The Business Strategy Of Toyota

1. What is the relationship between Toyota’s organizational strategy and Toyota Production System? TPS is viewed as the benchmark, the

Yet, the public perceptions may be at odds with the objective measures. In Toyota’s case, there have been indications that the quality level of the company’s products had fallen off in a span of few years. There are changes that have taken place during a period when most of the company’s close competitors, such as Fords, were producing more cost-effective and efficient automobiles. In addition, the company’s unique production approach and the emphasis on continuous improvement and learning coupled with a matrix structure are key reasons for the company’s leadership in the cat manufacturing industry. Toyota’s Production Systems (TPS) was founded in the principles of “Just-in-time. This approach has less opportunity for slack resources and focuses of the benefits of efficiency on the part of employees and reduction on waste resources (Griffin and Gregory, 5). Further, Toyota Company enacts its production system with the assistance of its human resources strategies, culture, and organizational structure. Toyota’s Production System emphasizes on learning and modesty when it comes to assessing past success and differentiated them from

Lean manufacturing is one of the core causes of Toyota's competitive advantage. Other business exercises involve the "Jidoka" system; if there are any errors or other operational difficulties, the production process would be closed.

Toyota must keep on producing vehicles that car customers want to buy. They must figure out what these buyers demand in a car. Once they tackle this then they can be successful, but if they don’t produce what they buyers want then they will not reach their goals.

Differentiation – Toyota is the largest auto maker in the world and the key reason for the companies success is as a result of their differentiation strategy this includes introduction of a highly efficient manufacturing model to increase the performance of its vechiles and offer offer their customers with increased value. Another differentiation strategy is the fact that the company was able to produce vehicles for many different market segment and price

Toyota’s manufacturing techniques, the specifics of the Toyota production system have allowed the company to operate at a greater level of efficiency than its competitors. The lastly is about that continuous improvement. Thus, Toyota has been able to sustain a competitive advantage by utilizing a tangible resource that is rare and not easily imitable.

Another reason Toyota gained a significant advantage was also meeting another point of Deming’s 14 points which was 5. Improve constantly and forever the systems of production and services this was evident in Toyotas production system with adopting new production procedures through in-house development with developing the ‘lean manufacturing system’ which focused on more efficient working with focusing on the best quality, lowest cost and shortest lead time (institute, 2000b) this was achieved through eliminating waste. Toyota was able achieve this new line of production management with two concepts just in time management which focused on delivery inputs to Toyotas operation facilities just in time to be used which meant Toyota was successfully able to cut costs with storage or raw materials being waiting to be used (institute, 2000b) which allowed Toyota to meet one of the Lean manufacturing criteria of lowest cost, and jidoka was concept created on automatic looms which stopped the machine when the thread broke which maintained quality within the product this was implemented

Toyota is also the birth of kaizen. Toyota company tries to persistently enhance their standard procedures and strategies keeping in mind the end goal to guarantee most extreme quality, enhance effectiveness and dispose of waste. This is known as kaizen and is connected to each part of the organization's activities. Kaizen is the heart of the Toyota Production System. Like all large scale manufacturing frameworks, the Toyota process requires that all tasks, both human and mechanical, be decisively characterized and institutionalized to guarantee most extreme quality, dispose of waste and enhance effectiveness. Toyota Members have an obligation not just to take after nearly these institutionalized work rules additionally to look for their constant change. The everyday changes that Members and their Team Leaders make to their working practices and gear are known as kaizen. The term likewise has a more extensive meaning: it implies a constant making progress toward change in each circle of the Company's exercises - from the most essential assembling procedure to serving the client and the overall

Since Toyota is the founder of lean operations, and the beginner of operating just in time method for its manufacturing process, Toyota has become successful in turning out to be delivering the high quality, effective products among other automobile brands. Based on lean operations, just in time concepts takes place a major role in performing effectively. JIT simply means that improving the productivity and excellence by using time and resources effectively to produce the required quantity while waste elimination. So Toyota has got the maximum befit of than its competitors and they are known as “the master and pioneer” of just in time.

One of the greatest legacies Toyota has acquired from its parent founder was the production technique- “Just in Time” which is producing quantity which is ordered in a given time and keeping the wastage level minimum, this philosophy has been a competitive advantage for Toyota since its inception and has been adopted by many automobile manufacturers all over the world.

Toyota’s employees develop strengths through their ability in innovative-thinking by creating continuous improvement known as Kaizens. For example, “Kanban” or ”Pull-System” allows prevention of over-production and manages the inventory accordingly with efficiency.

Lean manufacturing originated long before Toyota and Ford, however the thought that it originated with Toyota is flattering since they are the ones who perfected it. By creating the Toyota Production System (TPS), Toyota found a better way to produce large quantities of product efficiently with eliminating the waste factor and while cutting down cost. Taiichi Ohno a former Toyota vice president promoted the idea of JIT (Just-in-Time) which means “producing the necessary units in the necessary quantities at the necessary time.” (Monden) Which leads to Toyota’s ultimate goal in the TPS is to improve productivity for better return in investment. To have continuous flow in a production system Toyota sought out to achieve the concept of JIT and autonomation . Since the TPS is what creates the parts who monitors the JIT system? The kanban system which is an informational system that controls quantities being produce in each process. As the discussion carries on throughout this paper about Toyota and their use of the kanban system the topic

Toyota is a key player in global automotive market. Its structure constitutes if various production plants in different locations and a very strong branding which helps it capture a major market share. Like other enterprises, Toyota has several strengths and weakness which makes it what it is now. Toyota heavily invests in Research and development which helps it come up reputable product line which is spread out throughout the world because of its strengthening global distribution network however its recent product recalling, loose grip in key geographic areas and wrong allocation of resources shows that even a strong brand like Toyota has its weaknesses.

By 2007, Toyota was leading its industry as the largest automotive manufacturer in the world. Operating under a strong growth strategy, their reputation for exceptional quality and high safety ratings coupled with operational efficiency promoted their competitive advantage. Furthermore, Toyota was principally the symbol of excellence and a benchmark for every other company. When examining their strategy under Porter’s model Toyota maintains a strong combined plan focusing on both cost leadership and broad differentiation. Through the process of lean daily management and just-in-time delivery Toyota led the manufacturing world with a distinguished level of efficiency. Examining their success and processes, manufacturing was transformed and Toyota was the envy of many. Additionally, through innovation Toyota actively sought differentiation as a generic tactic. Hybrid technology was successfully implemented into their Prius model vehicles and the Prius became the first, pioneering mass-produced vehicle of its kind.

main strategy for the North American market is to aim for higher sales, while raising the proportion of locally produced automobiles. Toyota Motor Corp have reached a stage where investments made over the last several years to expand production capacity are beginning to show returns and improved profitability can be expected. Toyota’s goal is to bolster local production through additional investment, and contribute to the regional economy by expanding its operations. At present, our production capacity in North America is approximately 1.25 million units (including our joint venture with GM). However, Toyota Motor Corp plan to boost this to 1.45 million units during 2003.