choice among Americans. When in fact the Japa...
BMW having high market share in European and U.S luxury car markets, started facing issues with launch product qualities and also facing a fierce competition from Japanese producers. Currently the market share was still stable but the rigorous growth of Japanese producers would affect BMW in future. These Japanese competitors had set higher standards of conformance.
Thesis: Even though there is a lot of skepticism towards Chinese car companies making a foothold in the American car market, with the right marketing and not rushing into the market, there is a good chance that the Chinese car companies will follow the Japanese car companies and carve a spot in the American market.
Consumers were shifting their focus to cheaper, smaller, and more gas efficient Japanese and German imports; there were more than a million imports sold and registered by 1970. These Japanese and German competitors were starting to dominate the small-car segment of the auto industry. American car companies knew they had to respond to keep up with this growing car sector.
According to Toyota, they have undertaken a manufacturing revolution that has fundamentally changed established practices; all the way back to the product development and design. They have done this by integrating four areas: design, production engineering, procurement, and component supply. They have achieved higher quality at lower costs by creating standardized, multipurpose components. Also the reduction in cost has heightened the value and fortifies the competitiveness of product. To do this, Toyota has required intensive coordination with its suppliers. Another factor of their Integrated Low Cost is that Toyota steadily feeds cost improvements back into the product to raise their value along with the fact that four Toyota’s seven corporate auditors are outside corporate auditors.
(5) Liker, Jeffrey K. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. New York: McGraw-Hill, 2004. Print.
Its objective is to integrate people, process, and technology. Toytoa’s product development procedure is essentially different from a manufacturing process. Its backbone is not visible, but knowledge and information which are untouchable. The product development’s cycle time is much longer than hours. It usually takes weeks or even months. The production chains are non-linear and multi-directional. Workers are no longer manufacturing workers but specialists with high diverse technology. This product development strategy is viable for Toyota. This is because this strategy does help Toyota to prolong the life cycle of current product. For instance, Toyota Camry is a very successful current product which is prolonged its life. Camry has been made since 1980s. Camry is set at an middle-high level of family veichle. After 30 years development, Camry is still very famous all over the world. This cannot be separeted by Toyota’s successful product development strategy. One of the key features of the Toyota product development system is functional engineering managers. They are primarily teachers in the Toyota system, who are the most technically competent engineers, with the highest levels of experience. Toyota’s management group is consist of high educated experts. They were all engineers and their technical excellence is very famous. But recently, Toyota’s product development system does not work very well. In
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.
The objective is to become a leader Toyota Motors cost leadership strategy entails minimizing selling prices and controlling costs, such as reducing cost of operations (Thompson, 2016). They accomplish this through the Toyota Production System (TPS). TPS was established based on years of continuous process improvements. The organizations overall objective was creating the ability to produce vehicles more efficiently, effectively, and
Toyota is a pioneer of the LEAN manufacturing principle. Lean, as a process, is a way to add value to customers while minimizing waste (LEI, 2011). It can also be thought of in terms of flow, which is how Toyota likes to think of it. It is simply a process of decision making where the problems tend to be thought of in terms of flow, reducing starts and stops or unnecessary motion increases flow, reducing waste.
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.
These core competencies are a part of their production system, better known as the Toyota Production System (TPS). The TPS is based on the philosophy of “completely eliminating all waste”. Excess inventory, defective products, and unnecessary processing steps are all inclusive when discussing excessive waste, which eventually negatively effects the corporation as a whole. In 1924, Sakichi Toyoda created the Toyoda Automatic Loom, which improved productivity and work efficiency by eliminating wasteful practices and defective products. Kiichiro Toyoda believed that “the ideal conditions for creating things are more successful when machines, facilities, and people work together to add value without generating any waste.”
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.
• While making a methodology is challenging, executing it is considerably more troublesome. Numerous organizations comprehend Toyota Production System now, yet at the same time think that it is troublesome to execute and implement.
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