Operations Improvement Plan University of Maryland MBA 6022 February 17, 2012 Instructor: Dr. Ben Thompson Tracy Moore MBA 6022 2237 Gateway Blvd Baltimore, MD 21202 Abstract: Toyota is faced with an Accelerator crisis after allegedly faulty accelerator pedals in some of their vehicles caused the pedals to depress get stuck or cause them to accelerate. This lead to a massive recall and lead to penalties and fines from the US government and consumer confidence diminished. There are several processes that can be identified that will benefit Toyota and lead to improvement which is what will be discussed in this paper. Toyota Motor Corporation was founded by Kiichiro Toyoda. Its headquarters is in Japan and was established in …show more content…
The problem with the suppliers of components for vehicles outside of Toyota’s network has been going on for a couple of years since they implemented a growth strategy. In1995, then new President of Toyota decided to increase global market share for Toyota they began to expand rapidly. This led to increase production which made it impossible for their network of suppliers at the time to keep up. They had to look outside their network in order to keep pace with the demands of their newfound growth. Before that time Toyota had a business structure for their network which is called the Keiretsu. As described by Douthett,Edward B.,,Jr, Jung, K., & Kwak, W. (2004) “In Japan, industrial organizations is characterized by enterprise groupings, keiretsu, composed of firms in different industries, but interrelated through cross holdings of ownership, and reliant on a single, large commercial bank for financing” (p. 80). If Toyota continues on as it is and does not change the issue of looking at how they outsource outside of their network they risk losing market share and customer loyalty. If they improved their process of outsource outside their network there are many improvements that would happen. One of the Pro’s would be they would be confident in the components being supplied for their vehicles. On the other side, if they continue on the current
Toyota Company was established in the year 1937. Its main activities are the production of vehicles and sales. With its headquarters based in Japan, Toyota has employed over three hundred thousand employees. Toyota Company belongs to the motor vehicle industry where competition is tight even though Toyota is leading on the number of vehicles being sold on a daily basis. Toyota operates in 51 countries worldwide.
Once the procurement strategy is agreed upon an appropriate set of supplier selection criteria is to be developed taking into account the Toyota Production System (TPS) and the company’s ethical and social requirements. Importantly, this assists in developing models and frameworks, to evaluate supplier submissions, to match Toyota’s requirements. Subsequently, it will necessary to explore negotiation methods and essential contract inclusions to successfully implement this strategy. It is significant to perform a risk analysis of the sourcing strategy to determine important risk factors to be monitored and mitigated. Importantly,
Toyota faced a challenge related to the poor visibility and low quality of a supplier for the Suprima model. The Japanese brand, being related to a top quality product and a Just in Time manufacturing scheme could not afford to have stock out problems nor not meeting consumers’ demand for quality.
Today, Toyota is the world's third largest manufacturer of automobiles in terms of both unit sales and net sales. It is also the largest Japanese automotive manufacturer, producing more than 5.5 million vehicles per year, equivalent to one every six seconds. See Appendix 1 for a list of its guiding principles. Appendix 2 depicts excerpts from the company’s 2000 annual report showing their main goals for that year. The company has 12 manufacturing plants in Japan and approximately 54 manufacturing companies in 27 countries throughout the world. These plants produce vehicles and components under the Lexus and Toyota brand names and employ about one quarter of a million people worldwide. In total Toyota vehicles are marketed and sold in more than 160 countries and regions with the automotive business, including sales and finance of the vehicles, accounting for more than 90% of the company's total sales. Appendix 3 shows worldwide sales and appendix 4 shows the models produced in North American Toyota plants. North Americanization of Toyota Since the late 1980’s Toyota had made several moves that showed their commitment to what management called the North Americanization of the company. The idea was to increase car sales in the lucrative North American market by also introducing manufacturing plants that produced parts and assembled whole vehicles for
For more than 50 years, Toyota Motor Corporation has been one of the world’s leading manufacturers of motor vehicles in the United States. It was born a Japanese company in 1935 and came to America in 1957. Now headquartered in Toyota City, Japan, it employs more than 300 thousand employees globally (Toyota Motor Corporation Company Profile, 2012). In addition Toyota is a global marketing organization. It strategically operates primarily through Japan, Asia, Europe, and North America; but its vehicles are sold in more than 170 countries and regions across the globe (Toyota Motor Corporation Company Profile, 2012). The Toyota brand is traditionally defined by brand attributes such as global leadership, innovation,
Toyota Motor Corporation is one of the Japanese automotive manufacturer that headquartered in Toyota, Aichi, Japan. The history of Toyota began in 1933 with the company being a division of Toyoda Automatic Loom Works devoted to the production of automobile under the direction of Kiichiro Toyoda, the founder’s son. Toyota Motor Corporation have use code of conduct, corporate social responsibility and sustainability policies for their firm daily operations.
This helped the company to have a competitive advantage for the suppliers opportunity cost. Suppliers were paid incentives for improving the process. Continuous contact with the suppliers helped the company to have control for quality and also the computer aided layouts were dispersed. If the supplier used ideas to reduce cost then profit was being shared with them. This encouraged the suppliers to bring more innovation the process and thus Toyota had a competitive advantage over its suppliers if compared to its
Toyota is one of the leading vehicle manufactures in the world and has faced some challenges throughout the years. This paper will discuss a key issue that Toyota has faced and how they can utilize communication software to improve the business relationship between supplier and Toyota.
Kiichiro Toyoda was the founder of Toyota Motor Corporation and the automotive-centered Toyota Group. Kiichiro was a keen, skillful inventor and the continuous resolve of invention helped him to create the business base acquired from his father, Sakichi Toyoda. With the incessant drive towards innovation and invention, Kiichiro extended into the automotive business and build the groundwork of Toyota Group that you see today.
One factor that adds to the success of Toyota’s supply chain is their relationship with their suppliers and how they do business with those suppliers. Toyota does not simply give their supply contracts to the highest bidder; instead they work incredibly closely with their suppliers so that they can get the highest quality products possible. Toyota uses long-term, just-in-time contracts with all of their suppliers (Winfield & Hay, 1997). Toyota does not engage in any kind of mutual contracts, such as buy-back or revenue-sharing; however, they do take multiple steps to ensure a mutual benefit when they pair up with a supplier. Toyota invests in their suppliers to help them develop products (Liker & Choi, 2004). They also ensure that they share information with their suppliers in a structured fashion. They believe that targeted information leads to results and they ensure that specific communication is relayed to their suppliers at set times and in set ways (Liker & Choi, 2004). Perhaps the most unique aspect of Toyota’s relationships with their suppliers is that they embark on joint improvement ventures together. They set up study groups with suppliers to help both parties learn how to improve operations and send executives and engineers to the supply plants to help them improve processes (Liker & Choi, 2004). These kinds of benefits are described in the contracts Toyota keeps with their suppliers (Toyota Supplier, 2011). The close relationships that
In March of 2011, northeastern Japan was struck by one of the largest earthquakes ever recorded. The magnitude 9 quake (Oskin, 2015) triggered a devastating tsunami, killing thousands, damaging the country’s infrastructure and paralyzing all private, public, and government entities. One of the businesses disrupted by the disaster was Nissan Motor Company LTD, a multinational auto manufacturer producing automobiles under the brand names of Nissan, Infiniti, and Datsun. This paper will discuss how Nissan’s quick-thinking Operations Management (OM) team responded to the crisis with rapid efficiency, helping it to capture a competitive advantage over other Japanese auto makers and succeed in its recovery from this monumental natural disaster.
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.
Toyota is committed in developing its supplier base, which more closely reflects the diversity of its customers and the diversity of its team members who build Toyota vehicles. Having a diverse supplier base enables it to contribute to the economic well being of all its segments. Also, it recognize that partnering with suppliers who provide a diversity of ideas in addition to delivering manufacturing support, goods and services that creates a significant competitive advantage for Toyota.
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.
Toyota Motor Corporation is a Japanese automotive manufacturer. Toyota has over 333 thousand of employees across the world and it is the 14th largest company in the world by revenue in 2014. It is the strategic management of logistic and supply that contributes partly of its success today.