Toyota

Apart from the KAIZEN approach being widely practiced in Japan, the one thing which, despite belonging to their culture, has given the Japanese manufactures a competitive edge is their methodology of  inviting open discussion from each n’ every employees of the company on regular basis.

Toyota has proved itself to be the world’s best not only in terms of automobiles manufacturing an d assembling but compared to all manufacturing concerns any where in the world. Achieving the status of the market leader wasn’t an easy task! Toyota (Japan) however made it possible. It was only through the participative approach employed by them as a basic requirement of their very corporate culture.

Toyota motor corporation (TMC) has been the world’s third largest automaker (2001) offering full range of models from mini-vehicles to large trucks. Global sales of its Toyota & Lexus brands, combined with those of Daihatsu and Hino, totaling 6.17 million units in the calendar year 2002 (Goldoftas & Levine, 1999).

On September 11, 2003 it was reported that Toyota gained a learned leading position on the ‘Dow Jones Sustainability Index (DJSI)’ in the 4 automobile sectors.

The growth that Toyota has been enjoying is not a one night growth but is part of a longer chain that stems out of their very cultural norms and values. Katsuaki Watanabe, the president of Toyota has much to be accredited with in regard of the Toyota’s recent overwhelming and world renowned growth factor. Toyota’s success is not only because eof any tools or equipment they use; but the encouragement by the there top management people such as Watanabe, who allow the employees to experiment and thus achieve a higher result regarding what they do in the company’s production process.

Be it as simple as installing a seat to as complex as designing and offering a new model to the production department. The Toyota Corporation has trusted its employees in delivering their best and they do it very-well. The time is a huge constraint in any organization especially regarding critical and/or strategic decisions regarding the future plans; competitors’ move etc. at Toyota, Watanabe like other of his predecessors has continued the practice even in the time of so much rapid advancements in the technology.

The Toyota employees had the solution to the time management too. Each employee knew very well about what he/she was responsible to do and how they did it. At the end of each day when they were gathered they were asked to go through what they did and how they think they can improve it. This reduces the time taken by mangers to keep wandering about which topic they would be covering and the can get the accurate information about each n’ every scenario of what has been going on.

In participative leadership, open and easy way communication is critical. Watanabe ensured that and at the production facilities every one assembles in the huge hall assigned for the assembly. This is a step to have a clear communication session between the top management and the other member of the organization.

The culture of sharing ideas and the social networking with friends and colleges is part of their practices and they are used to it.

Watanabe has been successful in delegating both pleasant and unpleasant task to the employees after giving them enough authority and responsibility regarding their tasks. He as the president, devised the plan of clarifying goal sto each and every employee and to provide support to them so that they can work at their best and update company with confidence on any improvements that they think are necessary, hence resulting in a cumulative positive effect on the overall performance of the company creating a synergy of individual efforts to achieve corporate objectives via allowing effective participation of employees so that they feel that they have a “say” in the organization’s decision making.

The participation of employees, at Toyota, along with Katsuaki Watanabe has yielded significant benefits.

References

Adler Paul S., Goldoftas Barbara & Levine David I. (1999) Flexibility Versus Efficiency? A Case Study of Model Changeovers in the Toyota Production System: Haas School of Business, University of California, Berkeley.

Major Competitors for TOYOTA Company Toyota Motor, among the world’s largest automotive manufacturers by auto sales, designs and manufactures a diverse product line-up that ranges from subcompacts to luxury and sports vehicles to SUVs, trucks, minivans, and buses. Its vehicles are produced either with combustion or hybrid engines, as with the Prius. Toyota’s subsidiaries also manufacture vehicles: Daihatsu Motor produces mini-vehicles, while Hino Motors produces trucks and buses. Additionally, Toyota makes automotive parts for its own use and for sale to others.

Popular models include the Camry, Corolla, Land Cruiser, and luxury Lexus line, as well as the Tundra truck. Ford Motor Company is the second-largest automobile company in the world. Ford’s main focus is automobiles; however, they also operate in Ford Credit and Hertz Corporation. Ford also has controlling interest in Mazda Motor Corporation. Ford was established June, 1903; in an old wagon factory in Detroit Michigan. In 1903, Ford began production on a two-cylinder, 8 horsepower called the Model A. They produced a total of 1,708 of these cars in their first year of operation.

Toyota Motor Corporation was Japan’s largest car company. Toyota ranked the world’s third largest by the year 2000. The company could produce near five million car units annually in the 1990s and controlled approximately 10 percent of the global market. Toyota was founded by a man named Kiichiro Toyoda in 1933. He did not produce his first car until 1935. By this time General Motors and Ford were already operating in Japan. Both companies are manufactures of cars which are sold in the United States. One is made in Japan and the other in the United States.

They are both a financially well because of the popularity of their cars. The accounting criteria’s that they both face are different because of the foreign rules and regulations. Both companies are faced with their own set of rules that have to be followed, but Toyota is faced with more issues since they sell their cars in the United States. Toyota’s recent string of troubles – from multiple recalls over unintended acceleration to a new report this morning that their popular Prius hybrid could have problems with its braking system — created a series of questions in the minds of their owners.

Where the public might have previously thought that recall problems were the bastion of the domestics and safety issues were permanently in our rear view mirrors after decades of innovation and pressure from the U. S. Department of Transportation, now it appears that there’s a new world order: could Toyota be, after all, mortal? Where some previously believed the company could do no wrong, there does now exist a void. A few competitors have a crystal clear idea of how to fill that void.

In the wake of the recent unintended acceleration recall, all manner of competitors have created specific sales campaigns to owners. General Motors, Ford, Chrysler and Hyundai have all stepped up to offer official rebates to current Toyota owners, while other brands such as Mazda are specifically targeting Toyota owners through some savvy keyword advertising on the web. All in all it spells out one message: Toyota owners might – for the first time in a long time – consider another brand and if they do, some manufacturers want it to be their brand and theirs alone.

One reasons that has exposed some automobile companies to severe vagaries of recession while sparing others is the existence of structural differences between the so called auto “transplants” or foreign auto mobile manufacturing in the United States and the major automobile companies incorporated and domiciled in the United States i. e. General Motors, Chrysler, Ford and the like.

The so called ‘transplants’ better represented by Toyota, Hyundai and the like are structured in such a way that they can access credit from their mother countries most of which for instance were not severely affected by the recent recession if compared with the United States (Ohno, 1988). Their deep pocket and this ready pool of credit from their mother countries made them less susceptible to the vagaries of financial meltdown. Another factor that has prejudiced some automakers while favoring others is what analysts have called bad practices of the Big Three United States automakers.

These ‘bad’ practices are the ones that are responsible for the big cost differentials that have existed for some time now between them and the ‘transplant’. Another tragedy that has benefited the transplants at the expense of the Big Three is the high prices of automobile fuels that have been occasioned by the recession (Ohno, 1988). In this regard the Big Three US automakers known for their SUVs and Pickup Trucks which normally consume more fuel have found themselves uncompetitive due to the avoidance of fuel guzzlers in the United States due to the high oil prices and reduced disposable income due to inflation.

Most of those who have avoided these fuel guzzlers have migrated to the cheaper and more fuel efficient car made from the so called transplant i. e. Toyota, Hyundai, et al. The labor costs have also overwhelmed the Big Three US automakers more than others from foreign countries manufacturing in the United States (McCracken, 2006). This is due to the fact that their workers are unionized and therefore able to press for high salaries while their non-unionized counterparts in the so called transplants do not have such powers (McCracken, 2006).

Importance of the New Product Development for Corporation In regard to Toyota’s New Product Development Process with the launch of the Prius The development of new product whether in form of new innovations, new applications or even completely new goods is a necessary component in business because it enhances the viability of the company. By developing new product the company is able to make a mark in the industry which is one of the best survival strategy that today’s companies have perfected in their bid to withstand cutthroat competition that characterize today’s business environment.

The importance of continuously and consistently developing new product in today’s business world is better captured in the statement “innovate or die” which has of late become a popular catchphrase adopted by both small and large corporate bodies in reference to increasingly knowledgeable consumer demand for the latest and finest products. One of the companies that have embraced the idea of developing new products in an effort to remain competitive while still providing their customers with the newest and finest goods in the respective market is Toyota Corporation.

Toyota which is the second largest automaker globally realizes that in order to maintain its brand visibility as a top automaker worldwide it has keep on innovating and coming up with new and more superior models (McCracken, 2006). All these Toyota models that have been launched in succession by Toyota Corporation are informed by this strategy. This strategy has been employed by Toyota for a long time now. However the most recent product of Toyota’s innovative product development is Toyota Prius. The development of Toyota Prius is in line with Toyota’s management desire to develop newer and more superior cars for this century.

The superiority of Prius as a new and different product from the other is better demonstrated by its superior features that include more spacious cabin space, relatively higher seat position, aerodynamic exterior, a 20km/little fuel economy, and a relatively small engine placed horizontally with a variable automatic transmission (McCracken, 2006). References Ohno, Taiichi, (1988). Toyota Production System: Beyond Large-Scale Production. New York: Productivity Press McCracken, Jeffrey, (2006). Detroit’s Symbol of Dysfunction: Paying Employees Not to Work. The wall street journal online. 06 March 2006

Bargaining power of buyer refers to the ability of individual customer to negotiate prices that extract profit from the seller. Buyers are more price sensitive when the product is undifferentiated and there are few switching costs. The buyer’s bargaining power is determined by the number of buyers. In automotive industry, consumers do not have much buying power as they ever purchase huge volumes of cars and switching cost are relatively low (Palepu, K G. et al. , 2007).

Raw materials and input-labor are needed to complete the finish product of the organization (Gomez-Mejia et al. , 2008). Suppliers are important to an organization as they can affect the cost of input. Greater dependence on particular supplier increase the power that supplier to impose terms on the buyer (Gomez-Mejia et al. , 2008). However, bargaining Power of suppliers in car industry is weak because they have large suppliers spread all over the world and cannot easily forward integrate.

Suppliers are extremely susceptible. If large suppliers raise prices, Toyota may suffer in their profitability. To stay competitive in this area, Toyota keeps a large database of small business suppliers in their operations. Through this database, Toyota puts an emphasis on using smaller businesses for suppliers in order to gain a competitive advantage. Substitutes are moderately strong due to different and less-expensive transportation facilities. The Hybrid Synergy Drive of Toyota is the threat of substitute products.

Nissan and Honda have developed the same technologies for their car models. However, lower cost may induce consumers to shift preferences from higher cost of vehicle to another lower cost transportation such as mass transit, motorcycle and public transportation (Gomez-Mejia et al. , 2008). The number of substitute product for car is limited because in low pressure on the manufacturers. Within in automobile industry, normal cars cannot substitute the luxury cars, and vice versa.

The major players of the American big three: GM, Ford, and Chrysler, while the Japanese big three: Toyota, Honda and Nissan had caused the rivalry of global automotive manufacturing industry much more intense. In automotive industry, it is less price-based competition, but more recently the competition has intensified – rebates, interest free loans and long-term warranties have helped to lure in customers, but they also put pressure on the profit margins for vehicle sales.

For example, Malaysia is offering RM5k discount for owners of cars that were more than 10 years old to buy new Proton or Perodua cars (The Star Online). Thus, it maybe will directly affect the sales of Toyota Car in Malaysia market. Generally, competitive rivalry will be high if there is just a little differentiation opportunities, the competitors are nearly the same with each other, and the competitors all have similar strategies (Henry, 2008). For example, in automobile industry, all companies make cars, trucks or SUVs.

So, the key to win and keep the customers is to understand their needs and wants for buying something better than competitors do. Business success built on cost leadership requires the business to be able to offer its product or service at lower price than its competitors with a good quality of the product (Pearce ll, J. ; Robinson, Jr. R. , 2009) and its lowest-cost base still allows it to earn a profits (Henry, 2008). Low-cost producers usually excel at cost reductions and efficiencies.

They maximize economies of scale, implement cost-cutting technologies, stress reduction in overhead and in administrative expenses, and use volume sales techniques to propel themselves up the earning curve (Pearce ll, J. ; Robinson, Jr. R. , 2009) and obtain the largest share of market so that its cost per unit is the lowest in the industry (Keegan, W. ; Green, M. , 2008). ; Toyota’s production system is reportedly the most efficient in the world. This efficiency gives Toyota a low cost position within the automobile industry because it has developed considerable skills in efficient supply chain management and low-cost assembly capabilities.

Toyota is constantly searching for new suppliers that can provide industry leadership on cost, quality and technology. However, the company will choose only those suppliers that are willing to establish long-term partnerships with Toyota and that have the ability to be successful in such relationship (The Boston Consulting Group) Now, Toyota earns more revenue than the three largest American auto producers, General Motors, Ford, and DaimlerChrylers (Henry, 2008).

A company achieved competitive advantage by seeking to differentiate the company’s product or service offering from rivals’ in a broad market is called differentiation (Keegan, W. & Green, M. , 2008). A differentiation strategy requires an industry to continuously invest in the creation of new products or add new features to existing products and the difference must be sufficiently exist in the mind of customers to the extent that they are willing to pay a premium price and may not be a true distinction from competitive products (Henry, 2008).

Differentiation provides a defence against competitive rivalry that helps to protect the organization from price competition. > Toyota has succeeded in combining aspects of styling and image, performance economy and reliability with a very efficient, local supply chain (Doole, I & Lowe, R. , 2007). Toyota has differentiated its cars from those of rivals on the basis of superior design and quality. Toyota has this superiority, brand and marketing skills to use a premium pricing policy charge for many of its popular models.

For example: Toyota’s Lexus- the pursuit of perfection with luxury brand. (Pearce ll, J. ; Robinson, Jr. R. , 2009). Thus Toyota seems to be simultaneously pursuing both a low cost and a differentiated business level strategy. By stressing the attribute above other product qualities, the firm attempts to build customer loyalty. Company translates such loyalty into a firm’s ability to charge a premium price for its product. For example: another automobile industry, Porsche automobiles (Pearce ll, J. & Robinson, Jr. R. , 2009).

1) How does the andon procedure work and what are its fundamental aspects? How much does it cost to stop the line? What are the benefits of stopping the line? The andon procedure is adopted by Toyota Motor Manufacturing to ensure quality of their products. It involves the pulling of the andon cord whenever production at a work station is unable to be completed within the cycle time, or whenever any problem is faced. Pulling the andon cord will alert the team leader to the station. If the problem can be corrected immediately, assembly is resumed by pulling the andon cord again.

However, if the team leader is unable to solve the problem, the line is stopped. With this process, Toyota is able to manufacture quality products and prevent defective products from being transferred on to the next station. This is in line with Toyota’s principle of jidoka where problems are instantly detected and production is stopped whenever a problem is detected. However, stopping the line will reduce the flow time of the car assembly and flow rate of the production. As more time is required to produce the cars, worker overtime costs will be incurred.

According to the case, line stoppages caused a shortfall of 45 cars per shift. These cars could have been sold in the market instead. Thus, line stoppages caused lost revenue (opportunity cost) for these 45 cars. In analyzing the costs for stopping the line, we assume that hourly wage per team leader is set at a 6. 5% premium. We assume 769 team members are spread equally between the two shifts. We assume that each worker causes an average of 1 line stop per shift. The number of shortfalls in a shift is based on that in April 1992 i. e. 45 cars.

The breakdown of costs incurred to stop the line is as follows: Hourly Wage per Team MemberHourly Wage per Team Leader (6. 5% premium)Overwage rate per Team MemberOvertime Wage Rate per Team Leader 1718. 10525. 527. 1575 Number of Shortfalls per Shift45 Number of Shifts2 Total Team Members769 No. of Team Members per Shift (769/2)384 Number of Team Leaders per Shift102 Number of Stops per Worker per Shift1 Number of Stops per Shift384 Overtime per Car (57s/3600)hrs0. 0158333 Total Overtime Cost per Shift ($)8950. 4713 Overtime Cost per Stop ($)23. 308519 Lost Revenue per Stop (0. 17 x 18,500 x 45)/384368. 5469 Tota Cost Incurred per Stop ($)391. 86 Benefits of stopping the line is to reduce wastage as defects are detected early and problems can be solved earlier before the defect is passed on to the next station. 2) What are the underlying causes of the problems facing Doug Friesen? The main problem faced is a decrease in run ratio, which measured the numbers of cars actually assembled in proportion to the number of cars that could have been assembled with no line stoppages, from 95% to 85%. This drop also led to a shortfall of 45 cars per shift, which had to be made up with overtime.

The underlying causes are as follow: •The combination of seats, which resulted from by the variety of Toyota Camry, has increased the probability of defects or human error. •Problems are not solved at the point where the defect is detected and the defective cars remained in the assembly line until they are moved to the Code 1 clinic area for further inspection and quality control. Solving problems at the end of the assembly line could be more difficult or require more time than at the spot where the problem was first detected.

This is because the car at the end of the assembly line has already been completely assembled thus, making amendments to specific components could be more challenging. •There is a long waiting time for the delivery of replacement seats from KFS to TMM. This led to an increase in inventory in the overflow parking area where the cars waited for KFS’ special delivery. 3) How, if at all, does the current routine for handling defective seats deviate from the principles of the Toyota Production System (TPS)? The current routine deviates from the TPS principles of Jidoka and Just-in-Time (JIT) production.

JIT Principle TPSCurrent Routine (deviation) Produces only what was needed, how much was needed, and only when it was needed. Any deviation from true production needs was condemned as waste. Defective cars remain in inventory and some have to wait for replacement seats to be delivered. Cars are not produced at maximum capacity. Thus, consumer demand is not met on time. Jidoka Principle TPSCurrent Routine (deviation) Make any production problems instantly self-evident and stop producing whenever the problem was detected.

Insisted on building in quality in the production process and condemned any deviation from value-addition as waste. Does not follow the jidoka principle – instead of stopping production and waiting for the new seat to arrive then fixing the seat before production restarts, Toyota continues with production and only fixes the seats after production ends 4) As Doug Friesen, what would you do to address the seat problem? Where would you focus your attention and solution efforts? What options exist? What would you recommend? Why? There are several solutions to address the seat problem in the manufacturing process.

These solutions are non-exclusive and could be implemented together. Solution 1: Decrease the error caused by variability in car seat styles. This can be done by investing in training staff so that they will be proficient in handling the variety of seat styles for respective cars and reduce the defect rate caused by human error. Another way is to assemble the cars in batches based on its respective seat styles as this method of production decreases the chance of human error as well since production will be more uniform. However, batching violates Toyota’s ‘Heijunka’ principle.

Solution 2: Toyota could also consider the option of repairing the damaged seat immediately rather than allowing it to through the entire process first and congregating at the end of the line; in other words, to put the practice of jidoka into play. All staff involved in the production line will then have to be more critical in ensuring the best quality of the seats, and stop the production line once a defect is realized. However, repair staff would need to be well equipped to handle the situation. Furthermore, this solution requires the production line to stop, thus incurring costs.

Solution 3: Switch to another seat supplier or source for additional suppliers to ease the current load on KFS since the current supplier delivers poor quality of seats which causes the problem in the manufacturing process. However, having more than 1 supplier may result in differences across the finished goods as it is difficult for two suppliers to provide identical seats. Solution 4: Stock safety inventory to use it as a buffer for the defective seats so as to decrease the wait time required to deliver replacement seats.

However, having excess seat inventory will incur inventory cost. It is also against the JIT principal which hallmarks Toyota. Solution 5: Seats can be redesign such as changing plastic hooks back to metal to reduce the probability of one of the problems for defective seats, which is a broken hook. The focus of the solution should be aimed at improving the internal process problem which is decreasing the human error caused by variability of car seat style and also improving external process problem which is the quality of the car seats supplier.

As show in Exhibit 8, the main cause of defective seats comes from the poor quality of seats delivered by the supplier. Therefore it is vital that we would firstly have to improve the delivered seats and Toyota can do so by bringing up this issue to the management at KFS. Toyota must demand for better quality products and if the problem continues due to poor quality of seats, Toyota should then source for additional suppliers to cover up for the lack of quality sets supplied by KFS.

Once the external problem has been handled, Toyota must look at ways to improve the capabilities of its production line staff. By training them to handle the various seat styles for respective cars, it increases the skill level of the workers and hence decreases the probability of making an error. However, Toyota will incur training cost but these costs will reflect savings in the long run if its staff would make less errors hence improving the run ratio of the production line.

Introduction

Business process reengineering concepts comes from management theories and introduce in 18th century. The purpose of business process reengineering is to make the business in best condition. Frederick Taylor says in (1880s) the companies use the reengineering process to make the business in best position and to achieve the company goals. Business process reengineering means not only change but structural change. What kind of structural change in the organization, managing system, employee responsibilities, reward system, and information technology. Many organizations want to change the management of the organization but they not identified which part of work is to be changed. But the business process of reengineering (BPR) is the concept of management and that has been formed by practical experience. (BPR) is not only impact inside the organization but also the external supplier and customer as well. (BPR) is help to increase the organization financial report and customer satisfaction and also find out the way how to create the high productivity with the short amount. The key driver of the (BPR) is cost reduction, high speed, and quality. Information technology is a technology which use to store, determine and process the data which use in the specific organizations to examine the data and processed the data. And through the information we improve our knowledge and know how to do the work. The information system develops a strategic approach to change the process. For example through reengineering process we provide a wide range of company product online the customers are buying our product with the help of information system. So that is not possible without information system. Information technology is the component of the (BPR) and promotes the companies process. say reengineering about innovation. It is help to solve the company entire objectives.

Role of IS/IT in business process reengineering

BPR is the much biggest issue for IS executive in 1990s. BPR shows the power of the information system and information technology to the decision making because through the information system and information technology the BPR reach the effective position. So the BPR success is based on information system and information technology. The role of IS in the organization is to make the effective strategy according to the business requirement. No other systems change the business such as the information system because the information system put right system on right place. The information is the key of an organization the IS measure the process and performance of an organization. The good information makes the better position of an organization. By using the customer strategy the IS gets the information out of the organization how the product of the company is running through the market and implement the IS to reduce the time to market. The information system has must be able to vision the information technology in the organization future. BPR is not adopting the new system but also create those system they effect the whole organization. Firstly focus on the business process not on information and then apply the IT tools on those processes. To adopting these steps the IS expert provide the understanding of the information and technology in the business processes. The IS professional have play an important role in the business process reengineering. For example when the California state affiliate of American Automobile Association (CASS) stated the reengineering process the internal IS system was very bad in initial stage they cannot deliver company product on time. The information technology system is good but the IS system is not good. So the CASS identified the problem and solved it. When they removed the IS department error the company come on boom stage. So the result is that when your IS/IT fulfill the requirement then the company comes to upward. The IS/IT are the key of business process reengineering. When the IS and IT department are work effectively then the BPR make the better company position.

The relationship between IS/IT in the BPR is to change the process and identifying, evaluating, and implementing the business strategies. If the business is in dog situation the role of BPR is to remove the barrier. The BPR has overcome on these barrier through IS/IT because if the IS system is working bad than the business goes to downwards so the IS system is effective than the business in good position. How we can make the IS/IT system better. The delivery system of the company is based on the IS system so when the company collect the information form there customer what they want and than the company makes the strategy according to the customer requirement. So the company does all the process under the IS system we can say these are all the component of the IS system. IS system are supporting to regenerate the business process and also analyze the existing assets. A large number of manager are adopt the business process reengineering under the IS/IT system to getting the competitive advantages and also provide effective service to their customers. Willcocks says the IS/IT is the most critical factors of the business process reengineering. These systems are cross the different stages and than identifying the problem and how the previous system works with the project and also collect the information for the reengineering process.

Implementation of IS/IT on Toyota under the BPR

The information system of the company is been evaluated by SWOT analysis. The Toyota Company achieved the goals globally by using the information system. The Toyota company reach to there customer by using the different website worldwide. These are website based on IS system the IS system work effectively that why Toyota is the world biggest company. For example Toyota reach to there customer through the website there are many website and system in each world regions, north America, Europe etc. The IS department firstly gather the information from there customer what type of the goods they needed than according to the customer requirement the Toyota produce the goods. The Toyota company has develop new opportunity which is transport system and the company develop this system through the IS system because the information system is one of the best key to develop that system. Toyota collect the information from there customer and the other companies as well. That is the marvelous opportunity for the Toyota Company because the Toyota increase there customer on the base of previous customer. The IS system and networking is the key which helps the Toyota Company success. The Toyota Company have no off competitors like as Honda, Ford, Chevrolet, etc. In this competition the Toyota Company is on boom stage because effective IS system. One of the best of the IS system is the Toyota new Hybrid Synergy drive. When the automotive industry is fall in high gasoline crude oil costs, the Toyota develop a new computerized engine system which is HSD. The Toyota introduce that system in there new models cars like Camry, prius which is available in the market. Toyota makes that possible by using the Porters models for the threat of same product. Some other companies copied the Toyota HSD and entered in the market like Nissan, Honda introduce similar technology in there sedan model but the Toyota is super hot in the market because the Nissan and Honda have not good impact in the market yet. So the Toyota has highest impact in the market through IS system.

Toyota Company has got profit on he behalf of Porters five forces because the companies share increase through the porter’s model. By using the HSD the company gets competitive advantages. Toyota HSD has sufficiently maintained their advantages and covers the market. These are all factor makes the Toyota success and gain the competitive advantages by using the information system. Because the information system is major key of the success so the Toyota maintains his information system and get the success. In 2008 the Toyota introduce service the name of that is TOYOTA METAPOLIS, on that service the Toyota created 3-d cars to inspire the people. In 2002 the Toyota introduce a new service in Japan the name of G-BOOK telematics service and in August 2005 Toyota introduce G-Link service for Lexus. And also introduce the theft detection service, tracking service for the G-BOOK and G-link user that are using there vehicles. So the Toyota has done all these step with the help of information technology when the IT system is doing excellent job than the company did not went to downward. In 2007 Toyota bring the mX system in the market for there user and that service is use for getting direction that is the world first technology for auto update the map. In March 2004 the Toyota introduce the CRM (customer relationship management) the information technology develop service to their customer such as provide the information of new vehicles, time for the maintain the vehicle, etc. when the company provide these services to their customer the customer touch with the company gets the more customer on the behalf of previous customers satisfaction. So that is possible when the information technology work effectively.

Toyota IT system play very important role in the success of the company. Toyota currently builds up CRM in countries including China, Thailand and Australia where the company want to increase the market share. In 1980s the carmaker was introduce aided design system for designing the part on computer not on paper. Toyota adopt that system the designer of new CAD system firstly asked where we use that particular system where we need that and also what are the requirement, what are the options the designer ask such question for the effective use of the information technology. For example when they analyze the die stamp that is out of parts the die stamp not fulfills the model requirement and than they design best dies on the computer. When the die design completes the Toyota use simple solution take the basic point which is shown on the color diagram. The die designer worked on experience based examined the diagram and made the particular parts. As their competitors adopt that CAD system Toyota maintain it through their engineers and suppliers. Toyota updates that system day by day and its work effectively. After two year the Toyota shifts that system into the CATIA (Computer-Aided Three Dimensional Interactive Application) a world class system. Toyota was very slow implementing that system into the development process, because at the time when the Toyota implement that system the Ford automaker quickly adopt that system and introduced into the market but Ford industry have not effective CATIA system and spending million to adopt that system and confuse the people.

After the Ford system failure that the Toyota introduces the CATIA system in the market and gets boots sale from the market, because Toyota put lot of attention to make that system. So the result is that the Toyota information technology system works very well if Toyota has not effective IT system than the company could not come to that point or stage. Toyota Company continuously work on CATIA system by using the effective software and effective engineers when the Toyota introduced the first CAS software in 1980s and within the next 12 months Toyota developed new vehicle. That are all possible when your have advance IT system by using the IT Toyota been successful form 1980s. For example the instruments are done digitally in three dimensions. Toyota used this method in the vehicle design because the engineers kept the list of good and bad characteristics of design and these aspects saved electronically. There is also keeping the data in the assembly plant for the designing purpose. Through these design the engineers check the past problem and assembled the perfect car. So the IT helps to assemble the actual auto vehicle without the errors. So the result is that the Toyota did not adopt the weak and poor development process and also use the most effective IT system. Toyota will take the effective development system which is based on trained engineers and leaders and surgically inserted information technology. Today Toyota is alive on the behalf of IS/IT system because these are the basic keys of the Toyota company success.

Recommendation

Toyota auto vehicle share the information with the other companies such as Ford, Nissan etc. That’s not good for Toyota company success when companies share the information with the other companies the companies has to use that information and developed new vehicle and introduced into the market. So that is the drawback of the Toyota Company to share the information with the others. This is the most difficult process to collect the information form the customer or other people what they want. After that the company put that information.

Many companies have tried to understand and replicate the production process at the various Toyota facilities, but until you stop just looking at the surface and take a deeper look you won’t fully understand all the positive aspects to the production line.

Toyota is known for their distinctive practices and precision work throughout the years and their amazing use of internal benchmarking to help the company continue to move forward. Because of the positives within the company’s dynamics Toyota has comfortably been on top of other companies in their industry.Toyota is not shy when it comes to show and giving ideas to other manufacturers to improve their own processes, but very few actually accomplish the success that Toyota has. Not because it is too trying to do, but because the manufacturers that come into to evaluate confuse the tools and practices they see on their plant visits with the system itself. The process at Toyota isn’t a process that you can simply look at and understand; you truly have to get a closer look and really dissect it.A study was done to understand the process completely including service functions like equipment, maintenance, workers’ training and supervision. All of these sections were taken into a count because the service functions help and are responsible for the whole process moving the way that it does.

Toyota, like other manufacturers has many specifications set to create everything correctly, but only thing that Toyota does to get those specifications where they need to be is using a hypothesis method. It is a rigorous problem solving method, but it has shown to be very beneficial to the company.The article summaries the four rules that they believe to underlie the Toyota production system. Rule 1: How People Work; all work shall be highly specified as to content, sequence, timing and outcome. This rule is implemented well because it doesn’t just target senior workers or supervisors; it is set in place to be accomplished by all workers no matter the hierarchical role. Although this may seem obvious that a manufacturer would complete every task this way it actually is the case at most companies.Other companies are completing the tasks presented, but they aren’t following through and making as precise measurement and protocols as Toyota does.

For each ‘station’ there are timings to when things should be done to complete in a timely manner while making sure things are done correctly. The detailed step through every process keeps Toyota moving smoothly and efficiently. Rule 2: How people Connect; every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses.Toyota has created outstanding relationships between each person and the individual who is responsible for providing that person with each specific good or service. An outcome to this is that there is no discrepancy with the timing of shipment and who is making the shipments. This rule extends to the consumer as well. For instance if something is wrong with the product there is no problem figuring out who will assist with the problem that arose.

The number of workers within a team is set out based on the number of problems that may occur during the process.Toyota exemplifies a direct and effective method through each step of the development process. It is designed that people are suppose to respond within a certain time frame and with this provision it doesn’t allow for errors to occur and if they do arise then it will be dealt with timely manner. Toyota stresses helping others through the process so it is everyone’s responsibility for things to be completed on time and with no errors. If help is needed, help must be received in the time it would to complete the task that is in need of some help.By doing this problems are hidden or pushed to the side, but rather called attention to and fixed as soon as possible. Rule 3: How the Production Line is Constructed; the pathway for every product and service must be simple and direct.

The production line links each person who contributes to the production and delivery of the product, form the Toyota factory. This rule simply means that the process isn’t just moved from person to person, but more specific. The job is moved from specific person to specific person to make it more efficient and reliable.When this is applied to every ‘station’ of the development process there is less of a chance of error or variance among the workers. This doesn’t slow down the process by any means; instead it actually speeds up the process because the process doesn’t need to be stopped for fixing or maintenance. Within Toyota’s plants the pathway for assistance is three, four or even five links long, which connects the workers to the floor managers. In the past Toyota experimented with the method of just moving the process to the next available person, but this system showed to not benefit Toyota’s production line.

When Toyota implemented the idea of moving it to a specified person rather than just the next person the process was more productive and less likely to cause error. Rule 4: How to Improve; any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization. Toyota really stress the fact that training is necessary to complete any task, not just by senior employees, but an actual training clinic. In the Toyota plant for example workers were adjusting and perfecting their problem solving skills by redesigning their own work.Managers were training the employees to frame the problem better and to formulate and test a hypothesis, which is an example of the scientific method. If the employees in the company think that the process could be more productive if they were to change something in the process then it is expected, by the managers to explain the process change and the logic behind why it would work better than the process before. Frontline workers make the improvements to their own jobs, and their supervisors provide direction and assistance as teachers.

This process remains the same even at higher levels and more complex jobs within the company. This means that the learning and the problem solving done takes place in all areas of the company not just one. When looking at Toyota’s production system you can see a direct correlation between their process and a lean development process. A lean development process is about doing more with less and doing it with speed and right the first time around. This is exactly what Toyota exemplifies.There are four distinct components to lean processing; customer relationships, production development, order fulfillment and supply chain. Those four components coincide with the four rules set out in the article.

Toyota completely uses the less is more policy by using less time, inventory, space, people and money as stated in lean processing. Because the line runs smoothly at Toyota it takes less time to actually assemble products and this is directly related to the specifications set out at each ‘station’ and the team work that is involved with finishing the product.Toyota saves a lot of money as well because they aren’t going back and fixing the process repeatedly and the chances of errors are rare. At Toyota they also try to have a limited number of inventories because inventory costs a lot of money for a company. Instead of having inventory Toyota uses the just in time method. This method is used to make products to order right when the customer needs the product. Overall the process at Toyota is efficient and hard to immolate.

Toyota is a prime example of a productive lean process that has shown to help a company and put the company on top in the industry.