Read the case study and answer the questions below in paragraphs. (Answer and ex
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Question
Read the case study and answer the questions below in paragraphs. (Answer and explain)1) Compare and contrast Toyota’s manufacturing system with a conventional mass production system. What are the advantages of Toyota’s system? (10marks)
2) Do you think that the coorperation that Toyota has achieved with its suppliers and employees in Japan can be replicated in its overseas manufacturing operations? Explain. (5marks)
3) What market should Toyota concentrate on in the future? What challenges does it face? (5marks)
Case 16 Toyota In 2013: Lean Production and the Rise of the World's Largest Automobile Manufacturer Charles W. L. Hil INTRODUCTION the U.S. National Highway Transport& Safety Agency found no electronic fault with Toyota's "drive-by-wire" growth of Toyota has been one of the great success throttle system, which was initially blamed for the issue. tury. In 1947, the manufacturer producing around 100,000 vehicles a year. erron stories of Japanese industry during the last half cen and instead attibuted the problem to mechanical causes company was a little-known domestic (including pedals caught under floor mats), and "driver Irrespective of the failure to identify a clear cause, in 2012 Toyota agreed to pay $1.1 billion to settle a class per In 2012 Toyota sold 9.4 million light vehicles globally, making it the largest automobile manufacturer in the world ahead of Volkswagen with 9.1 million units sold and GM with 7.7 million units. haps, Toyota's legendary reputation for product quality Toyota's action lawsuit related to the issue. More importantly had taken a major knock. The question for For all of its success, however, the last few years had management now, was how could they reestablished the been challenging for Toyota. As a consequence of the copany as the undisputed leader in quality, and how could they fend of stronger competitors in a rapidly global financial crisis, demand for vehicles fell sharply in 2008 and 2009, pushing most of the world's major au tomobile companies into the red. GM, one of Toyota's main global rivals, had to file for Chapter 11 bankruptcy lace? 200s, However, the GM that emenged fromTHEORIGINS OF TOYOTA Chapter 11 2 years later was a leaner and more viable competitor to Toyota. At the same time, the South Korean The original idea behind the founding of the Toyota company, Hyundai-Kia, emerged from the financial crisis Motor Company came from the fertile mind of Toyoda in a strong position as the 4th largest automobile manu Sakichi. The son of a carpenter, Sakichi was an entre- facturer in the world and the most profitable. Volkswagen preneur and inventor whose primary interest lay in the position and closing in on textile industry, but he had been intrigued by automo- biles since a visit to the United States in 1910. Sakichi's Not only did Toyota face stronger global rivals than principal achievement was the invention of an automatic hitherto, its own position was damaged when a series of loom that held out the promise of being able to lower the too, has strengthening its Toyota in terms of sales volume. product recalls, mostly in the United States, tarnished its costs of weaving high-quality cloth. In 1926 Sakichi set brand and corporate image. The most infamous of these up Toyoda Automatic Loom to manufacture this prod- was the "sticky accelerator pedal" issue that allegedly led uct. In 1930 Sakichi sold the patent rights to a British to sudden uncontrolled vehicle acceleration and in some textile concern. Platt Brothers, for about 1 million yen. cases serious accidents. Toyota recalled some 9 million vehicles to in 2009-2010, the largest product recall in in- dustry history, and temporarily suspended some sales while Foster School of Business, University of Washington, Seattle. WA it tried to identify and solve the issue. An investigation by 98185, May 2013
Explanation / Answer
Toyota explored a lot of opportunities in the area of supply chain and technological developments. It has significantly improved its supply chain with the combination of operational strategies and technological advancements to help its lean system. This system helps Toyota to recover quickly from any disruptions. Headquartered in Japan, the company had learnt the impact of natural calamities on its operations after the earthquake in 2011. Company has regained its operations and has become number one seller in auto industry throughout the world. Toyota has worked strategically to remove slacks from its supply chain. Toyota uses just-in-time concept to deliver the products with minimal inventory cost and most efficiency. Just-in-time concept helps to reduce the inventory cost by placing the unassembled parts of autos. These parts are assembled as per the demand. This provides the facility of easy transportation of parts, customization of final products and lowered space coverage in inventory stores which reduces the overall operational cost. Toyota has linked the supply chain with global operations and follow the standardized procedures at all locations. Toyota follows the following principals of global supply chain:
Supply chains deliberations are integral to operational strategies: Traditional supply chains strategies are examined and improved based on changed requirements. Globalization of business has made supply chains deliberations more central to operational strategies.
Supply chain management needs more talent and leadership: Supply chain system was used to given priority after production and marketing. However, strategic focus has been shifted to supply chain for big companies like Toyota who invest in supply chain innovations. Toyota hires top talent for supply chain who can manage global exposure and risks associated with it. Toyota offers more responsibilities and authorities to its executives because supply chains are more vital for future of any organization.
Transportation in supply chain may benefit from regionalization: In the globalized world, it is not possible to implement same strategies throughout the world. Toyota follows the standardized approach, but is also focuses on regional existence of company’s professionals. Toyota enhances regional contacts for better delivery in local areas.
Apart from these principals, Toyota is heavily investing in technical development. Recently, it has made new systems involving internet-of-things concept which has made distribution easier. It provides the ease of real time tracking of goods and better documentation. It increased the automation in whole process which speedup the operations. #d printing is another such concept which has reduced the transportation of parts to long distance locations. This helps in producing exactly same parts at local stations. Toyota has managed its top most position by continuously enhancing its supply chain system across the boundaries. With the use of technology and operational strategies, Toyota is reaching to remote location with lower cost and better operational efficiency. Customers believe in its on-time delivery and quality products.
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