h toyota report

8/6/2019 h Toyota Report

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Contents

1 Introduction ......................................................................................................................................2

1.1 Report back ground ................................................................................................................... 21.2 Purpose ......................................................................................................................................21.3 Scope .........................................................................................................................................21.4 Research method .......................................................................................................................2

2 Results and Discussion .................................................................................................................... 32.1 Company History & Overview ................................................................................................. 32.2 Innovation in Production Processes ..........................................................................................4

2.2.1 TPS (Toyota Production System) ...................................................................................... 42.3 Innovation in Work practice ..................................................................................................... 6

2.3.1 Team Work ........................................................................................................................62.3.2 Ideas & Their Implementations ......................................................................................... 7

2.3.3 Reduced Cost ..................................................................................................................... 73 Conclusion .......................................................................................................................................84 Recommendation .............................................................................................................................8Appendices .........................................................................................................................................9Bibliography .................................................................................................................................... 10

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1 Introduction

1.1 Report back ground

This report was prepared for the foundation subject Innovation and Change at Swinburne

College.

1.2 Purpose

The purpose of this report is to explore the concept of innovation and change within a

theoretical framework and discuss its application in a business setting. Hence, to make

recommendations inclusive of theories, definitions and explanations were relevant.

1.3 Scope

The scope of this report is limited to analyzing the History and future of Toyota, the

production processes involved and some of the work practices improved productivity and

product quality. Also it will look at some of the main marketing strategies.

1.4 Research method

This report was conducted using secondary research. Most of the Information obtained was

from the online Toyota website.

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2 Results and Discussion

2.1 Company History & Overview

Toyota as we know today originated in Japan in 1890 when founder, Sakichi Toyoda

invented the wooden Toyoda handloom. At that time, Toyota was known as Toyoda but was

later changed to Toyota because many people found it easier to pronounce the name. Sakichi

continued to improve the handloom by using all sorts of available technologies until he

finally discovered the automotive loom. His discovery led him to believe that by using

gasoline, engines can be powered. He was unable to go any further in his research however;

he became a mentor to his son, Kiichirio who later carried on from where his father had left

off. Kiichirioi became more passionate about the automatic loom and so he began to use the

information obtained by his father and was able to produce in 1935, the first car for Toyota

Company called A1 according to its model.

Today, Toyota is the largest car manufacturer in Japan, and the third automobiles producer in

the whole world. It produces one car every 6 seconds and about 5.5 million cars per year.

Toyota Group manufactures automobiles in 26 countries and regions throughout the world

and its vehicles are sold in more than 140 countries. Toyota has a total asset of US$243.5

billion with more than 260,000 employees worldwide. Global sales of its Toyota and Lexus

brands, combined with those of Daihatsu and Hino, totalled up to 7.52 million dollar (retail

basis) in the 2004 calendar year. Toyota also leads the automobile industry in environmental

technologies with the success of the hybrid technology in the Prius.

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2.2 Innovation in Production Processes

There are two types of production process; TPS (Toyota Production System) and the LeanProduction.

2.2.1 TPS (Toyota Production System)

Toyota developed the TPS after World War II. At that time, two main competitors of

Toyota were Ford and General Motors (GM). These two competitors used mass production

and economies of scale. Toyota faced very difficult business conditions. For example,

Toyotas market was very small hence it had to produce a variety of vehicles on the same

assembly line to satisfy customer demands and more important remain competitive.

Toyotas production system was innovated by making its operations more flexible. This

resulted in the birth of TPS. Toyota production system contains two main concerns: Just in

time and lean manufactory (See appendix A). It emphasizes the identification of waste

followed by specific tools and techniques to eliminate it. Toyota focused on eliminating

wasted time and material from every step of the production process (from raw materials to

finished goods). The goal of the TPS is the highest quality, lowest cost, and shortest lead

time.

2.2.1.1 (JIT) Just in Time

TPS borrowed some of its ideas from the United States. The core idea of the Just in Time

(JIT) system came from the concept of the pull-system. This was inspired by the

American supermarkets. In the pull system, individual items are replenished as each item

begins to run low on the shelf. When applied to Toyota, it means that the first step in the

process is not completed until the second step uses the materials or supplies from Step 1.

At Toyota, every step of the manufacturing process signal to the previous step when its

part needs to be replenished. Thus, making only "what is needed, when it is needed, and

in the amount needed. It is required that when a vehicle order is received, a production

instruction must be made available at the beginning of the vehicle production line at the

earliest possible time. Thus, the assembly line must be stocked with small numbers of all

types of parts so that any kind of vehicle ordered can be assembled upon request.

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2.2.1.2 Lean Production

Toyota invented Lean Production System in the 1940s and 50s. Lean Manufacturing is a

unified, comprehensive set of philosophies, rules, guidelines, tools, and techniques for

improving and optimizing discrete processes. Toyota was able to improve quality product

output by using the Lean manufactory System, while greatly reducing both lead-time and

cost. This enabled Toyota to become one of the ten largest profitable companies in the

world. Currently it is considered more profitable than when all other car company profits

are combined together.

In Toyota, if a defective part or equipment malfunction is discovered, the machineconcerned automatically stops, and corrections are made. Normally, the production

machine automatically stops when processing is completed or when a problem arises.

This is communicated via the andon (problem display board). Hence, it means that any

problems arising will be identified and will be dealt with so that they do not occur again

in future. Therefore, the production line is continuously being improved and perfected.

(See Appendix A)

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2.3 Innovation in Work practice

During the early stages of its development, Toyota experienced a number of unsuccessful

years. Like any other company, Toyota often tries to make ends meet in terms of achieving

better revenue outcome from its production sales and from other income generating sources.

Upon realizing the need for it to be competitive in the ever changing business world, it

began to embark itself on a task to fully but slowly innovative some of the key elements in

its workplace environment. One of the key elements that were innovative to Toyota was the

way in which it organized its staffs to carry out its work. This refers to good work practices.

Good work practices were not implemented in Toyota until 1950. Since its establishment in

1937, it took about 13 years for Toyota to become an innovative motor vehicle company.

2.3.1 Team Work

According to findings, it was investigated that one of the reasons prior to the actual

implementation of good work practices was when its staffs began to go on strike against

lay-off. With an average financial stability and the depression after World War II, Toyota

was forced to consider laying off some of its staffs as it was about to go bankrupt. After

that experience, Toyota began focusing more on its employees working as a team and

taking care of people properly. According to Toyota, no one person can produce

everything by himself/herself. Many people have to work as a team to make a single

product. But if people are segregated as executives, managers, engineers, operatorsthen

there can be no good manufacturing.

Numerous strikes continued to occur in Japan until mid 1970. However, today strikes are

rare in that country. It was discovered that Toyota had development a much stronger

relationship with its employees in order to make teamwork more successful. In fact,theres always internal competition everywhere else within an organization since there are

teams, team leaders and a supervisor. Despite that, as a team, they have to show

improvement. According to research, the team or team member, who does not perform, is

removed.

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2.3.2 Ideas & Their Implementations

According to findings, it was investigated that Toyota continuously improved its

productions, services and work practices by means of generating ideas and implementing

them. Right from the top management to the shop floor worker, employees are encouragedto write down their ideas on paper. According to research, Toyota Motor Corporation

places the highest value on actual implementation and taking action (Cho, 2002). President

Furthermore, in order to encourage staffs to continue to participate, Toyota adequately

rewards staffs that come up with good ideas. Besides, good ideas dont remain on paper.

Theyre implemented. Toyota has continued this practice for more than 45 years. Toyotas

culture is about pausing pausing to plan improvement and make progress. Today, there

are about 2500 ideas each day and about 1 million creative ideas which make Toyota one

of the most innovative companies in the world.

2.3.3 Reduced Cost

According to investigations, it has become a culture over the years for Toyota to reduce its

cost in every aspects of its business. For example, one of the ways Toyota innovated it

production was by finding low-cost but reliable alternatives to expensive new technology.

In other words, instead of using highly expensive technologies, Toyota began using

reliable technologies that produce the same quality outcome as a new technology would

do. Moreover, investigations reveal that Toyota has a higher profitability than the total

profitability of companies like General Motors, Fords and Chrysler. This is because it has

taken the same approach which saw a continuous improvement in its production. For

instance, to improve it profitability, Toyota began to manufacture Hybrid vehicles which

are environmentally friendly. This means they were designed and manufactured to reduce

the amount of carbon dioxide emission into the atmosphere. A study now shows that

because of this approach, the level of CO2 has dropped over the years. With regard to therapid sales of hybrid vehicles sold at a reduced but affordable price, high profitability was

achieved in Toyota. Since then, Toyota has continued to be the best automatic company in

the world.

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3 Conclusion

From careful analytical research conducted, it was learnt that Toyota became innovative in

every aspect. For example with regard to the Production process, Toyota has become

innovative by way of introducing the TPS (Toyota Production process) which is based

entirely on two types of systems known as the Just- in- time (JIT) and the lean

manufacturing. The underlining goal of TPS is to produce the highest quality, at a lowest cost

with a shortest lead time. Hence it has contributed to how Toyota became innovative.

In addition, JIT system was derived from the concept of pull system. Thus making only

"what is needed, when it is needed, and in the amount needed. Lean manufacturing optimize

discrete processes by way of rectifying any problems such that they dont reoccur in the

future during production.

Furthermore, Toyota continuously improved its productions, services and work practices by

means of generating ideas and implementing them. Undertaking a major cost reduction effort

was another thing that Toyota did in order to become less vulnerable from other low cost

manufacturing competitors. Thus cost reduction was demonstrated in the reliable and less

expensive technology that Toyota used. Hence, this result in an increase in both product sales

and profit. Team work also was innovated as Toyota realized that in manufacturing; no one

person is able to produce everything by himself /herself. Everyone has to work as a team to

show improvement.

4 Recommendation

Since dealerships have a reputation of adding on useless service plans, overcharging

customers, it is recommended that Toyota looks into this area and try to innovate it in order

to best fit with peoples living standards. The other thing is that customers dont have the

privilege to customize their vehicle or get exactly what they want. In other word, they do not

have any choice but to choose products that are in stock at a dealer

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Appendices

Appendix A

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Bibliography

History (Toyota)http://www.toyoland.com/history.html. Viewed 10th May, 2007

http://www.toyota.co.jp/en/history/. Viewed 10th May, 2007

Hybrid carshttp://www.toyota.com/prius/index.html?s_van=GM_TN_HYBRID_PRIUS viewed, 15th May2007

Lean manufacturinghttp://www.aacc.edu/lean/toyota.cfm, viewed 15th May, 2007

Principles of Toyotas wayhttp://www.si.umich.edu/ICOS/Liker04.pdf, viewed 15th May, 2007

Toyota Production Systemhttp://www.si.umich.edu/ICOS/Liker02.pdf

Toyota production system, Toyota,http://www.toyota.co.jp/en/vision/production_system/ viewed 19th May, 2007

TPS (Toyota production system), Vorne,http://www.vorne.com/solutions/learning_center/tps.htmviewed 19th May, 2007http://www.toyota.com/about/environment/partnerships/index.html viewed 20th May 2007

Work Practiceshttp://www.gembapantarei.com/2006/05/interview_with_darius_mehri_author_of_notes_from_toyotaland.html

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http://www.toyoland.com/history.html.%20Viewed%2010th%20May,2007http://www.toyota.co.jp/en/history/http://www.toyota.com/prius/index.html?s_van=GM_TN_HYBRID_PRIUShttp://www.aacc.edu/lean/toyota.cfmhttp://www.si.umich.edu/ICOS/Liker04.pdfhttp://www.si.umich.edu/ICOS/Liker02.pdfhttp://www.toyota.co.jp/en/vision/production_system/http://www.vorne.com/solutions/learning_center/tps.htmhttp://www.vorne.com/solutions/learning_center/tps.htmhttp://www.toyota.com/about/environment/partnerships/index.html%20viewed%2020th%20May%202007http://www.gembapantarei.com/2006/05/interview_with_darius_mehri_author_of_notes_from_toyotaland.htmlhttp://www.gembapantarei.com/2006/05/interview_with_darius_mehri_author_of_notes_from_toyotaland.htmlhttp://www.toyoland.com/history.html.%20Viewed%2010th%20May,2007http://www.toyota.co.jp/en/history/http://www.toyota.com/prius/index.html?s_van=GM_TN_HYBRID_PRIUShttp://www.aacc.edu/lean/toyota.cfmhttp://www.si.umich.edu/ICOS/Liker04.pdfhttp://www.si.umich.edu/ICOS/Liker02.pdfhttp://www.toyota.co.jp/en/vision/production_system/http://www.vorne.com/solutions/learning_center/tps.htmhttp://www.toyota.com/about/environment/partnerships/index.html%20viewed%2020th%20May%202007http://www.gembapantarei.com/2006/05/interview_with_darius_mehri_author_of_notes_from_toyotaland.htmlhttp://www.gembapantarei.com/2006/05/interview_with_darius_mehri_author_of_notes_from_toyotaland.html

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