Comparing Toyotas Methods Of Production To Other Models Accounting Essay

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Toyota is one of the world largest automobile industry in the world. The major goals of Toyota Motor Company is to create and provide innovative, safe and outstanding quality products and services that fulfils a wide range of customers' demands to facilitates the people over the globe.

Toyota has specific goals and objectives which have been identified as the aims of the company in keeping with its beliefs on its prior sales and financial success. The major company objectives are (1) To increase corporate value as priority of top management(2) Continually introduce and produce products that fulfils customers' requirements and(3) To become more competitive global company.

These desires translate into increasing sales and profit, maintaining high quality and continuing expansion.

(www.associatedcontent.com)

Toyota Production System (TPS)

The Toyota Production System is a well integrated socio technical system developed by Toyota which comprises its management philosophy and practises.Toyota Production system organizes manufacturing and logistics for automobile manufacturer based on interaction with consumers and suppliers. TPS is a main precursor of 'Lean manufacturing'.

(http://en.wikipedia.org)

Lean Manufacturing

Lean manufacturing often referred as 'Lean' is a production practice that considers the expenditure of resources for any goals other than creation of value for the end customer to be wasteful and thus a target for elimination.

Lean manufacturing is a generic process management philosophy derived from Toyota Production System (TPS).It is known for its focus on reduction of the orginal toyota seven wastes to improve overall customer value.

(http://en.wikipedia.org)

Just In Time (JIT)

The concept of Just In Time evolved after a phrase originated at Toyota company recommends designing and controlling the manufacturing processes such that the required items are produced in the quantity needed when they are required. Toyota Lean Production

recommends that production should be triggerd by demand, suggesting the use of a pull system for production control. Specially when pull production control is in effect , the production schedule for the final phase of manufacturing process is passed through all phases of manufacturing operations.The aim of production smoothing termed as Heijunka or level scheduling is to decline variability of production rate at the last stage of production operations so as to build the stable a stable demand stream for other manufacturing operations

at the preceding phases.

(Walleigh 1986, Coleman and Vaghefi 1994,Monden 1998).

Importance in Current Business Environment

The new JIT in global business deployment aims to realize customer and employee satisfaction through production with high quality assurance and shortening of production making time.In implementing the New JIT for uniform quality worldwide and production at optimal locations ,renewal of production management systems appropriate for digitilized production is a fundamental need. One aim to strengthen process capability maintenance and improvement by establishing an intelligent quality control system. Secondly is to establish a highly reliable production system that ensures better quality.Thirdly is to boost intelligent productivity by reforming the work environment. Finally to build intelligent operators and to establish an intelligent production operating system. The need of including and combining these four aims with strategic application of TPS in a view global production and clarified the advanced TPS as the global technology and management model.

(HIROHISA , KAKURO,2006,pg128)

ANALYSIS

Competitive Advantages

Toyota Corporate Philosophy

The Japanese most renowned car makers Toyota despite of its publicised problems , have sustained and increase their global competitive advantage.Toyota competitive advantage is based on its corporate philosophy known as Toyota Production System.

Supply chain management

Toyota's president,Toyoda Kichiro and later Ohno Taiichi the real developer of Toyota Production system (TPS) developed a n extremely efficient production system called as 'Lean production' .Toyoda's method based on Henry Ford several years earlier despite toyota's

approach to both product making and development is much more customer-friendly and market driven.

(http://sysdoc.doors.ch/TOYOTA,By M. Reza Vaghefi)

The Toyota Way

The Toyota Corporation has designed their managerial fundamental known as The Toyota Way. The Toyota Way consist of 14 principles that are considered the basis on which management decisions are made.

TPS and The Toyota Way as competitive advantage

Toyota gain competitive advantage by its Toyota Production System and Toyota way of thinking philosophies. The competitive advantage was gained through a combination of human resource management policies and extremely efficient network of suppliers and manufacturers of the machines and various items used for production.

Employee empowerment

Toyota is well known for its company culture of people empowerment. By analyzing the following figures you can judge what is significane of employee empowerment in Toyota. in an average year more than 700,000 suggestions for improvement were submitted by toyota's employees, which means an average of 10 improvement suggestions per employee per year.Most remarkable is that over 99% suggestions were in force.

Employee Morale and Loyalty

Toyota plays a significant role for its employee satisfaction on job in order to gain their morale and loyalty. Toyota knows very well that when job satisfaction is high there is a greater chances that reliable and high quality products will be manufactures at a reasonable price. everybody knows that Toyota is known for its production of car. but it is their human resource management ways that have capture interests of manufacturers around the globe.

Seven Principles of the Toyota Production System

1. Reduce setup times .

Toyota made responsible their employees of their setup time ultimately reducing the wastefulness of the process that finally add value to buyers and takes up valuable in process labor time and equipment.

2. Small-lot production.

It focuses on producing a variety of products in smaller quantities rather than making them in huge numbers.

3. Employee involvement and empowerment

Employee are split into groups and teams and even those in supervisor positions work with other employee on the production line as part of the team.

4. Quality at the source

The defects of products are pin pointed and resolved as soon as they occur or at the source.

5. Equipment maintenance

Operations of the equipment are assigned to take care of their maintenance since these should be the individuals who knows equipment very well.

6. Pull production

The Just In Time (JIT) is implemented at every stage of the process is based on demand for materials from the immediate next stage.

7. Supplier involvement

Suppliers are treated as partners and are also given awareness of TPS techniques.

(http://hubpages.com/)

Disadvantages:

Toyota Lost Buyers Focus and Satisfaction

The key points which is neglected in Toyota's consumers satisfaction plan include:

Neglecting focus on consumer complaints about various defects in cars on road.Moreover it appears to be an attitude of keeping issues down and blaming consumers.

Failure to empathize with consumers and let them know that consumers' safety is first priority of toyota.

Toyota came up with no action plan to fix problems of the customers who are affected by defects including faulty brakes and acceleration . The action is neither available nor coming .The feedback take it to the dealer is meaningless for the customer when the suppliers have no information or remedy for the problem.

It is infect a failure of Toyota's risk management system to deal with current recalls and make some action plan to cope with these sort of situations

(www.satisfactionsecrets.com)

RECOMMENDATIONS:

Suggestions:

Toyota has to give main priority to consumer focus and satisfaction, because customer satisfaction level is the key for success.This can be achieved by fixing customer problems related to toyota products promptly. In the current situation there are lot of complaints about the after sales services of toyota suppliers.

In the current situation there is lack of effective business strategy adopted the managers to cope with toyota's issues.Toyota has to formulate and implement an effiecient Business operation strategy which may include :

Business Operations Recommendations

Toyota has to identify and address the issues of its overstretched supply chain by monitoring its Supply chain standard and efficiency which consist of OEM, Tier 1,Tier2 and Tier3 suppliers. Normally there are no issues between OEM and Tier 1 but there are various problems between Tier 2 and Tier 3 suppliers due to their inefficiency. Toyota must have to cope the quality measures taken by its Tier 2 and Tier 3 supplier.

It seems that Original equipment manufacturers (OEM) and Tier 1 suppliers perform smoothly. There is a lack of monitoring and speed of communication between Tier 2 and Tier 3 suppliers due to which problems occur.

Toyota must ensure the transparency of Tier 2 and Tier 3 suppliers and enhance and monitor its communication system in order to confirm that defected product does not go to the customers.

(www.economist.com)

CONCLUSIONS:

The key focus of Toyota Motor Corporation is to build and provide innovative, safe and superior quality products and services that fulfils wide range of demands of consumers. The main aims and objectives of toyota are:

Toyota Production System is focused on lean principles whose main emphasis is customer regular improvement and quality through waste reduction and tightly integrated processes as a part of lean value chain.

The Just In Time term evolved after a phrase originated at Toyota recommends designing and controlling the manufacturing processes in a way that required items are produced in the quantity needed when they are required.

Toyota corporation has designed their managerial fundamental known as 'The Toyota Way'. The Toyota way consist of fourteen principles that are considered the basis on which management decisions are made.Toyota gain competitive advantage by its Toyota Production System and Toyota way of thinking philosophies.

Toyota is well known for its company culture of its employee empowerment. Toyota is very focus for its employee satisfaction on job in order to gain their morale and loyalty.

Toyota lost its customer focus. Neglecting focus on consumer complaints about various defects in cars on road. Moreover it appears to be an attitude of keeping issues down.

Toyota has to give priority to consumer focus and satisfaction, because customer satisfaction level is the key for success. This can be achieved by fixing customer problems related to Toyota products promptly.

Toyota has to identify and address the issues of its overstretched supply chain by monitoring its Supply chain standard and efficiency which consist of OEM, Tier 1,Tier2 and Tier3 suppliers.

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