com Introduction Toyota is Japan's biggest car company and the second largest in the world after General Motors. It produces an estimated eight million vehicles per year, about a million fewer than the number produced by GM. The company dominates its home market, with about 40% of all new cars registered in 2004 being Toyotas. Toyota also has a large market share in both the United States and Europe. It has significant market shares in several fast-growing South East Asian countries. The company produces a large range of vehicles which are highly regarded for their quality, engineering, and value; their designs set global standards for safety, reliability and ease of maintenance. The Company Philosophy "Do the right thing for the company, its employees, the customer and the society as a whole." Origins The story of Toyota Motor Corporation began in September 1933 when Toyoda Automatic Loom created a new division devoted to the production of automobiles under the direction of the founder's son, Kiichiro Toyoda. Soon thereafter, the division produced its first Type A Engine in 1934, which was used in the first Model A1 passenger car in May 1935 and the G1 truck in August 1935. Production of the Model AA passenger car started in 1936. Although the Toyota Group is best known today for its cars, it is still in the textile business and still makes automatic looms (fully computerized, of course), and electric sewing machines which are available worldwide. During the Pacific War, the company was dedicated to truck production for the Imperial Army. Because of severe shortages in Japan, military trucks were kept as simple as possible. For example, the trucks had only one headlight in the center of the hood.

It is a matter of concern for all the automobile companies to regain their lost market .3 10.4 billion. 5.517 176.616. 6.616 172.9 -500 Rank 5 6 7 8 15 27 29 Revenues ($ millions) 193. Toyota is producing nearly 50 percent more cars than in 2001 and this year it will almost certainly pass General Motors to become the world's largest auto company. Toyota alone earned more than all the rest of the world's 12 largest auto manufacturers combined .649 80. 2.9 % change from 2003 12.898. even their competitors were losing out in almost all markets.$11. 4. 3.688 172.2 227.7 5.800 Revenues Profits Assets Rank 1. FORTUNE GLOBAL 500 (Year 2005) Toyota Motor Rank: 7 (2004 Rank: 8) Employees: 265.487 79.512. 7.Toyota earns $1250 per vehicle produced while GM loses $2311 per vehicle produced.753 $ millions 172. Company General Motors DaimlerChrysler Toyota Motor Ford Motor Volkswagen Honda Motor Nissan Motor Toyota Success Recipe The Toyota sales figures were skyrocketing. And it is pioneering a new technology for the 21st century that will shrink gasoline consumption and limit greenhouse gases.233 110.

Its goal is to incorporate less human effort. Principles of Lean Enterprise: Zero waiting time Zero inventory Scheduling . product design. Nissan and Honda.internal customer pull instead of push system Batch to Flow . The Toyota way of production was discussed throughout the world. Superior Technology & Quality 4. and less space to become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible. namely. Re-engineering 3. supplier networks and factory management.cut batch sizes Cut actual process times . Employee Satisfaction 1. The company's success is mainly due to the implementation of the following: 1. Hybrid Vehicles 5. Employee Welfare Costs 6. and more than the combination of its successful Japanese rivals. Toyota is worth more than the American Big Three put together. Toyota Production System 2. also read as Thinking Production System. Lean Manufacturing Just-In-Time Kaizen Jikoda Kanban Andan Pull System 1.share. with lots of research being undertaken. Lean Manufacturing Lean production is aimed at the elimination of waste in every area of production including customer relations. less time to develop products. Toyota Production System Toyota Production System. less inventory.1. makes use of the following vital elements. Market capitalisation says it all.

Kaizen Kaizen is the lean manufacturing term for continuous improvement and was originally used to describe a key element of the Toyota Production System.2. In use. a term used in Lean manufacturing. Employing Kaizen means the following: Proactively improve production Reduce manufacturing waste Increase employee involvement Increase customer satisfaction 1. Just-in-Time Just-in-time is a manufacturing philosophy pioneered by Toyota in 1970s. It is a quality control process used in the Toyota Production System which applies the following four principles: Detect the abnormality Stop . Japanese word for card.Shrinks lead times Saves turnover expenses Reduces set-up times Multiplies inventory turns 1. Kaizen describes an environment where companies and individuals proactively work to improve the manufacturing process. JIT implementations include: Inventory reduction Smaller production lots and batch sizes Quality control Complexity reduction and transparency Waste minimization 1. The heart of JIT is Kanban.3. meaning "automation with a human touch".4. It's a method of waste elimination by which the inventory levels are minimized. Jikoda Jidoka.

Consider a Toyota model. Instruction for production and conveyance Visual control tool to check for over production and to detect irregular processing speeds Tool to perform kaizen 1.6. . Every employee is empowered to stop the production on finding a defect. there is little opportunity for workers to gain wisdom because they just produce according to the instructions they are given. It is one of the primary tools of JIT system. In contrast. Pull System Under a 'push' system.e. so that Toyota production facilities around the world could easily add / switch new models or ramp-up production of existing models within a short period while ensuring the top quality traditionally associated with the Toyota brand. Toyota's quality control during production ensures that the correct materials and parts are used and fitted with precision and accuracy. Kanban A Japanese term meaning. 1. etc. description.Fix or correct the immediate condition Investigate the root cause and install a countermeasure 1. quantity.7. The next Toyota strategy will be to re-engineer the model. Robots are used widely in mass production. 3. "signal". Once a GM / Ford vehicle fails in the market. i. Andon electric boards will highlight the location where the defective part is located. can be attended. a 'pull' system asks the worker to use his or her head to come up with a manufacturing process where he or she alone must decide what needs to be made and how quickly it needs to be made.5.. the whole manufacturing facility for manufacturing the model is scrapped and the employees are often pushed out of the company. Superior Technology & Quality All Toyota production facilities are designed in such a way so as to ensure flexibility. failed to impress the market. By allowing the choice of either people or robots depending upon profitability. completely alter the failed model using the same production facility. Andan The production line is stopped if there is a problem somewhere in the line. It signals a cycle of replenishment for production and materials. which is newly introduced in the market. It maintains an orderly and efficient flow of materials throughout the entire manufacturing process. This effort is combined with thousands of rigorous inspections performed by team members during the production process. Re-engineering Re-engineering has been a major factor for the success of Toyota. The card contains. and hence. 2. the production line offers the flexibility to handle everything from low-volume to mass production. This is done to prevent the defective items from passing to the next stage. It is usually a printed card that contains specific information such as part name. This method is not practiced at General Motors and Ford. This results in loosing the knowledge gained at great cost.

called an andon cord . Power Quality Awards. shows the technical superiority of Toyota. any team member can pull a rope . namely GM. They are inspectors for their own work and that of co-workers.000 units. Hybrids represented 1. Toyota plans to sell 1. There is an increased demand for the Hybrid vehicles all round the world especially in the US due to the following reasons: Increased fuel prices Environmental factors Hybrid engines have been touted as a way to make automobiles more fuel efficient and less costly to run.Team members on the line are responsible for the parts they use.2 percent of the total vehicles sold in 2005. GM takes 34 hours for producing a vehicle while Toyota does it in 27 hours. Ford and Chrysler. Presently. Only when the problem is resolved is the line re-started. 4. which include the J. The company is also planning to expand the hybrid technology for all the models in the Toyota stable.897 cars sold for the year 2005 .000 hybrids in US in the year 2006. This process involves every team member in monitoring and checking the quality of every car produced. the company offers hybrid versions for Prius.000. When a problem on any vehicle is spotted. which sold nearly 26. Toyota plants in Japan and North America have won the prestigious World-wide Platinum Plant Quality Awards.52 percent of the total hybrid market. . which reinstate the Toyota quality.50. The Toyota Prius is one of the world's first commercially mass-produced and marketed hybrid automobile. Awards & Recognitions Toyota manufacturing facilities around the world have won quality awards. Employee Welfare Costs The skyrocketing of the healthcare costs and the pensions for the retirees have drained the bottom lines of the Big Three. Prius was a run-away success with the demands exceeding the supply. Hybrid Vehicles The hybrid cars market is on upswing and is growing very rapidly. The Prius first went on sale in Japan in 1997. The company will be using the existing production facilities to manufacture hybrids rather than having a dedicated plant. Toyota products were ranked at the top with fewer than industry average of problems per 100 vehicles. Lexus RX330 and Camry. America spend on gasoline every minute is about $200. The Toyota Prius led the way with 107. 5. and was introduced to the worldwide market in 2000. The world's automakers are now embracing hybrid vehicles in an effort to match Toyota's success and give customers more options to combat high gas prices. The next most popular hybrid was the Honda Civic Hybrid.strung along the assembly line to halt production. D. Toyota Highlander. Toyota gave more emphasis in developing hybrids while GM and Ford concentrated on developing SUVs (Sports Utility Vehicles).

00. Employee Satisfaction Toyota has created an organizational culture that encourages employee participation. a journey that started in 1933 and is still continuing. surpassing General Motors. . High level of employee loyalty and commitment to quality is observed in Toyota employees. which is essential for successful TPM (Total Productive Maintenance). thereby lowering maintenance and operating costs. Employee participation is ensured through Quality Circles Suggestion Schemes Incentive programmes It is observed that there are more number of satisfied employees at Toyota when compared to GM and Ford. 6. Production personnel are trained to perform routine maintenance.500 $1. All credits to the production prowess and the technical innovation. The knowledge base of all the employees is used to improve equipment reliability and productivity. Two other important aspects of TPM are training and open communication between operators and engineering. Imminent is the day. which is dominated by the Americans.Healthcare Costs (for the plants in US) Cost per Vehicle $1. which made the Japanese sail through the rough waters.300 $201 General Motors Ford Toyota On pensions. the day Toyota will be the largest automobile manufacturer of the world. the Big Three supports 8. Group activities are promoted among the shop-floor team members.000 retirees which is indicative of a much younger workforce. Japanese auto major is giving a run for the auto industry.000 retirees (from the US operations) while Toyota has hardly 1. Conclusion It is for sure that with superior technology and best industry practices.

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