Toyota Motor Corporation is a multinational automotive company based in Japan. Toyota is the second largest automobile manufacturer since it has incorporated nearly six hundred subsidiary companies mainly involved in the production of industrial and commercial vehicles, automobile parts and automobiles (Fujimoto, 2018, pg. 201). Toyota has remained successful over the years particularly due to its unique operations management system.
Besides, Toyota’s decentralized structure has been instrumental in ensuring efficiency since teamwork and employee participation are highly encouraged in the company. Toyota focusses on high productivity; therefore, quality is a crucial issue. In addition, the company’s lean manufacturing philosophy assists the company to minimize waste as well as reduce the cost of manufacturing.
Toyota’s business activities.
Toyota Motor Corporation is engaged in various business activities since it has diversified and invested broadly. However, the automotive business is still primary to Toyota since it makes up the main revenue for the company. To begin with the business activities, we have the development of electric technology. Toyota is among the world’s leaders in pioneering the development of hybrid electric vehicles. Besides, Toyota was the first automotive company to introduce hybrid electric vehicles such as Toyota Prius in the year 1997 (Toma, and Naruo, 2017, pg. 572).
The hybrid models have sold out globally, and as at January 2017, the hybrid car sales crossed the ten million line. Toyota has also been at the forefront of creating all-electric vehicles, and in May 2010, the company collaborated with Tesla in coming up with about thirty-five fully electric RAV4s as an evaluation program. Toyota project known as Harmonious Mobility Network is also another activity in which the company is testing different electric vehicles concepts so as to ensure it competes well in the market.
Secondly, we have the manufacturing of cars and buses. Toyota manufacturers over seventy car models due to its massive manufacturing capability. In addition, Toyota also focusses on luxury car models under the Lexus brand including crown, century and crown majesta. In the history of car sales in Toyota, the Corolla brand has remained the fastest selling car for decades. For example, about every thirty-seven seconds, a Corolla is sold. Toyota produces nearly nine to ten million vehicles every year, and the company is believed to be the most profitable carmaker globally.
Toyota also designs buses such as Hino, but due to competition from other automotive companies, the buses are not as profitable as compared to other car models. Thirdly, we have the development of pleasure sailing boats. In a previous partnership with Yamaha Marine in the year 1997, Toyota came up with the Toyota Marine. Since then, Toyota has been building private motorboats primarily sold in Japan. As at now, Toyota sells luxury crafts under the Toyota Ponam series.
Lastly, Toyota also has incorporated a financial services segment which mainly provides financing to dealers and customers particularly for the lease or purchase of Toyota vehicles (Reuters Editorial, 2018). Toyota runs the financing segment through various subsidiaries. To begin with, we have the Toyota Financial Services Corporation in which it oversees the management of other Toyota financing companies globally. Secondly, we have Toyota Motor Credit Corporation which provides financial services including retail leasing, retail financing, insurance, and wholesale financing. Toyota vehicle dealers primarily benefit from wholesale financing since they are able to finance the inventory of Toyota vehicles as well as other used Toyota vehicles (Reuters Editorial, 2018).
Toyotas Manufacturing process.
Toyota Motor Corporation has implemented a globally renowned vehicle production system referred to as the just-in-time system or lean manufacturing system. This production control system has undergone continuous improvements with the objective of manufacturing cars quickly and efficiently as ordered by customers (Chiarini, Baccarani, and Mascherpa, 2018, pg. 31). Besides, the Toyota production system includes specific objectives. One, cost-effectively offering the best quality vehicles. Two, provision of job satisfaction and fair treatment to all Toyota members. Lastly, flexibility in regards to market changes as well as cost reduction activities to ensure long-term prosperity.
Toyota Production System basis its production on different philosophies including Jidoka and Just-in-time. These philosophies ensure the TPS can effectively and quickly produce vehicles that satisfy customer requirements. Beginning with the Jidoka concept, more focus is on quality (Toyota Motor Corporation Global Website, 2018). In Japanese, Jidoka means automation and therefore in this process, in case a defective part is discovered or an equipment malfunctions, the machine affected automatically ceases to operate until the problem is corrected.
Jidoka is crucial in just-in-time production since it ensures quality standards are adhered to and all parts supplied meet predetermined quality standards. Besides, the Jidoka concept makes it possible for technical problems to be easily detected hence being resolved quickly. The concept also brings in the idea of human touch in automation since team members are well able to scrutinize any abnormality in manufacturing as well as propose an improvement in the production system by seeking cooperation and guidance from the management.
Since Jidoka is primarily focused on automation, machines are also able to detect problems on their own through the problem display board also known as the “andon” hence preventing defective products from being manufactured (Toyota Motor Corporation Global Website, 2018). Toyota is heavily dependent on this production concept due to the high number of vehicles produced in their facilities. This ensures quality is a constant measure hence maintaining customer satisfaction.
Secondly, we have the just-in-time production philosophy. This concept focuses on making only what is needed which translates to the production of quality products through the elimination of waste, unreasonable and unrequired requirements on the production line, and lastly inconsistencies (Toyota Motor Corporation Global Website, 2018). In Toyota, the idea of Just-in-time inventory management has undergone continuous improvement hence ensuring productivity and efficiency. The principle of just in time is dependent on the idea that manufacturing processes are regulated by laws of demand and supply. This means that production of any vehicle is dependent on the demand by customers.
Toyota follows a particular process in order to ensure the just in time concept is effective. To begin with, immediately a vehicle order is received, a production instruction is given which prompts the beginning of the vehicle production line (Toyota Motor Corporation Global Website, 2018). Secondly, the assembly line is stoked up with the required parts needed for the assembly of the ordered vehicle. Thirdly, the assembly line is replaced with the same parts used in assembling a particular vehicle hence reducing the time taken to gather the parts. Lastly, the next process must be stocked with the exact parts needed since only the parts needed are produced.
What can be done to improve the processes?
Toyota Production System can be improved by considering various aspects. To begin with, Toyota can adopt quality control activities whereby everyone participates including seasonal workers, permanent employees, and parties involved so as to ensure all customer inconveniences are prevented. Since Toyota is focused on the slogans “customer first” and “zero defects”, the company should also continually pursue quality under strong leaders.
This will ensure the production process is flawless and all employees participate in ensuring manufacturing follows specifications. In addition, Toyota can embrace rigorous training for its staff so as to cultivate quality professionalism globally. For example, Toyota recalled eight million vehicles majorly due to problems associated with accelerator pedals, jam pedals and floor mats (Nakata, 2018). Training will ensure the just-in-time production concept is also flawless hence reducing losses that arise due to lawsuits filed by customers due to their dissatisfaction of the vehicles.
Secondly, since the Jidoka concept is more focusses on ensuring quality, Toyota can ensure quality is easy to improve. Complexity is an enemy of effectiveness and improvement. Toyota should make its quality improvement efforts as simple as possible so that when employees undergo training, they can learn as quickly as possible hence ensuring much productivity. Making it complex may affect the employees since remembering complex instructions is not realistic (Von Krogh, Netland, and Wörter, 2018, pg. 54). Besides, by making quality easy to improve, Toyota can reduce vehicle recalls since the production process will be much easier to incorporate changes.
Lastly, Toyota can improve production through advancement in technology. Due to the fast-moving new technical advances, more automotive companies such as Volkswagen have increased their production capacity as well as quality (Von Krogh, Netland, and Wörter, 2018, pg. 55). As at now, Volkswagen is the number one automotive company in terms of production. New technology will ensure production is much quicker as well as addressing of automotive problems is easier. Besides, new technology will ensure both manufacturing processes and products are benchmarked efficiently hence being able to capitalize on the interests of the company. New technology will also ensure the efficiency of communication with both dealers and customers thereby enabling quicker transactions as well as relationships.
Why Toyota is successful.
Over the years, Toyota has grown to be very successful due to various reasons. To begin with, Toyota is good at long-term planning. Toyota tries to come up with products that last as well as remain competitive in the market. The company does not run into or respond to trends or fads rather the company develops products that resonate with the common people (Newman, 2008). For example, the Toyota Prius hybrid has remained an icon brand due to its efficiency in the gas intake. Gas prices are going high, and this has become a top concern for many people. The Prius has become a great choice for many hybrid lovers thereby allowing Toyota to make huge sales on the model.
Secondly, we have Toyota’s company values. Toyota has embraced values known as “kaizen” which refers to continuous improvement. Through these values, Toyota makes sure it makes incremental innovations rather than quick game-changing ideas that may bring inefficiencies (Collins, 2017). Through Kaizen, each employee has his or her responsibility to undertake.
Therefore, Toyota gets millions of ideas from its employees that are implemented within the organization. Besides, Toyota considers its employees in its major decisions hence the employees are encouraged to provide their best. The Kaizen culture also ensures mass production takes place effectively. In addition, through the Kaizen, team members, as well as team leaders, focus on improving their work practices on a day to day basis. Waste is also eliminated while superior quality is ensured through the companies’ values.
Thirdly, Toyota Production System is a factor that has ensured Toyota’s success for decades. TPS also known as lean manufacturing is designed for the purpose of getting most out of every resource hence ensuring waste is eliminated (Collins, 2017). Waste in this context may refer to employee idleness or the misuse of resources. Lean manufacturing came into play in Toyota due to the scarcity of resources, and it has assisted control inventory, labor, and the supply chain management. According to research, lean manufacturing ensures human effort is reduced by about 50% while at the same time improving financial performance (Rinehart, Huxley, and Robertson, 2018, pg. 87)
Lastly, Toyota’s products are more reliable due to their design simplicity. As compared to other brands such as BMW’s, Fords, and Cadillac’s, Toyota has few problems since the other brands incorporate more cutting-edge designs that are complex (Symes, 2017). The conservative nature of Toyota vehicles has allowed more people to prefer them since they don’t have many problems. In addition, Toyota is critical about the parts manufactured for producing the cars hence the company makes sure the parts are effective.
Conclusion
Toyota Motor Corporation is a company that promises more success in the future due to continuous improvement. This success depends more on the company’s operational strategies in which the company heavy relies on. Toyota understands if all operations elements are well considered, making sales and remaining competitive will be possible. Besides, Toyota’s new concept cars are promising, but the company will be forced to embrace advanced technology so as to be able to compete effectively in the market. For example, Tesla deems a challenge to Toyota due to how customers embrace electric cars since the future.
References
Chiarini, A., Baccarani, C. and Mascherpa, V., 2018. Lean production, Toyota Production System and Kaizen philosophy: A conceptual analysis from the perspective of Zen Buddhism. The TQM Journal. pp. 11-49.
Collins, D. (2017). The Key Factors of Toyota’s Success. [online] Bizfluent.
Fujimoto, T., 2018. Evolution of Organizational Capabilities in Manufacturing: The Case of the Toyota Motor Corporation. In Industrial Competitiveness and Design Evolution (pp. 191-221). Springer, Tokyo.
Nakata, H. (2018). Toyota takes steps to improve image | The Japan Times.
Newman, R. (2008). 5 Secrets to Toyota’s Success. [online] US News.
Reuters Editorial, (2018). Toyota Motor Corp (TM). [online] U.S.
Rinehart, J., Huxley, C. and Robertson, D., 2018. Just another car factory? Lean production and its discontents. Cornell University Press. pp. 67-98.
Symes, S. (2017). Why Toyotas Boast Superior Reliability. [online] GrabCAD Blog.
Toma, S.G. and Naruo, S., 2017. Total Quality Management and Business Excellence: The Best Practices at Toyota Motor Corporation. Amfiteatru Economic Journal, 19(45), pp.566-580.
Toyota Motor Corporation Global Website. (2018). Toyota Global Site | Production System.
Von Krogh, G., Netland, T. and Wörter, M., 2018. Winning with Open Process Innovation. MIT Sloan Management Review, 59(2), pp.53-56.
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