...Introduction Toyota Motor Corporation is one of the world largest automobile manufacturing. They have manufacturing plant throughout the world. Toyota has thirteen manufacturing plants in North American alone. One of its largest plants is here in the Georgetown, Kentucky where they produce the new Camry. Toyota is poised to overtake General Motors and become the largest car manufacturer in the world. Much of this success can be attributed to the renowned Toyota Production System (TPS). This system is one of the most admired lean manufacturing systems in existence and is constantly used in operational management text books as an example of how important operational management is to an organization. The main objectives to the TPS are to design out overburden and inconsistence, and to eliminate waste. Toyota has spent millions of dollars to bring over this system and implement here in its North American manufacturing plants. In our case we focus on the breakdown of this system that allows a small issue in seat installation to turn into a large problem that is slowing down production. Car production has dropped from run ratio of 85% to a run ratio of 95% in only one month. The run ratio measures the number of cars actually assembled in proportion to the number of cars that could have been assembled with no line stoppages. Along with the slowdown in production no one can put their finger on what is causing this and why there is a breakdown in the otherwise efficient TPS that usually...
Words: 2247 - Pages: 9
...Company-specific production systems and competitive advantage: A resource-based view on the Volvo Production System. International Journal of Operations & Production Management, Vol. 33, Iss. 11/12 Post-print. This is an Author's Original Manuscript of an article accepted for publication in the International Journal of Operations & Production Management, Vol. 33, Iss. 12. Forthcoming. Company-specific Production Systems and Competitive Advantage: A resource-based view on the Volvo Production System Torbjørn H. Netland1, 2 and Arild Aspelund1 1 Department of Industrial Economics and Technology Management, NTNU 2 McDonough School of Business, Georgetown University Abstract Purpose: In order to improve competitiveness on a global scale, multinational enterprises increasingly develop a company-specific Production System (XPS) and deploy it in their worldwide operations. An XPS is synonymous with a tailored corporate-wide improvement programme. The purpose of this paper is to explore the circumstances under which an XPS can provide a competitive advantage. Methodology: We use an explorative case study methodology to investigate the link between the establishment of an XPS and competitive advantage. Specifically we investigate the part of the Volvo Group’s globally implemented Volvo Production System (VPS) that aim to improve the manufacturing processes worldwide. Due to its historical trajectories, Volvo constitutes a unique case for studying the...
Words: 10370 - Pages: 42
...Personal work Automotive-Toyota 30-11-2012 Contents Introduction Lean Manufacturing 1) Creating continuous process flow, 2) The pull system, 3) Leveling out the workload. Toyota Production System 1) Just In Time 2) Jidoka Long term relationship with suppliers Risk and Challenge 1) Toyota Vehicle Recalls 2) Environmental sensitivity Conclusion Introduction Toyota is one of the world's largest automobile manufacturers, selling over 9 million models in 2006¹on all five continents. A Top 10 Fortune Global 500²enterprise, Toyota ranks among the world's leading global corporations and is proud to be the most admired automaker³ an achievement the company believes stems from its , dedication to customer satisfaction. In early twentieth century, the three big motor companies (the Big 3) – General Motors (GM), Ford & Chrysler almost dominated the global market. In 1994, Toyota replaced Chrysler, and it became the global No. 2 motor manufacturer by squeezing out Ford in 2003. Since 2008, Toyota has replaced GM to be the largest automaker globally. Toyota is a successful corporation and has a very good performance in automotive industry, but it also has some troubles and challenges to face, like the problem of Toyota vehicle recall in the last three years. So we have to ask how did Toyota achieve its success? How Toyota face to the challenge? Toyota is known for its reliable cars among the general public, but it has also been known in manufacturing, management...
Words: 1806 - Pages: 8
...2001). These operations performance objectives are analysed here in accordance to TMC. 1) Doing things right by providing error free goods and services, which will satisfy the customers, is known as ‘quality’. According to the case study, Toyota’s vehicles consistently rank near the top in third-party customer-satisfaction surveys. Being voted by many market research and surveys as the car of the year for several years it shows that, Toyota has a successful record worldwide. Because of the good quality Toyota’s success kept going, where in 1995, Toyota was the best car in the Middle East. Also, TMC has produce a good quality cars that are quit and do not emit unpleasant fumes, such as more than 40 emission-control systems and dozens of technologies that have improved passenger-car safety (Ahmed, A., 2003, Coursework). 2) An other performance objective is speed, which means by doing things fast, to minimise the time between the order and the availability of the product or service that gives the customer e speed advantage. The TMC’s techniques are focussed operations that reduce complexity by using simple and small machines, which are robust and flexible. By rearranging layout and flow to enhance simplicity improves speed of production. On the coursework, statistics show that in the late 1980s, the output per worker was as much as two or three times higher than US or European plants. 3) Third performance objective is dependability that means doing things in...
Words: 1635 - Pages: 7
...Management TOYOTA Team P.A.L Minchul Seo, Altanzul Table of Content 1. Introduction 2. Industries and Company Information 3. Explanation of OM Capabilities 4. How Company Uses OM 5. Identify Problems / SWOT analysis 6. Areas to use for improvements of Critical Business activities in Operations Management 7. Provide Multiple Solutions 8. Conclusion Introduction Toyota Motor Corporation is one of the leading automobile manufacturers in the world by not only its models but also its management. We can say that the principles that Toyota Motor Corporation uses are the way to their success. For instance, they do not only want to be successful by themselves but also they respect their partners and suppliers by challenging them and helping them improve. Toyota wants to be reliable to the customers, suppliers and to the organization. For this reason, they use some operating management technologies such as Just In Time (JIT), Quality Management (QM), Total Quality Management (TQM) and so on. Using these technologies they could reduce to time they spent on manufacturing, shipping, ordering, receiving, forecasting and many others. It also affected to their quality and the overall mission to be succeed. They do not try to hide their weakness and problems in the organization so that they can fix them easily by using simple visual indicators to help people determine their problems immediately whether they are in standard condition deviating from it. Toyota Motor...
Words: 4018 - Pages: 17
...financials, size, and global presence. Toyota Motor Corporation was founded in 1919 by the famous Japanese inventor, Saki chi Toyoda. Its primary business is manufacturing and selling automobiles. With operations in the U.S. for the past 50 years, Toyota is one of the most well known automobile manufacturers in the world. In fact, it is the largest automobile manufacturer in the world, producing over 7 million units in the last financial year. (Liker, 2008) During this time it reported a profit of over $5 billion dollars. It is a multinational corporation with its corporate office located in Toyota City, Aichi, Japan. Toyota currently employs roughly 310,000 people around the world. (2010) The Toyota Way and the Toyota Production system are what make up Toyota’s DNA. The Toyota Way can be summarized two ways: continuous improvement and respect for people. (Liker & Hoseus, 2008) Continuous improvement is translated as Kaizen which is huge in the Toyota culture where this means challenge everything. (2008) Toyota is also responsible for the invention of the term “lean production” sometimes called the Toyota Production System or TPS. (Liker, 2005, p. 115) This invention has triggered a global transformation in just about every industry to Toyota’s manufacturing and supply chain philosophy and methods for over a decade. The company has won awards for being the best in class by both its peers and competitors throughout the world. Toyota automobiles have consistently been at...
Words: 1838 - Pages: 8
...How Toyota Ought to Organize its Decision Processes to Minimize the Risk of Major Design Flaws that Lead to Massive Recalls and Driver Deaths from the Perspective of Organization Design and Decision-Making Abstract Japanese automaker, Toyota was a quality assurance trademark trusted by consumers worldwide. Though, in recent years, the company has been inundated by numerous vehicle recalls. Toyota’s quality problems surfaced when it was forced to recall nearly 7 million vehicles in the late part of 2009 (Chris, 2010). The recall crisis of 2009-2010 prompted a wave of negative publicity for the company (Chris, 2010). Many issues were discovered that led to the recalls. Sticky gas pedals, pedal entrapment, and software glitches that affected braking in some models were some of the problem areas (Trudell, 2014). Over time, the safety related recalls continued growing. In fact, by May 2011, the automaker had recalled close to 20 million vehicles (Trudell, 2014). Naturally, the numerous recalls and lawsuits that ensued threatened to damage Toyota’s image; thus, to rectify this the company should organize its decision processes more efficiently. Keywords: organizational change, recall, total quality management Introduction For decades, Toyota set the standard for quality and reliability in the automotive industry. In fact, the Toyota brand has been touted as the pinnacle of automotive excellence by rating industries and industry consultants (Piotrowski & Gray, 2010)...
Words: 4041 - Pages: 17
...“Better cars for more people” has been the mantra as Toyota continued to focus on the customer. This focus is derived through the understanding of producing a mass amount of cars to a specific custom build and undisputable quality. In this same spirit, Toyota established their developed principles and practices in their Georgetown factory in Kentucky, USA. The 1992 case study published by Harvard Business School, Toyota Motor manufacturing USA, Inc. focuses on the addressal of the issues dealing with car seat defects and their impact on the basic principles of the company. The case study is written from the shared perspective of the author and Doug Friesen, who was the Assembly Manager at the time. Although the case study identifies the manufacturing problem with the drop in production from 95% to 85% believed to be caused by the errors with the seat kits/assemblies. However upon further examination, the seats were just a symptom of the larger problem in the production line. Upon closer review, the larger issue was more rooted in the basic culture and practices within the assembly line. There are fourteen management principles (FMP) taught as part of the Toyota Way Philosophy to help guide the growth of the plant to better address and adapt to the new culture of “Good thinking, Good Products” (pg 3). This paper will identify some of the management principles that were not adhered to or properly practiced which contributed to the basic issues within the shop. The lack...
Words: 1795 - Pages: 8
...Toyota in North America Donald L. Woolridge, Sr. Indiana Wesleyan University February 20, 2013 Course ADM537A Toyota in North America This paper will provide an overview and history of Toyota in general and the company’s operations in North America and its product lines specifically; share comments on the company’s organizational structure and senior management leadership style; discuss its nearest competitors – Ford, GM and Chrysler, known as the Detroit 3; share the weighted average cost of capital; provide insight in the company’s rationale/methodology for evaluating capital budgeting opportunities in North America; review the economic forecast for the industry; show the characteristics of common stock and bonds, share key financial ratios for three years, comparing to industry and nearest competitors; and in conclusion share a strong, fact-based summary of why or why not a person should make an investment in the common stock of Toyota. Historical Overview Toyota is a family-owned and operated company with very humble beginnings. Sakichi Toyoda, his son, Kiichiro Toyoda and Taiichi Ohno all played an important role in not only laying the foundation for what would become the automotive giant Toyota, but also in the development of the system that has revolutionized lean manufacturing; the Toyota Production System (TPS) (ToyotaGeorgetown.com, 2006-2013). Sakichi Toyoda invented the automated loom which ensured quality of product by stopping when threads...
Words: 4416 - Pages: 18
...Toyota Crisis According to Motor Trend’s Scott Evans the crisis started with a car crash in California in August 2009. Shortly after that is January of 2010 Toyota initiated 2 separate recalls covering 7.5 million vehicles. Toyota suspended the sale of eight of its vehicles costing them $54 million a day in revenue. The investigation from the first crash in 2009 revealed that the car had the wrong floor mats installed and the one on the driver’s side was interfering with the gas pedal. Not long after the apologies were issued from Toyota to the family of the victims more reports of problems were uncovered. These reports were becoming a collection of unintended acceleration cases involving Toyota vehicles. The biggest problem that Toyota faced at this time was the deaths that seemed to be adding up at a rapid pace. Operational Effectiveness and Lean Manufacturing “Operational Effectiveness refers to any number of practices that allow an organization to better utilize its inputs by, for example, reducing defects in products or developing better products faster” – Michael E Porter. Toyota was so focused on this topic because of the benefit of reduced lead time and production cost. Lean is about doing more with less: less time, inventory, space, labor, and money. Lean Manufacturing (also known as the Toyota Production System) is, in its most basic form, the systematic elimination of waste; overproduction, waiting, transportation, inventory, motion, over-processing...
Words: 852 - Pages: 4
...Operations and Supply Chain Case Studies In today’s environment of global shopping where the demand for products is as wide as the number of firms offering them, orders can be placed in advance or at a moment’s notice from across the globe. The question of the manufacturer or reseller is how to best manage production across the supply chain. This paper will have two parts to it; part one will review the case study of the Realco Breadmaster. It will provide analysis on the current supply chain management and will make recommendations for a more strategic approach. Part two will focus on a case study for Toyota. This case will focus on quality and the Lean philosophy. First, it is important to provide some foundation support of what operations and supply chain management entail. Every firm or organization must make a product or provide a service to someone that is needed or valued. Operations are the collection of people, technology, and systems that are in a firm whose primary responsibility is to provide the company’s products or services (Bozarth & Handfield, 2008). “Supply chain is the network of manufacturers and service providers that convert and move good from the raw materials state through to the end user” (Bozarth & Handfield, 2008, p.4). Planning and controlling operations and supply chains are critical to the strategic plan of an organization, and so is the coordination and communication with other functional areas of the firm’s supply chain partners....
Words: 2333 - Pages: 10
...Toyota’s Global Production Strategy Toyota Motor Corporation is one of the largest car makers in the world. Although headquartered in Toyota City, about 150 miles west of Tokyo, it has production or assembly facilities in many parts of the world. The company is known for its effective and efficient approach to production management, its quality products, and its outstanding labor relations. The Toyota production system (TPS) integrates craft with mass production, and it is now emulated by its competitors. The system aims at producing high-quality cars at low costs, accomplished in part by having parts delivered to the production line “just in time” to avoid the high inventory costs of the traditional assembly operation. It is sometimes called “just-in-case” inventory system, referring to the practice of storing additional parts just in case a part is defective or is needed because of unforeseen circumstances. The effectiveness of TPS is aided by close relationships with suppliers and by continuous improvement, teamwork, decentralized decision making, and a motivated work force. Vehicles are designed with customers in mind, who can order cars according to their needs. Even after the car is delivered, customers are kept happy by good customer service. Toyota uses several ways to improve production. Workers are trained in several kinds of skills so that they can operate several machines. Electrical signs, called andon boards, show daily production figures and problems on the assembly...
Words: 1019 - Pages: 5
...Quality Management Systems GM588 Managing Quality Toyota's Brush with Disaster due to the Breakdown of the Company's Quality Management Systems Introduction Toyota was started early in the 20th century by Sakichi Toyoda. He was a successful inventor and initially raised the money to start the company by selling the design of his automatic loom to a British company. He saw the potential of automobiles and the internal combustion engine and began working on researching and designing small gasoline engines. Here is a timeline of the early Toyota company that is available on their website: • 1929 Automatic-loom patent is sold to a British company. • 1930 Kiichiro Toyoda begins research on small gasoline-powered engine. • 1933 Automobile Department is established at Toyoda Automatic Loom Works, Ltd. • 1935 The Toyoda precepts are compiled. • 1936 The AA Sedan is completed. • 1937 Toyota Motor Co., Ltd. is established. • 1938 Honsha Plant begins production • 1950 Company faces a financial crisis; Toyota Motor Sales Co., Ltd. is established. • 1951 Suggestion System begins. ("History of",n.d.) What is unique about Toyota is how they designed and implemented a system of production known as, The Toyota Way, that not only creates happy empowered employees, but also generates very little waste and has become a quality management model for companies worldwide. Problem Statement Toyota has been an icon...
Words: 3198 - Pages: 13
...Lean production refers to a highly efficient manufacturing techniques mainly developed by Japanese companies in 1980s and beginning of 1990s (Rosen, 2011). The technique involved the combinations the flexibility and quality of the craftsmanship developed by Ford with low cost mass production (Rosen, 2011). In lean production system employees are organized in teams. In each team, an employee to do all the tasks required by the team and there is less specialization of the duties as was the case with the mass production (Rosen, 2011). The discussion below explores the application of lean production by Toyota Corporation, covering what they did, how they did it, and their success or failures with the project. The lean production as used by Toyota was to reduce redundancy, increase output and to save on the cost associated with the employee’s hiring cost (Rosen, 2011). Toyota employed lean production by bringing together into one working place all the employees of the same process of the vehicle assembling such as designers, sales and marketing people, this was to deliver the final product close to the point of sale, a process called just in time (Rosen, 2011). The process also put a lot of emphasis on keeping the level of inventory as low as possible. There should be little or almost no stocks to be kept in the ware houses, inputs are ordered when they are needed. This saves cost of holding stocks, cost of storage and insurance of the stored goods and minimizes the chances of...
Words: 667 - Pages: 3
...Introduced by Toyota, Lean is more than just a tool, but a philosophy that needs to be adopted and incorporated into the culture of the organization. It is very important that the organization can see that leadership have bought in to the approach and are willing to support Lean. Numerous examples exist that demonstrate failed attempts at implementing Lean. It is important that organizations appreciate that they cannot simply wake up one day and choose to introduce Lean. It took Toyota many years to develop their culture into one of continuous improvement. For organizations that are new to Lean, the effort required will be significant in order to realize the true value associated with Lean principles. Poor planning will almost certainly result in disappointment and leave a strong negative association with any future Lean attempts along with a big investment with little to no return. With a focus on continuous improvement and continuous flow, manufacturing based on pull rather than push demand will assist organizations in becoming Lean. While Lean is a long journey, it can be one that returns significant value to an organization. What follows is a view of the history of Lean, some of the tools such as Value Stream Mapping, Kaizen, etc, along with the expected benefits, potential barriers, critical success factors, and a quick view of Lean at Suncor. Table of Contents 1.1. Introduction 4 1.2. Concepts, Theories, Tools and Techniques 5 1.2.1. The Toyota Production System...
Words: 6409 - Pages: 26
