A Case Study Of Toyota

History of Toyota

The roots of the motor cooperation can be dated back to 1890s when Sakichi Toyoda designed an operated loom. Toyoda designed and patented a manually operated loom which automatically stops the machine when a thread broken in weaving cloth that greatly improved worker productivity and avoiding the production of defective cloth (Meyer, 2005) . Kiichiro Toyoda and Taiichi Ohno were greatly influenced by American industrialists and Production and management practices (Ohno, 2008). The correct practice of Toyota’s management system – Lean management – would require, at a minimum, acknowledgement and practice by management of both principles: “continuous improvement” and respect for people (Meyer, 2005) .

Toyota Motor Corporation is considered to be the number one automobile maker in Japan and it’s the second largest manufacturer in the world after General Motors. It has an international presence in more than 170 countries. The sales turnover of 131,511 million in 1997 and sales growth of 29.3% makes company more strong in the financial base. It uses advertising techniques to identify and satisfy customer needs. Its brand is a household name.

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The cooperation is one of the trusted names with brand of quality, performance and being consistent with the environment needs. The motor cooperation is considered of the top brand quality in the international sector and it has successfully penetrated in the global markets. It was able to enter the markets in the Asian as well as the European areas along with making a tough competition to the rivals such as Ford, GM.

The Toyota Motor cooperation was able to enter the automobile sector because of its innovative designs, marketing techniques, global acceptance and the quality of the production. The company has been a front participant in the innovation of the automobiles. It was one of the first automobile manufacturers to start lean manufacturing and its purpose was to make

Lean manufacturing and Just in Time

The process is much quicker. The lean manufacturing system which is also known as the Toyota Production system is a well-organized process by which the there will less waste compared to the conventional and queue technique of production. The new production system also applied smart automation and Just in Time manufacturing (JIT).

The success of the company can be measured from its product development. The Cooperation has reputation of developing cars which are safe to the environment with high-quality performance and more fuel resourceful. It was the first automobile company to market hybrid cars based on gas and electric fuel in advance of the associate competitors. This design was marketed to remain with the governmental regulations as to compensate the international economic changes with rise in the increase in prices of fuels all around the world.

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The Toyota Motor Company made a worldwide manufacturing representation and it moved the sites of production of the different parts of the car to different locations in the world. The sites of the manufacturing are high-priced and require costly investments. So this new method by the motor cooperation has been successful in reducing the cost of the mass production. This move has been triumphant in the cost effective programmes compared to the production and assembling of the cars in one setting.

The Toyota Production System (TPS) was ventured by the company and it was developed by Taiichi Ohno,Shigeo Shingo and Eiji Toyoda between 1948 and 1975.The system is composed of various components. In Toyota Taiichi and Shigeo integrated the Ford production and techniques to develop the TPS. It was based on the central role of inventory.

The main areas of the lean manufacturing are: Cost, Quality, Delivery, Safety and Morale.

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The motor company made valuable decisions by considering that the factory labours are contributing than the muscle influence. In TPS there was in cooperation of team development and cellar manufacturing considering the respect of the factory workers.

In this lean production system there were opportunities for potential new products and this varied nature will help the company to cope with numerous and innovative products. Shigeo Shingo based on the suggestion by Ohno reduced setups to minutes and seconds authorized minute batches. This reduction of setup, in the company introduced flexibility in the motor cooperation.

Advantages of the lean production:

80% reduction in waste production.

50% reduction in cost production.

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50% of decrease in the manufacturing cycles.

50% reduction in Labour in the process.

The customer services are increased due to the inventory reduction by 80%.

Increase in the current amenities by 50%.

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Quality improvement

Privileged profits

Advanced system flexibility to accommodate the changes and improving the requirements.

Further tactical strategies

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Increasing the shipping and billing and thus improving the cash flow.

Drawbacks of Lean production

The lean production is not with any faults as there are some failures which can be summarized as

Executive issues

Cultural issues

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Management issues

Implementation issues

Technical issues.

Mejabi (2003) stated that “each one of these categories is important and if taken into consideration can cause possible obstacles in the path to lean manufacturing” These are interconnected to each other.

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Steve L. Hunter lists ten steps to put into practice a lean production system: which consists of the following:

Obtain the manufacturing system

Decrease setup

Incorporate quality control

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Combine preventive maintenance

Level and equilibrium the system

Add a pull system

Manage inventory

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Computer integrated manufacturing benefits

Programme with vendor.

The international market openly accepted the lean production system and included to attain maximum productivity. The application of the principles of the lean production is confronted with elevated pounding excellent performance results. These principles are made played in the world by most of the companies for eg: Kia Motors in Korea. The Kia Motors in Korea made change from supply oriented production system to a flexible lean production approach. The company implemented lean production approach in the plant in Sohari where the skills of the factory workers were utilised completely based on the in agreement relations between the company and employees. Thus the KIA Company produced a hybrid production system at Sohair plant and it was more flourishing than the plant in Asan.

Toyota Porter’s Generic Model

As Porter’s Generic Model is important for all kind of the business to improve the business performance similarly it is important for the Toyota to improve the business and compete in the automobile industry. From the Porter Generic model the Toyota mainly focusing on differentiation strategy and in the same time cost leadership. One of the biggest priorities for these companies is to produce high quality products with lower prices and also cut the carbon emission because most of the government . The Toyota is investing huge amount of the budget on the product quality and alternative products. The key to the success in the car market is new model which stimulate demand and loyalty to the Toyota brand. Toyota has reputation for producing cars which are greener, more fuel efficient and of good performance. Through the developments of hybrid fuels. The Toyota was the first car manufacturer to market hybrid (gas and electric) fuel with the launch of Prius model ahead of compotators. (Businessteacher).

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Competitiveness

In the context of international competitiveness of industries in developing countries there are five elements which can be recognized as most tactical and they are:

1) Technology,

2) Human resources,

3) Organisational structure,

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4) Government

5) Role of capital and finance.

The lean production system was introduced and was incorporated in the India. The lean production made the Indian firms to improve the quality and reduce the production costs.

This will help the Indian firms to become suppliers in the international markets and thus obtain profits by lowering the costs. The flexibility and minute batch production was tailored to the customers and it meets up the deliverance of schedules. This lean production system boosted and lowered the recession in the internal markets by taking exports. The increasing demands of the resources were effectively used and there was efficient consumption of the resources in the internal markets.

Recommendations:

The most strategic element in achieving the competitiveness is to incorporate change.

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There should be improvement and tailoring the technology for the needs of the customers so that there will maximum productivity.

There should be purchasing power with the help of the governmental regulations and prioritize the public investment.

The regulations should employ at the same time in one location so that there will be more production in the firms.

To achieve greatest thrust to efficiency and productivity this will help in reducing costs. This can be achieved by give by the integration of agriculture economy with industrial economy, of the small units with large units and of manufacturing with services sector.

Conclusion:

The Toyota is leading company in the Japan and well reputed in the world automobile industry. The company mission is to build trust and confidence with customer by delivering outstanding quality products and service. For that Toyota is investing huge amount of the budget on the R&D to produce new things for the customer by saving the environment. According to the Toyota the environment responsibility is the cornerstone for the good business in new world. Where Toyota is gaining the advantage of the first mover in the Asian market as its compotators could get this advantages. The Toyota is targeting all segment of the market in world and producing differentiation and cost leadership products to get more market share of the automobile industry

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Profits increased from 0.8% to 1.17 trillion yen ($11bn; £5.85bn), while sales were 7.3% higher at 18.55 trillion yen. In 2003 Toyota knocked its rivals Ford into third spot, to become the World’s second largest carmaker with 6.78 million units. The company is still behind rivals General Motors with 8.59 million units in the same period.

The strength of the company is its diversified product range, highly targeted marketing and a commitment to lean manufacturing and quality. The company also maximize profit through efficient manufacturing approaches

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