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Toyota - Case Analysis

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EMBA 558 – General Management & Strategy

Case Analysis of “Toyota in 2009:
The Origins and Evolution of the World’s Leading Automobile Manufacturer”

Toyota has grown its production from 100,000 in 1947 to 9.3 million in 2008, making it the number one automobile maker in the world. The astounding growth is due largely to Toyota’s manufacturing system, which contrasts sharply with the conventional mass production system of GM and Ford. A striking difference between the mass production system and Toyota’s manufacturing system is the amount of time it took to set up machines for stamping out automotive body parts. For Toyota, the quicker the time, the more economical and efficient the process was, which reduced the need for specialists and eliminated worker down time by increasing their productivity. In addition, the mass production system emphasized producing a limited product line in large quantities to gain economies of scale, while Ohno Taiichi at Toyota felt such long production runs created massive quantities that had to be stored in warehouses, which would not be cost-effective. More importantly, if the machine settings were wrong, such long production runs (e.g. 500,000 door handles) would result in a significant number of defects and be costly. Another key difference between the two systems was that the mass-production system could not accommodate customer tastes for product diversity, while Toyota’s manufacturing system could by making small production runs that improved upon quality and added greater product variety. Thus, the likely result of Toyota’s manufacturing system is that it gave them a strategic advantage in keeping their costs low through efficiencies in worker productivity, assembly line innovation (the line never stops), and quality control.
The difference between the way supplier relations were managed at Toyota and that of

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