Research Articles Base: Toyotaâ€™s Production System

TOYOTA STRATEGIC CAPABILITIES

TOYOTA STRATEGIC CAPABILITIES Background of the Auto industry             The auto industry under consideration is Toyota Motor Corporation. Being among the premier auto-manufacturing industries in the global environment, it offers a vast variety of automobiles from mini-vehicles to huge transportation vehicles. It was generateed in 1957 by Kiichiro Toyoda, son of Japan’s “King of Inventors” Sakichi Toyoda (Toyota, 2005). As part of the brands of Toyota, the auto industry, likewise holds the brands of Lexus, Daihatsu as well as Hino. All of these brands have been able to market over 6 million units from January to September of the year 2005. The auto industry has been able to manage and handle over sixty plants all over the world which generates as well as generateed the Lexus and Toyota vehicles along with its component parts.   Strategic Capabilities             The country of Japan is the centre of the operations of the auto industry.  For instance, in Japan, there are a total of twelve plants within the Toyota City as well as the other parts of the Aichi Prefecture. Likewise, there are also manufacturing firms in Kyushu, Hokkaido, and Tohoku. On the other hand, the auto industry has over fifty manufacturing firms overseas. Outside Japan, manufacturing plants are located in twenty-six countries and regions. The auto industry uses their kind of quality and standard automotive frameworks. In terms of the capabilities of their designers, Taiichi Ono (1978), Toyota’s production system (TPS) was generateed so as to go up against the fixed mass production arrangement of Western car manufacturers and makers, whilst satisfying the local demand outline necessitating an expanded small-lot creation. The organisation started work on this system just about 1950 and had generally finished it by the mid part of the 60s. It was, nonetheless, merely in the advent of the first oil crisis of 1973-74 that the adaptability of the system was noticeably improved and started to be a focus for attention from other organisations (Ono, 1978). Throughout the high-growth 1960s Japanese car factories grew to be extremely automated, but individual production lines needed moderately static amount of staffs despite of the actual production levels. Toyota was not an exemption in this reality. As it encountered a diminishing market, the auto industry tried to invent production lines which could operate with a bigger or lesser labor force in keeping with the actual workload, preserving sensibly high efficiency even at a condensed rate of production.             Part of the strategic capabilities of Toyota includes the strategic capabilities of the supply chain.  The pattern and organisation of a supply chain is perceptibly a comprehensive topic, concerning inter-dependencies between research and development, marketing and production roles, creating considerable courses of goods and technical, market and financial information. The geographical arrangement of a supply chain relies on location-precise and relational components (Levy, 1995) Location-precise components, like wages and resource accessibility; generate the most favourable location for every action in the chain when accounted separately from the rest of the chain. Relational elements manipulate the cost of incorporating actions in the chain and rely on the connection involving one action and the rest of the chain. The determinant about the first four stated features rely openly on the staffs’ intellectual capabilities by this means causative to the rehumanisation of assembly work by means of instruction for several duties (multi-skilling) and setting off their “thinking” capability not only as assembly personnel but at the same time both as on-line quality examiners and upgrading planners. The flexible production frameworks thus no longer cares for the staffs purely as “brawn workers” who merely acquire instructions under the Fordist-cum-Taylorist frameworks. In its place, it utilises them as “brain workers” who are able to understand operational dilemmas on their own, proposing methods of resolving them, and enhancing their own work practices. In terms of strategic capabilities approach, more executive power is thus handed over to the staffs. Shimada (1988) depicted the new frameworks as a shop-floor operation of “humanware”; Aoki (1990) understood it as a dynamic employment of “the information-procedureing ability” of staffs; and Koike and Inoki (1990) envisioned it as “white-collarisation” (i.e., professionalisation) of blue collar personnel. In a word, flexible production is therefore an anthropocentric (more willingly than technocentric) method of sorting out and managing manufacturing movement. It reinstates, supports, and uses the intellectual capability of staffs. At the same time, the auto industry also works to enhance the organisation and efficiency of its staffs through the generatement of the Global Production Centre within the Motomachi plant, Toyota City. The centre presently trains 2,400 staffs over a three-year period on an original curriculum. (Annual report, 2005) According to Cho, the centre aspires to develop “tough, multi-skilled global human resources”. (Cho, 2004) Furthermore, the centre provides staffs with a wide-range of knowledge and capabilities that will allow them to transfer professional know-how to managers and subordinates at local production sites as well as attain self-reliance and competitiveness. This procedure is integrated within the Toyota production system. Each strategic capabilities approach is used to ensure that the auto industry will be able to maintain high quality and satisfying products for its target market.   Reference Aoki, Masahiko. (1990) “A New Paradigm of Work Organisation and Coordination. Lessons From Japanese Experience.” In The Golden Age of Capitalism: Reinterpreting the Postwar Experience, edited by Stephen Marglin and Juliet Schor, 267-293. Oxford: Clarendon Press.   Cho, F 2004, ‘Toyota Motor Corporation: Information meeting in New York’, Toyota, Available at [www.irwebcasting.com]. Accessed on [28/06/06]. Koike, K., and Inoki, T. (1990). Skill Formation in Japan and Southeast Asia. Tokyo: University of Tokyo Press Levy, D. (1995) International Sourcing and Supply Chain Stability. Journal of International Business Studies. 26(2) Ono, Taiichi. (1978) Toyota Seisan Hoshiki (The Toyota production system). Tokyo, Daiyamondo. Shimada, Haruo. (1988) Humanware no Keisaigaku (Economics of Humanware). Tokyo: Nihon Keisai Shimbunsha. Toyota (2005), Toyota in the World Databook. Available at [www.toyota.co.jp/en/pdf/toyota_world/2005/chap5.pdf]. Accessed on [28/06/06].         Credit:ivythesis.typepad.com

TOYOTA STRATEGIC CAPABILITIES

TOYOTA STRATEGIC CAPABILITIES Background of the Auto industry The auto industry under consideration is Toyota Motor Corporat...

Toyota Essay

Toyota Essay   Introduction As companies grow and make its way into the global business environment, profound challenges and opportunities are encountered. Such endeavor necessitates companies to focus on developing strategies to respond to the growing threats posed by the internal and external environment and to explore the opportunities that the contemporary business environment provides. Strategies are central to the achievement of sustainable development. These are the driving force of practically every organisation that are motivated to grow fast ahead of the competitors, grow in line with the industry or to simply catch-up and defend an existing status, all of which are evident in the case of Toyota and specifically highlighted by the lean production system.     Background The automotive industry, for instance, has been the only industry with high industrial output worldwide, with a broad scope of interconnection and with a long production chain (Yu 1999, p. 152). An assembly industry in essence, the automobile industry is comprised of a variety of components many of which are manufactured by independent firms in other industries. Prior to becoming a volume business thereby the automotive industry embraces a producer-driven production chain, a strategy that emerged in the 1950s (Nairn and Nairn 2001, p. 382; Dicken 2003, p. 371). Integrating a production chain in the automobile industry is crucial since there are needs to maximise return on investment and to leverage the quality of the products in cost-efficient manner.   Governed by the philosophies of ‘just-in-time’ production and ‘jidoka’ (visualisation of problems), Toyota developed own production systems. Toyota production system (TPS) purports on producing vehicles of sound quality, one at a time and will fully satisfy customer requirements. The company believes that quality must be built-in during the manufacturing process and produce only what is needed, when it is needed and in the amount needed. For the company to achieve such purpose, all of the parts are subjected to inspection in order to meet predetermined quality standards and wherever defective parts and equipment malfunction was discovered, the production process automatically stops and the problem will be corrected before proceeding. As such, within the company, complete elimination of waste, inconsistencies and unreasonable requirements on the production line are priorities (Morgan and Liker, 2006).     A process called lean manufacturing (or lean production), it refers to the optimal way of goods production by means of eliminating waste and implementing flow. Originally designed for Toyota Production System (TPS), lean manufacturing removes ‘seven wastes’ and other potential waste for organization. These are: defects – prevent customers from accepting the products produced, overproduction – production and acquisition of items prior the actual requirement, transportation – the risks of being damaged, lost or delayed, waiting – the time spent by the workers and customers in terms of delivery, inventory – in the form of raw materials, work-in-progress (WIP) or finished goods, motion – the producer, worker, or equipment, and overprocessing – using more expensive yet valuable resources. Others are skills, safety, information, material and breakdown (Morgan and Liker, 2006).   Along the TPS are several, distinct activities and functions that contributes to the competitive edge that Toyota now enjoys. Through jidoka and just-in-time production, the company achieves flexibility and demand management as well. On the other end of the spectrum, the challenge for the automotive industry, however, is that impose by globalisation. The onset of globalization has prompted businesses and its leaders to think and act globally to be able to gain competitive advantage. The primary issue is that of standardisation where products are being standardised in a sense that they all become ‘one’ versus divergence where products are diversified.     Analysis As such, the lean production system prompted Toyota, being the master of cost reduction strategies, to outsource and keep up with international completion which is also perceived as a response to the challenge of globalisation. Toyota is using a functional outsourcing model wherein certain services are trusted toward partners or providers. This advents Toyota of superior leveraging of market as well as maintaining control over production processes (Morgan and Liker, 2006). Nonetheless, although reducing costs is the primary goal, quality must not be sacrificed.   Improving quality management is another response strategy for Toyota. Toyota well understands the need to eliminate poor management practices through outsourcing functional areas into suppliers (Morgan and Liker, 2006). A relative degree of pressure and risk will be alleviated and dispersed, resulting to sufficient control to core business. In this way, the company would be also able to focus on core functions also. Strategy-related issues will be also prioritised while also avoiding heavy investments.   In lieu with this, Toyota perceived its supply chain to be a key contributor to the products and services and the processes. Important to business processes is the supply chain management (SCM) as an important tool of securing a large market share. As the basis of providing superior service, through effective management of the supply chain the organisation should obtain cost leadership, differentiation and focus on specific niche in terms of procurement, distribution strategies and delivery strategies (Morgan and Liker, 2006).   Conclusion In sum, the motivation of Toyota is always inclined at lowering costs while strengthening the competitive advantage through quality enhancement.     References   Dicken, P 2003, Global Shift: Reshaping the Global Economic Map in the 21st Century, Sage Publication, Inc. Morgan, J M & Liker, J K 2006, The Toyota product development system: integrating people, process, and technology, Productivity Press. Nairn, S and Nairn, A G 2001, Engines that Move Markets: Technology Investing from Railroads to the Internet and Beyond, John Wiley and Sons. Toyota Production System, Toyota website, retrieved on 7 June 2010, from [http://www.toyota.co.jp/en/vision/production_system/]. Yu, Q Y 1999, The Implementation of China’s Science and Technology Policy, Greenwood Publishing Group.     Credit:ivythesis.typepad.com

Toyota Essay

Toyota Essay Introduction As companies grow and make its way into the global business environment, profound challenges and opport...

Lean Production

Lean Production Firms engaged in lean manufacturing strategy are showing expressive development with regards to cost strategies. Lean production or the known lean manufacturing is based on the Toyota Production System which, when properly implemented, can dramatically improve productivity and lessen business costs by as much as 95 percent when compared with traditional production systems according to Pzydeck, (1999). It was developed by Taiichi Ohno, Toyota’s production executive, in order to provide solution to Japan’s s system of high-variety production and meet the demands of the customers. Lean was designed specifically as an application to the mass-production system of Toyota because the company can not manufacture identical products in bulk. Lean manufacturing aims to minimize waste called muda so as to increase the value of the products and the production process. The wastes or muda include all the produced good that fall short behind the company’s quality standards as influenced and dictated by the elements of time, process, and raw materials (Pzydeck, 1999).   Among the solutions provided by the lean manufacturing system include (1) cost reduction in the production and manufacturing system of companies, (2) creative and innovative initiatives on the part of the employees in order to contribute to the success of the company, (3) control systems in the execution of the production plans and projects, (4) performance quality in terms of clear instructions, specifically defined objectives, as well as communicated and centered goals, (5) decrease in training expenditures, (6) implementation of alternative operations management framework, and (7) continuous and sustained development of the business organization (Lean Software Quality Management, 2009). Basically, the lean machine is likewise known in the ease of its use and installation as well as its cost effectiveness in dealing with wastes in most quality systems thereby saving time and money for the software. It can integrate information, reports, graphs, and other tools that work together to simplify and deliver information for improved business operations which minimize the time spent on other software programs (The Lean Machine 2011). Since production systems are dependent primarily on existing economies of scale, expensive costs incurred by the company in the production process are distributed evenly throughout the production stages because costly production are highly sensitive to depreciations in the market (Sullivan, 2002). With the trends and pressures towards globalization among the members of the manufacturing industry, companies like Toyota are seeking means and ways to eradicate useless outputs in production that decrease the value and quality of the products and services offered to the customers. Manufacturing companies are constantly finding ways of reducing expenditures, in order to effectively compete with other companies and to eventually make profit.  The use of lean manufacturing in the production systems of manufacturing companies have been gaining popularity and reputation for the advantages and benefits it offers in the industry (Phelps, 2004 and Black, 1995). These include: 1.        The various manufacturing techniques and concepts that have been incorporated to lean manufacturing system, 2.       Applicability of the lean manufacturing system to different types and sizes of production companies,   3.       Superior-quality product outputs that are produced within schedule and offered at the lowest possible cost, and 4.       Flexible and efficient production standards resulting to increased product variation.   According to Black (1995) manufacturing companies like in Toyota are frequently faced with constraints in the production line in terms of existing manufacturing machines. Normally, companies are equipped with machines that are huge in order to meet the demands of the customers. Problems incorporated to production machines such as costly set-up expenditures and lack of versatility was provided solution through the lean manufacturing approach. In lean manufacturing, the use of flexible or versatile production machines is encouraged in order to increase their functionality to different manufacturing designs and objectives.  Lean machines are most of the time characterized with not very huge mechanical infrastructures within the plant or operation house and are normally used for different types of product manufacturing thereby reducing the length of the cycle time. The reduction of cycle time aims to immediately deliver the customized products to the customers within a shorter period of time at high standards (Black, 1995). Ndahi (2006) indicated that the utilization of lean manufacturing versatile machines and its integration with computerized manufacturing processes enabled flexible design, process planning, machining, quality control, inspection, and inventory among manufacturing companies. It has likewise introduced better financial controls and operations management techniques in its emphasis on waste eradication in the production processes. The lean manufacturing concept highlights the importance of avoiding overproduction as well as inclusion of unnecessary materials to the ordered products along with problem in idle time, logistics, inventory, warehousing, performance of the labor force, and production products that are below quality standards. The production concept of lean manufacturing involves assessment and evaluation of the entire production operation of companies in order to recommend means of improving the existing production systems. The system’s drive toward effective reduction of waste is likewise highly acclaimed for its environmental contributions thereby supporting sustainable developments. Meanwhile, according to Tinham (2004) lean manufacturing contribute to cost reduction efforts of companies in terms of supply chain and logistics concerns. The extreme competition in the global market environment necessitates the creation of production systems that will enhance the manufacturing as well as marketing capacities of companies. Through lean production approaches, manufacturing companies are provided with smooth supply chain and logistics process through the support and integration of information technologies, open communication with partner companies, and feasible production plans and targets. Mottershed (2001) likewise incorporated lean manufacturing approaches to the concept of “pull system” in which the rate of customer demand dictates the time completion of each production project.  Lean likewise contribute to the competitive concerns of the companies that use it since it provides solution to issues on cost and product quality which serve as the primary avenues of aggressive competition in the global market environment. Continuous competition in the market requires lean manufacturers to pursue innovative efforts of contributing to quality management approaches and practices (Chin, 2003). From the discussions, it shows that lean manufacturing systems highlights improvements in existing cost and quality control systems of manufacturing companies since it enables a shift in quality control perspectives from inspection-oriented approach to defect-prevention practices which makes possible inspection at every stage of the production system. Through the lean manufacturing approach, companies are capable of inspecting the step by step procedures of production which includes evaluation during material purchase, delivery, inventory, and supply processing as compared to the traditional and conventional inspection practices that are undertaken at the beginning, during, and at the end of the production process. However, despite the promised production improvement and competitiveness to manufacturing companies, the lean manufacturing approaches are still merely evaluated by companies due to independent apprehensions with regards to its production principles. As a result, manufacturing companies are utilizing the lean concept as measures of performance in their production processes instead of full integration in their operations. The application of lean manufacturing approaches to the company’s production system involves its objective towards zero inventory at all levels and stages of the manufacturing process. But such objective towards zero inventories may be impossible for large production houses in which inventory and warehousing contribute to the smooth production procedures and the eventual reduction of lead times and in increasing profitability. While customer satisfaction defines existing indictors of competition in the global market, the overhead cost that could result from such initiative will be added to price of the finished products which could be detrimental to targeted sales.   References: Black, J.T. (1995). The impact of lean production on manufacturing engineering. Proceedings of the First World Congress on Intelligent Manufacturing Processes and Systems. San Juan, Puerto Rico, pp1280-90 vol. 2.   Chin, K.S. (2003). Quality management practices in Hong Kong industries: A comparison between electronics and toy manufacturing industries. International Journal of Quality Reliability Management, 20(9), 1051-1053.   Lean Software Quality Management (2009). Available at: www.quality-control-plan.com (Accessed: January 4, 2011).   The Lean Machine. (2011). Highlights of the Lean Machine. Available at: www.theleanmachine.com (Accessed: January 4, 2011).   Ndahi, H.B. (2006). Lean Manufacturing in a Global and Competitive Market: The Goal Was to Create a Manufacturing Environment That Is Driven by Demand, and That Holds Only a Small Amount of Inventory and Products at Any Given Time. The Technology Teacher. 66(3), 14+.   Phelps, T. (2004). Building a lean supply chain. Manufacturing Engineering, 132(4), 107-114.   Pyzdek, T. (1999). Six Sigma and Beyond. Six Sigma and Lean Production: Which process improvement approach is right for you and your needs? Available at www.isixsigma.com (Accessed: January 4, 2011)   Sullivan, W.G. (2002). Equipment replacement decision and lean manufacturing. Robotics and Computer-Integrated Manufacturing, 18(3-4), 255-256.   Tinham, B. (2004). Big-picture lean thinking is not always that easy. Manufacturing Computer Solutions, 10(11), 24-25. Credit:ivythesis.typepad.com

Lean Production

Lean Production Firms engaged in lean manufacturing strategy are showing expressive development with regards to cost strategies. Lean ...

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