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Case study on the history of Toyota
Toyota history and background
Strength and weakness of the Toyota production system
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Toyota motor is the world’s leading automaker. In factories around the world, Toyota consistently makes the highest quality cars with fewest defects of any competing manufacturer, while using fewer hours, less on hand inventory, and half the floor space of its competitors. Toyota’s worldwide reputation for quality and reliability (Connor, 2010). Complete with profiles their motors for quality for customers so that it is manufacturing techniques were followed by its competitors in the world. At Toyota quality was in built in to each manufacturing process and employees from all divisions ensured that defective items did not pass on the next process.
Toyota’s products were a byword for quality of customers so much that that it can manufacturing
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The Importance of quality in the Toyota production system.
Toyota production system organize manufacturing and logistics at Toyota, including the interaction with suppliers and customers. Toyota was able to much reduce lead-time and cost using the Toyota production system, while improving at the same time. This enabled it to become one of the largest companies in the world. Toyota applied lessons by reducing the amount of inventory they would hold only to the level that its employees would need for a small period of time. This is called just-in-time (JIT) inventory system.
Toyota began to be recognized in the 1080s for the quality of its vehicles and its responsiveness to customers
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Toyota production system is made different varieties of vehicles on the same assembly line. Toyota discover a production system which focus on eliminating waste of time and raw materials from every step of production process to get higher quality, greater productivity, improved customer responsiveness and better utilization of equipment and
D'AMICO, 2009). The company operational excellence is based on the improvement tools and methods developed by Toyota under the Toyota production system, greatly emphasizing excellent quality and minimal waste.
Toyota recognized quality as one of the most important factors affecting customer satisfaction and strove to achieve excellence in manufacturing products. To ensure zero defects in the finished product Toyota set up quality assurance system across various divisions, including development, purchasing and production.
Toyota production system is focuses on eliminating waste of time and raw material from every step of production process to get higher quality, greater productivity, improved customer responsiveness and better utilization of equipment and space.
Toyota production system empowers team members to make the best quality by improving processes and eliminating unnecessary waste in natural, human and corporate resource. Toyota production systems influence every aspect of Toyota’s organization and include a common set of values, knowledge and procedures. It entrust employees with well-defined responsibilities in each production step and encourages every team member to try for overall
The effectiveness of the production control system helps to improve the quality of the company’s product while still reducing the costs. The company is constantly looking for ways to increase the effectiveness of their production. They want to ensure that the product is at the quality they expect and always are looking to improve the quality of the product. Reduction of costs is another factor they consider, but the company refuses to produce a product that is not the quality they expect no matter what the cost savings are.
During this project, I am going to mention the details of TOYOTA production process system which was developed more than 40 years ago by Taiichi Ohno, the president of Toyota Motor company at that time. The production system that Toyota company uses now and before is relevant to the concept of the process costing system which is currently used in all department of the company.
The HRM strategy in Japanese companies is supported by the six pillars of Japanese employment practice lifetime employment, company welfare, quality consciousness, enterprise unions, consensus management and seniority-based reward systems. Toyota is at the heart of global manufacturing, a company that has grown over 70 years to become the world's third largest vehicle manufacturer. (Toyota worldwide 2006) Toyota is the seventh largest company in the world and the third largest manufacturer of automobiles, with production facilities in 26 nations around the world employing more than a quarter of a million people. The decision to manufacture in Europe was based on a corporate policy of building vehicles where the customers are and The United Kingdom was chosen for many reasons including its history of vehicle manufacture, the large domestic automobile market, its components supply base and its excellent links with the rest of Europe.
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.
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
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.
Different nations within which Toyota operates have different political, technological, social, and cultural environments. To safeguard the company’s overall image, there must be effective communication between the head office and regional quarters. This is especially important in the area of quality control, as Toyota currently grapples with safety issues facing several of its car models.
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 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.
(The origin of the Toyota production system, n.d.). These ideals led to the Just-in-Time method, which is a practice of only making what is needed, when it is needed, using only the amount needed. Just-in-Time is incorporated within the continuous improvement method being that if all elements are performed efficiently and effectively, then it is evident that the corporation will have a lesser chance of becoming stagnant. Their ability to focus on research and development allows them to keep their technological advantage at bay amongst their products, which in turn leads to innovation and sales.
...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.
In 1950s, Toyota has developed lean thinking. The Toyota Production System aspires to minimize waste and increase efficiency while at the same time enhances its product quality. From this initiative, Toyota managed to widen its competitive edge by employed fewer employees in the car production with a small number of flaw products.
• 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.
Toyota has implemented many different systems such as performance monitoring software, the Just in time (JIT) inventory system, electronic quality control system, communication system and information system thought out their value chain which enable to make correct decision during the manufacturing process. They have identified that having large inventories of spares cost them extensive capital and they have implemented the Just in time (JIT) inventory system which advices the suppliers the exact spares that the product line required and provides a time frame. Toyota adopted continuous learning and embraces change allowing their staff to research and innovation (Toyota