The Production Systems Between Toyota And Honda Marketing Essay

Introduction of Japanese Production System

Nowadays industrialization is very influenced on the economic growth and considered as a crucial element for success to each country. As we can see, Japan is the leading industrialization country in creating high technologies and innovations; consequently, its country is able to earn high profits and become powerful among others. Nevertheless, the idea and strategy are the main factor in making a profit in the business; the company will be success by creating the unique product which attracts the customer’s demand. Since the company has to develop the products and services to satisfy the customers, each company has to come up with their own production system due to its important in making the business move forward.

However, Japanese Production System is considered as the most successful system among global markets. In this term, Japanese Production System means the system of manufacturing process resulting in products which come from the use of resources or existing of production factor, and this production system have been invented by Japanese people. According to this, Japanese is well-known in an automotive industry. Therefore, I would like to analyze and compare the production system of two big Japanese automotive industries; Toyota and Honda.

Overview of Toyota Company

Toyota is a product of TOYOTA MOTOR CORPORATION; the largest car manufacturer in Japan and currently take place as the third largest car manufacturer in the world after GENERAL MOTORS CORPORATION and FORD MOTOR COMPANY of the United States. Mr. Kiichiro Toyoda established Toyota automotive industry in 1937 and the motto of Toyota Company is “moving forward” which means it will never stop developing the right products to the customers. In the present, the headquarters is in Toyota City, Aichi, Japan. The affiliated automotive brand includes Toyota, Lexus, Hino and Daihatsu. Recently, Toyota has the fastest growth in the world and has branches all over the world. Moreover, this company is famous throughout the world for the creating of Toyota Production System (TPS) and Toyota Ways.

Toyota Production System

‘Toyota Production System’- (TPS) is a manufacturing strategy which developed by the Toyota Motor Corporation of Japan over a period of many years. TPS was established by Taichi Ohno and Shigeo Shingo from the late1950s and the goal of TPS is to maximize the value by ‘eliminating waste’ (anything that does not add value for the customers) from the manufacturing process. Since there is a high competitive in automotive business, Toyota is aiming to find the reasonable production method according to the idea of ‘eliminating waste’. They try to find a new ways to be profitable and become more efficient while improving its quality and reducing the cost.

Here, I would like to talk a little about the waste: ‘Waste’ exists in all works and at all levels in the organization. According to Mr. Ohno, there are 7 types of waste; over-production, wait time, transportation, processing, inventory, motion and defects. These wastes needed to be removed in order to continually improve the product quality to the highest because the disadvantage of having these 7 wastes is a time consuming in production process, and then it results in a poor quality production with the high investment. Nevertheless, more or less wastes are also hidden in every manufacturing process, in consequent, this effected in the poor efficiency and effectiveness. However, Toyota has come up with the idea to eliminate these wastes by using many systems.

The important purposes of TPS are the quantity control (JIT, Kanban & Autonomation), the quality control (Autonomation, improvement by small groups, functional management) and the respect for humanity (Flexible work force, capitalize workers ideas). This means Toyota will provide what the customer wants in the exact quality and quantity. From these unique strategies, Toyota Production System is bringing success to its automobile business. Moreover, this method is applicable for any types of business so many Japanese and Western companies are trying to adopt this successful system. Here are some examples of the Toyota Production System which are being used nowadays.

– Just in Time System (JIT)

While most of the companies focusing on the stimulating sales, Toyota is focus on JIT. The definition of Just-in-time is any process or supplier has to deliver on time. When the company receives an order from the customers, they have to do everything according to the timeline they have been planned until they collect the money. It is necessary for the company to control the volume and reduces the time line by removing the non-value added wastes. As a result, waste removal is one of the key in this lean manufacturing. In the Toyota Production System, overproduction can be prevented by kanban; produce as the number of demand, so there is no need for an extra inventory, warehouse or its manager.

The advantage of JIT system is the cost and time saving. By using this system, the company will have the limited stock suitable for the number of customer’s demand and this will help reducing the waste since the company only spends some time and money in producing the small amount of products for the customers. With JIT system, the overstock cannot occur and if the demand or style of the customer is changing, it will be easy to develop or set up the new product within the limited time; for example the heater in the car is only applicable in some cold winter countries and if the demand of car in the countries without winter is greater, what the company need to do is just make the new cars without heater, so there will be no stock and no waste.

– Kaizen (Improvement)

Kaizen is the Japanese term for continuous improvement step by step. This strategy involved with the companies and individuals section to achieve the improvements in the manufacturing process by working together. Accord to this, Toyota is focusing on teamwork and this system has been introduced in order to make the effectively production. Kaizen includes of four circles; establish a plan for change if necessary, make changes, observe the result, evaluating the results and processes. By using kaizen method, Toyota can continue to change and improve the product quality from time to time. Furthermore, the way to observe Kaizen are by benchmarking the process before the process change and then compare the result afterward, this is consider as never ending improvement.

– Jidoka (autonomation)

Jidoka refers to a stopping action in a production line when something is going wrong. It related to ‘autonomation’ and ‘error-proofing machine’. For ‘autonomation’, in order to avoid the defect passed to the next process in manufacture, Toyota has developed the machine that can automatically respond to the error by stopping the production line where causes the problem. Since the machine can automatic stop, the waste will not be produced and it is possible for one worker to control many machines in the same time. On the other hand, the ‘error-proofing’ or ‘Poka Yoke’ is the device that prevent the problem in the production line.

Overview of Honda Motor Company

Honda Company is well-known as the world’s largest motorcycle manufacturer and it is one of the leading companies in automakers. Its first success is when Honda introduced car models named “Honda Civic” to the world. After that Honda is the first Japanese automotive manufacturer which introduced the brand new car named “Acura” to the United States in 1986. The company was established by Soichiro Honda on September 24, 1948 and nowadays the headquarters is in Minato, Tokyo, Japan. However, Honda productions are not only motorcycles and automobiles but also garden equipments and power products. The company basic concept is “respect the individuals” which reflects their desire in respecting each individual person by their unique characteristic and their ability as well as trusting each other as equal partners in order to do their best in every situation. Another principle is “The Three Joys” which expressed as the ‘joy of buying’, ‘the joy of selling’ and ‘the joy of creating’.

Honda Production System

Since the demand of motorcycle in global market is increasing, Honda need to response to the evolution by strengthen the Honda Production System in Japan. Consequently, Honda has developed the new factory site in Hamamatsu, Kumamoto for consolidated the motorcycle productions with the goal of establishing a highly efficient production system that covering all the processes at once. Honda plans to shift from the medium motorcycles to the large one and recently, the company is trying to strengthen the automatic transmissions production system (AT) in Hamamatsu factory as well because the demand of transmission gears is steadily growing. This factory will also transfer the cutting-edge production technology to the Honda site across the world.

Honda is focusing on “the global flexible production system” as the growth is expanding in many regions such as in Asia and South America, they have to increase the capabilities to respond the flexible changes that occur in the business environment. In other word, this production system can flexibly respond to the demand in diversity range of models. Lately Honda is launching its production plants not only in North America and Canada but also in the Asia region like Thailand. Moreover, Honda is also renovate the new technologies and production system while maintain the high standards of its business.

Even though, Honda is offering the high quality product to the customers with attractive styles, Honda is also concern about the environment and safety issue so they manage the campaigns for these purposes through working as a team and sharing joy to people. Every year, Honda arranges the activities associated with the education, environment, traffic safety and community initiatives around the world.

– Just In Time and Kaizen

Honda’s main important part is to maintain the production efficiency by maximize the cost and minimize the storage and any other wastes. Many hundred parts of car need to be available according to “Just in Time” basis. Also Honda has the best supply’s based program among other Japanese automotive industry by developing great suppliers rather than exploit the existing ones. The improvement of Honda is never stop by inventing the new innovation all the time. Honda pay attention to the environmental issue so they are invented the hybrid cars that need no fossil fuels. And for the motorcycles, the company has developed the use of fuel injection system. Honda did not only make the improvement in the productions but also put the improvement in its quality and its employees. Therefore, Honda becomes the number 1 company in creating new value to the customers.

Conclusion

Since many competitors are steady appear worldwide, each company has to come up with their own strategy to compete in the market. In this case, Toyota and Honda are the most successful automotive industry in cars and motorcycles respectively in Japan. For Toyota, there is more focus on JIT system and teamwork system. The Toyota Production System is a good example in leading the success to not only the company itself but also the strategy adoption companies. As we can see, Toyota has the outstanding way to create their system for success by eliminating the waste and creating the profit. Toyota will produce only the ordered part to avoid the waste. Before the production process starts, the company will contribute the average amount of work to the workers and this result in fully use of human ability. Consequently, TPS has been spread to other different industries across the world. However, the TPS works well in Toyota Japan comparing to the other Toyota facilities because Toyota Japan is the original location which adopted this system and there are the different in human resources and styles among various countries e.g. Japan prefer to work as a team while American prefer to work individual.

In Japan, different automobile corporations have different aspects on kaizen activity. Toyota gives the important on team activities, like quality circles, while Honda emphasizes on an individual initiative and innovation. Honda production system is more focusing on the development of new innovations and technologies to attract the customers. Honda plays a large role as leaders for production facilities worldwide in areas such as launching new models to the automotive industry and advancing the skills of engineers whereas it concerns for the environment and safety issue in the same time.