3. TOYOTA HAS BUILT HUGE MANUFACTURING COMPANY THAT CAN PRODUCE MILLIONS OF CARS EACH YEAR FOR A WIDE VIRIETY OF CONSUMERS. WHY WAS IT ABLE TO GROW SO MUCH BIGGER THAN OTHER AUTO MANUFACTURERS? SUBSTANTIATE YOUR ANSWER BY PROVIDING CONCRETE MEASURES OR INTERVENTIONS THAT TOYOTA HAS DONE OR HAS BEEN DOING.
Toyota was the first company to introduce lean manufacturing and total quality management practices in production of cars. For some time, the company was the only practitioner of these practices and had the lowest manufacturing and production costs worldwide. Toyota currently sells about 70 different models of cars under its namesake brand. Because they are the market car leader, they are in need to produce large number of cars that will be sold worldwide. The Toyota Production System (TPS) is an integrated socio-technical system, developed by Toyota that comprises its management philosophy and practices. The TPS organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers.
The system is a major precursor of the more generic “lean manufacturing.” Taiichi Ohno, Shigeo Shingo and Eiji Toyoda developed the system between 1948 and 1975. Originally called “just-in-time production,” it builds on the approach created by the founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno. This system, more than any other aspect of the company, is responsible for having made Toyota the company it is today. Toyota has long been recognized as a leader in the automotive manufacturing, and production industry. The principles underlying the TPS are embodied in The Toyota Way. According to external observers, the Toyota Way has four components: 1. Long-term thinking as a basis for management decisions
2. A process for problem-solving
3. Adding value to the organization by developing its people 4. Recognizing that continuously solving root problems drives organizational learning
The underlying principles, called the Toyota Way, it have been outlined by Toyota as follows: 1. Continuous Improvement
a) Challenge (We form a long-term vision, meeting challenges with courage and creativity to realize our dreams.) b) Kaizen (We improve our business operations continuously, always driving for innovation and evolution.) c) Genchi Genbutsu (Go to the source to find the facts to make correct decisions.) d)
2. Respect for People
a) Respect (We respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust.) b) Teamwork (We stimulate personal and professional growth, share the opportunities of development and maximize individual and team performance.)
3. Long-term philosophy
a) Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.
4. The right process will produce the right results
a) Create continuous process flow to bring problems to the surface. b) Use the “pull” system to avoid overproduction.
c) Level out the workload (heijunka). (Work like the tortoise, not the hare.) d) Build a culture of stopping to fix problems, to get quality right from the first. e) Standardized tasks are the foundation for continuous improvement and employee empowerment. f) Use visual control so no problems are hidden.
g) Use only reliable, thoroughly tested technology that serves your people and processes.
5. Add value to the organization by developing your people and partners
1. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.
2. Develop exceptional people and teams who follow your company’s philosophy.
3. Respect your extended network of partners and suppliers by challenging them and helping them improve.
6. Continuously solving root problems drives organizational learning a) Go and see for yourself to thoroughly understand the situation (Genchi Genbutsu) b) Make decisions slowly by consensus, thoroughly considering all options
(Nemawashi); implement decisions rapidly; c) Become a learning organization through relentless reflection (Hansei)
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