TUNKU PUTERI INTAN SAFINAZ SCHOOL OF ACCOUNTING

BKAM 3063 OPERATION AND PROJECT MANAGEMENT

SECOND SEMESTER 2022/2023 SESSION (A222)

PROJECT 2: JIT TOYOTA

PREPARED FOR: DR. MUHAMMAD ROSNI BIN AMIR HUSSIN

PREPARED BY: GROUP B2

ATTENDANCE NAME MATRIC

NO. NO.

B11 WAFIQAH BINTI RAZALI 280288

B34 ROSELINA BINTI ROSDI 280785

B38 LOCHANAA DEVI A/P SARAVANAN 280862

B43 MARSYA ISNAIRAH BINTI JASRINIZAR 281432

B45 WAN NUR SAADAH BINTI MOHAMAD ZULKURNAI 281622

B47 GAYATRI A/P APPARAO 288850

B48 NURUL HANNANI BINTI HASZAKI 289991

SUBMISSION DATE: 6 JULY 2023

 TABLE OF CONTENT
1.0 Introduction ................................................................... 1

1.1 Company Background ..................................................... 1

1.2 History of JIT ................................................................. 2

2.0 The factors that contribute to the JIT of Industry 4.0 in

Toyota .................................................................................. 3

2.1 Integration of Technology and Lean Manufacturing ..... 3

2.2 Collaboration and Communication within Supply Chain 4

2.3 Real time data and connectivity ................................... 5

2.4 Continuous improvement and the Kaizen culture ......... 7

3.0 Benefits ......................................................................... 10

3.1 Lower inventory carrying costs ................................... 10

3.2 Increase efficiency ..................................................... 11

3.3 Decrease waste .......................................................... 12

3.4 Improve storage space usage ..................................... 13

4.0 Challenges of implementing JIT in industry 4.0 era for

Toyota Motor Corporation ................................................... 15

4.1 Data Integration ......................................................... 15

4.2 Cybersecurity.............................................................. 16

4.3 Workforce Skills and Training ..................................... 17

4.4 Sensitive to Any Kind of Error ..................................... 17

5.0 References .................................................................... 19

1.0 Introduction

1.1 Company Background

The largest Japanese automobile manufacturer and

automotives companies in the world is the Toyota Motor Corporation.

In 1933, the Toyota Automatic Loom Works Ltd was established and

was incorporated as Toyota Motor Corporation Ltd in 1937 as well as

many associated companies were entrenched such as Toyoda

Machine Works, Ltd. (1941) and Toyota Auto Body, Ltd. (1945). In

the 1960s and ’70s the company expanded rapidly, exporting large

numbers of cars to foreign markets. After many of its business

segments were consolidated, the corporation adopted the name

Toyota Motor Corp. in 1982. Today Toyota has assembly plants and

distributors in many countries. In addition to making automobiles, its

companies also make trucks, vehicles, auto components, steel,

synthetic resins, automatic looms, cotton, wool, and other textile

products, as well as industrial machinery. Others work in the real

estate, prefabricated home industry, and raw material import and

export. Toyota and Lexus are two of its brands. (Toyota Motor Corp.

Summary | Britannica, n.d.)

1
1.2 History of JIT

Just-in-time (JIT) is a production or so-called lean

manufacturing. Former Toyota executive Taiichi Ohno and renowned

engineer and consultant Shigeo Shingo were the creators of these

techniques. Just-in-time (JIT) production is a ‘pull’ system of

providing the different processes in the assembly sequence with only

the kinds and quantities of items that they need and only when it

needs them. The manufacturing and transportation will always be

consistent through the production side by each step and each process

that had been held. The individual cars basically can be built to place

order that all the components had to be right on point for the first

time itself because there will never be any alternatives in stock and

this states the use of JIT among the TPS which is the Toyota

Production System. It is therefore impossible to hide pre-existing

manufacturing issues, they have to be addressed immediately. The

concept of "Just-in-Time" , in which each process or procedures that

produces only what is needed for the next process in a continuous

flow. It improves productivity by having these three elements, which

is making only "what is needed, when it is needed, and in the amount

needed". (Toyota JIT, n.d.)

2
2.0 The factors that contribute to the JIT of Industry 4.0 in

Toyota

2.1 Integration of Technology and Lean Manufacturing

The just-in-time method was developed in the 1970s in Toyota's

manufacturing system. With the development of Industry 4.0, just-

in-time manufacturing has developed into an important component

of lean manufacturing, enabling automotive businesses to create

items more effectively and efficiently. A key component of just-in-

time inventory control is smart automation. The manufacturing line

itself is a representation of intelligent automation, in which every

section is coordinated to create automobiles that correspond to

exacting standards.

Inventory control has benefited from automation because of

RFID technologies. They provide real-time tracking of resources,

which increases the manufacturing cycle. Additionally, the RFID

technology removes the need for collecting inventory, which frees up

space and lowers costs by minimizing downtime. Big data analytics,

AI, and machine learning are also important components of just-in-

time. They aid in the early detection and forecasting of future supply

chain bottlenecks.

3
 Toyota has implemented the Toyota Production System (TPS),

which is based on the principles of lean manufacturing. With this

approach, there is a significant emphasis on waste reduction,

encouraging continuous improvement, and empowering staff to

identify and solve problems. This involves analyzing data from

sensors and other sources to spot patterns and trends, then applying

this knowledge to modify their production processes in real-time.

Overall, Toyota has been able to improve its JIT production process,

decrease waste, and boost efficiency through the integration of

technology and lean manufacturing concepts.

2.2 Collaboration and Communication within Supply Chain

The supply chain's cooperation and communication are crucial to the

Just-In-Time methodology's success. One of the important elements

that significantly contributes to the effectiveness of the system is

constant communication with suppliers and distributors. The

ordering, production, and delivery processes may be decreased and

made more effective when suppliers and distributors are on board.

Cooperation is currently easier than ever through the integration of

digital communication technologies in Just-In-Time and Industry 4.0.

Today, a growing number of organizations implement social media

4
platforms and cloud-based technology to communicate with suppliers

and distributors quickly and effectively.

The production process moves along more quickly when teams

work well together because supply chain problems may be fixed right

away. The just-in-time manufacturing process depends on suppliers

to keep up with production rates and supply the correct parts when

needed. Bottlenecks and delays brought on by poor communication

can eventually harm production and customer happiness. Building

confidence with suppliers and distributors is essential for successful

collaboration. Understanding the suppliers' strengths and constraints

may also help to prevent misunderstandings and create stronger,

more productive cooperation. The just-in-time technique may be an

effective tool in the supply chain to satisfy customer needs, boost

productivity, save costs, and boost the bottom line of the business

through excellent cooperation and communication.

2.3 Real time data and connectivity

The utilization of real-time data and connectivity is a crucial

component of the industry 4.0 movement. Imagine that you are

working in a manufacturing facility and that there are sensors

positioned at various stages of the production process. These sensors

can gather information about a wide range of things, such as

5
inventory amounts, the flow of production, and how customer

demand is changing. This information is sent to a central system

where it can be studied and interpreted to give useful information.

Because they operate their facilities in this manner, Toyota is able to

have a greater understanding of everything that is happening there

at any one moment.

Using real-time data, Toyota can also figure out if there are any

slow spots in their production process. A bottleneck is a place in a

production line where things stop moving and cause delays for the

whole line. Because it looks at the data in real time, Toyota can find

any places that are causing delays and make changes to fix them

right away. For example, if a certain piece of technology keeps

breaking down and slowing down production, they can fix the

problem as soon as possible to keep production from being slowed

down.

In addition, the availability of real-time data enables Toyota to

improve the efficiency of its production schedules. They are able to

modify their plans according to the current demand, which allows

them to guarantee that they produce an adequate quantity of goods

to fulfill the requirements of the customers without overproducing.

Toyota is able to be more sensitive to changes in consumer demand,

6
which results in reduced lead times and increased customer

satisfaction. This is made possible by the company's ability to make

informed decisions in real time.

Overall, Industry 4.0's real-time data and better connections

make it easier for Toyota to see and handle its many production

processes. It helps businesses make smart decisions, avoid problems

with their inventory, find and fix bottlenecks, optimize their

production plans, and get the most out of their work. By using this

technology, Toyota is able to run its business more efficiently, cut

down on waste, and get things to its customers faster(M.

Ghouat,2019).

2.4 Continuous improvement and the Kaizen culture

The just-in-time (JIT) method used by Toyota in Industry 4.0 is based

on continuous improvement and the Kaizen culture. Continuous

growth means always looking for ways to make things better, even

if it's just by making small changes. Kaizen is a Japanese word that

means "change for the better" and refers to the idea that you should

always try to get better. In Industry 4.0, Toyota can use new tools

to gather a lot of information. This information helps them figure out

how to improve their methods and get rid of waste.

7
 Toyota focuses on the skills and knowledge of its employees to

make improvements. They think that the people who work on the

production line know the most about how things work. Employees

are asked to share ideas and tips for making things better. Toyota

cares about what they have to say and gives them the freedom to

make small changes to improve processes and get rid of waste.

In Industry 4.0, technology is a key part of making sure that

things are always getting better. Sensors, robotics, and other

advanced technologies collect a huge amount of data that can be

used to learn important things. With the help of technology, Toyota

can figure out where specific changes can be made to improve

efficiency and streamline processes.

Both the culture of continuous growth and the Kaizen

philosophy are ongoing. Toyota is able to improve productivity, cut

down on waste, and react quickly to customer needs because they

keep improving and optimizing their JIT practices. This way of

thinking helps them stay ahead in the manufacturing industry, which

is very competitive, adapt to changing market conditions, and keep

their name for excellence.

In short, continuous improvement and the Kaizen culture in

Toyota's JIT system in Industry 4.0 involve collecting and analyzing

8
data, involving workers in the process of improvement, making use

of technology, and staying committed to making processes better

over time. By embracing this mindset, Toyota can make small but

important changes that improve efficiency, productivity, and

customer satisfaction in a big way (PARASCHIVESCU, 2015)

9
3.0 Benefits

3.1 Lower inventory carrying costs

For Toyota Motor Corporation, the benefits of adopting the JIT

inventory system, such as decreased inventory carrying costs

(Banton, 2023), are extremely important in the IR 4.0 era, which is

characterized by the integration of cutting-edge technology into

production processes. Despite technological developments, JIT is still

a key component of Toyota’s operational excellence. The

development of IR 4.0 technology has made lower inventory carrying

costs even more feasible and beneficial.

In the IR 4.0 era, real-time demand forecasting is essential to

inventory management because it makes use of cutting-edge

technology and data analytics to deliver precise and current insights

into customer demand. Real-time demand forecasting helps Toyota

precisely match output to current market demands, which lowers the

cost of carrying inventory. Toyota can collect and process enormous

volumes of data in real time due to IR 4.0 technologies such as

artificial intelligence, machine learning and big data analytics. This

comprises the orders placed by customers, market trends, previous

sales information and even outside variables like climatic variations

or economic indicators (Henderson, 2023). Toyota benefits from

10
avoiding overproduction and excessive storing by lowering the cost

of storing, obsolescence and depreciation for its inventory. Toyota

can effectively manage resources, respond swiftly to market swings

and optimize production levels by precisely forecasting customer

demand in real time. This boosts operational efficiency and lowers

costs.

3.2 Increase efficiency

Another key benefit of adopting the JIT system for Toyota is a

substantial increase in operational efficiency (Jenkins, 2022). JIT

helps Toyota to optimize its production processes, simplify workflows

and minimize waste, leading to higher efficiency with the use of

cutting-edge technology and data-driven insights. Toyota is capable

of reaching greater levels of efficiency due to the incorporation of IR

4.0 technology including automation, robots, artificial intelligence

(AI) and data analytics.

Toyota can optimize processes and decrease manual

interventions through the use of automation and robots, which leads

to shorter cycle times and higher production. Automated systems can

carry out repeated activities precisely, lowering the possibility of

mistakes and increasing total process effectiveness. Digital

technologies also make it possible for seamless data interchange and

11
communication to take place between various manufacturing stages,

resulting in synchronized and efficient operations. Real-time data

collecting and analysis made possible by IR 4.0 technology also

enables Toyota to identify inefficiencies, bottlenecks and potential

areas for development. Toyota can successfully use lean principles

by utilizing data-driven insights to improve process flows, eliminate

non-value-added activities and streamline operations. By

streamlined processes, Toyota can improve productivity, lower

manufacturing lead times, improve resource utilization and reach

higher levels of efficiency.

3.3 Decrease waste

On top of that, JIT is a system that ensures materials are only

produced or delivered when they are needed. By utilizing the JIT

system, decreasing waste from the excessive stocks is one of the

benefits that can be obtained by Toyota. JIT helps Toyota to reduce

waste by only receiving the particular goods when the goods are

needed especially for production activities which will improve

productivity of the company. Toyota adopts the concept of "what is

needed", when it is needed, and in the “amount needed" in order to

produce high-quality goods effectively and deliver vehicles purchased

by the clients as soon as possible. For example, when the vehicles’

12
demand has been taken, a production command has been sent to

starting point of the vehicle manufacturing line as soon as possible.

Then, the assembly line has to be supplied with a sufficient amount

of every component that are needed in order for any sort of

purchased vehicle to be assembled.

As a result, Toyota’s earnings can be boosted by minimizing waste

because money can be saved rather than used to pay the production

cost such as material, labor and overhead costs. In addition, Toyota

may enhance the environmental performance by lowering the waste,

in compliance with the environmental standards which will improve

the relationship between seller and customers, also the stakeholders.

Hence, reducing waste helps Toyota in creating a positive and

healthier workplace. Thus enhanced the employee morale and

productivity.

3.4 Improve storage space usage

Furthermore, the implementation of the JIT system in Toyota can

improve storage space usage. This allows the area that was utilized

for storing goods to be utilized for other profitable applications. By

using JIT, Toyota gains a faster turnover of inventory which indicates

that only fewer spaces of storage are needed for storing goods. Due

to that, Toyota enjoyed the rent savings as there are only fewer

13
spaces for storage that have to be rented. As an example, Toyota

was able to minimize the space of its storage areas by 50% by

implementing the JIT system. They managed to clear up space on

the manufacturing premises, allowing them to boost capacity for

production and decrease the duration of time that takes in

transferring materials around the facility leading to improved

efficiency.

14
4.0 Challenges of implementing JIT in industry 4.0 era for

Toyota Motor Corporation

Implementing Just-In-Time (JIT) in the Industry 4.0 era can

present several challenges for Toyota Motor Corporation. While JIT

has been a cornerstone of Toyota's production system for decades,

integrating it with the advancements of Industry 4.0 technologies can

bring both opportunities and complexities. Below are some

challenges Toyota may face in implementing JIT in Industry 4.0.

4.1 Data Integration

One of the pillars of Industry 4.0 is system or data integration,

which attempts to connect diverse sections of an industry in order to

extract data and information. It will be utilised to create continual

enhancement throughout the production process and related support

sectors. (Corp, 2022). Simply put, Industry 4.0 relies heavily on

interconnected systems, data analytics, and real-time information.

Integrating data from various sources, such as suppliers, production

lines, and customers, can be challenging. Toyota would need to

ensure seamless integration and connectivity between different

production systems, machinery, and suppliers to effectively

implement JIT. Achieving data interoperability between different

systems can be challenging as each system may use different data

15
formats, protocols, or communication standards, requiring significant

effort to establish compatibility and ensure smooth data flow. This

requires investments in infrastructure, standardized protocols, and

robust data management systems.

4.2 Cybersecurity

With Industry 4.0, sharing of data and intellectual property is

done across supply chains and various stakeholders. The consumers

and suppliers will be integrated by the systems. Data is distributed

all through the systems, which means a greater security scope which

increase the exposure to cyber threats (Ayuya, 2020). On the other

hand, JIT heavily relies on efficient supply chains to deliver

components and materials on-demand. However, this introduces

potential vulnerabilities, such as compromised suppliers or malicious

actors attempting to tamper with the supply chain. Ensuring the

security and integrity of supply chain processes, including secure

communication, authentication mechanisms, and regular audits, is

crucial.

As Toyota adopts connected devices, IoT sensors, and cloud

platforms, ensuring the security of data and systems becomes

paramount. Protecting against cyberattacks, data breaches, and

unauthorized access becomes a critical challenge for JIT

16
implementation in the Industry 4.0 context. Toyota would need to

implement stringent security measures to protect sensitive

production data and ensure the integrity and confidentiality of their

systems. This includes implementing firewalls, encryption, access

controls, and regular security audits.

4.3 Workforce Skills and Training

Industry 4.0 technologies demand new skill sets and expertise.

Toyota needs to invest in training and upskilling employees to adapt

to the changing production environment. Additionally, the company

would need to address any potential concerns or resistance from the

workforce during the transition. For example, adapting to Industry

4.0 and implementing JIT can significantly change the roles and

responsibilities of employees. Toyota Motor Corporation will need to

invest in change management initiatives to ensure the workforce

understands and embraces the new ways of working. This may

involve restructuring job roles, providing training programs, and

fostering a culture of adaptability and continuous learning (VIAR,

2018).

4.4 Sensitive to Any Kind of Error

In the usual automotive sector, each vehicle is assembled from

several thousand parts that have already undergone a number of

17
processes. This is known as mass production assembly. Therefore,

removing any barriers from these processes will maintain the

production system's correct operation. If any of these processes have

problems, the entire manufacturing system might become extremely

disorganized from (Mahajan Sahil, 2017).

The crucial step in just-in-time manufacturing is to accurately

determine the quantity and timing of the required output. Toyota

Production System does not follow the production schedule of a

certain product in an automobile plant, which is based on the many

parts schedules and instructions given to all the processes. In just-

in-time production, components are created in accordance with

numerous procedures in the precise quantities needed and according

to a precise schedule for assembling a vehicle, which is regarded as

the finished product.

Therefore, the implementation of Just-in-Time (JIT) in the

Toyota Motor Corporation within the context of Industry 4.0 is

sensitive to any error as if there is any error occurring during the

process, it will affect the progress such as taking longer time to finish

and incur additional costs to cover up the error.

18
5.0 References

(n.d.). ″ - Wiktionary. Retrieved June 17, 2023, from

https://www.globalfleet.com/en/manufacturers/global/article/

toyota-apply-artificial-intelligence-boost-efficiency-its-

factories?t%5B0%5D=Toyota&curl=1

HOW TO PREPARE YOUR WORKFORCE FOR INDUSTRY 4.0 | by

VIAR. (n.d.). Medium. Retrieved July 5, 2023, from

https://medium.com/@viarbox/how-to-prepare-your-

workforce-for-digitalization-and-industry-4-0-b92fb19b6047

Hussein, M., & Zayed, T. (2020, October 19). Critical factors for

successful implementation of just-in-time concept in modular

integrated construction: A systematic review and meta-

analysis. NCBI. Retrieved June 17, 2023, from

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7571479/

Industry 4.0 and Cybersecurity | Engineering Education (EngEd)

Program. (2020, September 22). Section.io. Retrieved July 5,

2023, from https://www.section.io/engineering-

education/industry-4.0-and-cybersecurity/

Just in Time. (n.d.). Toyota Motor Manufacturing (UK) Ltd.

Retrieved July 5, 2023, from

https://www.toyotauk.com/toyota-in-the-uk/how-we-

manufacture/just-in-time

19
Lavelle, E. (2023, January 20). Why Supplier Collaboration is the

Key to Success. Enable. Retrieved June 17, 2023, from

https://enable.com/blog/why-supplier-collaboration-is-the-

key-to-success

System Integration in Industry 4.0: A Competitive Advantage.

(n.d.). IndustriALL. Retrieved July 5, 2023, from

https://industriall.ai/blog/system-integration-in-industry-4-0-

a-competitive-advantage

Toyota JIT. (n.d.). https://global.toyota/en/company/vision-and-

philosophy/production-system/

Toyota Motor Corp. summary | Britannica. (n.d.). Encyclopedia

Britannica. Retrieved June 17, 2023, from

https://www.britannica.com/summary/Toyota-Motor-

Corporation

View of Impact of Industry 4.0 Concept on the Levers of Lean

Manufacturing Approach in Manufacturing Industries. (n.d.).

Penerbit UMP - Open Journal System. Retrieved July 5, 2023,

from

https://journal.ump.edu.my/ijame/article/view/2906/1129

Wann, B. (2022, November 12). The Toyota Production System: A

Lean Manufacturing Approach To Optimizing Your Business.

Benjamin Wann.com. Retrieved June 17, 2023, from

20
https://benjaminwann.com/blog/the-toyota-production-

system-a-lean-manufacturing-approach

21