Toyota Management - a Case Study

Case study of Toyota

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Case study of Toyota

1. Introduction

1. Toyota Company has remained one of the most successful vehicle manufacturing companies in the world’s history, having been founded in 1947 as a Japanese domestic vehicle manufacturing company.
2. This paper aims to explore the journey behind the success of the company with regard to competition strategies, production, and thesss setbacks.  

1. Origins

1. Founding

1. The source of the idea of the Toyota Company came from Toyoda Sakichi, an entrepreneur and a textile industry inventor. His first invention was a Toyoda Automatic Loom in 1926 to manufacture his textile products (Clark, 2013).
2. By 1930, he had sold the patents rights to Platt Brothers, a British textile company. He later urged his son Toyoda Kiichiro to consider the possibility of vehicle manufacturing in his country.
3. Toyoda Automatic Loom leadership opposed the move to invest in automobiles claiming that it was so risky. In 1930, Kiichiro was granted permission to set up an automobile department.

1. First production

1. Through an examination of the structure of the imported American automobiles, Kiichiro produced his original 20 automobiles in 1935. By 1936 the department had produced 1142 vehicles.
2. As a result of the World War II, the Toyota Company moved from producing private cars to military vehicles for the government.

1. Evolution of Production System

1. Mass production

The end of world war revived Kiichiro’s ambition of mass production, but it came with many problems like small markets, economic instability, labor restrictions, and competition (Monden, 2011). Negative impacts of mass production were:

1. High production costs.
2. Many defective productions.
3. Extreme labor division and specialization.
4. The production never considered consumer preferences.

1. Machine setup time reduction

The need to reduce the machine setup duration, for stamping of the body parts to reduce the limitations of mass production, emerged. The time was reduced to minutes to allow economical production (Liker & Convis, 2011).

1. Workplace Organization

Grouping the workers into teams was Ohno’s idea meant for easy monitoring and innovation. Bonus payments were later introduced based on the productivity of the groups.

1. Quality Improvement

This was meant to limit the errors that occur during the assembling process. It involved error correction at the end of the line of products through;

1. Stopping the assembling line, if an error emerged, until the error is fixed.
2. Training the members on how to detect the system errors and tracing it back to its origin (Liker & Convis, 2011).

1. Other inclusions in the evolution process were the development of the Kanban System to coordinate the workflow of the production system and Organizing Supplies to coordinate the manufacturing process.
2. The consequence of the evolution was increased labor productivity and a significant reduction in a number of defective vehicles.

1. Distribution Process and Customer Service

The 1975 resolution of treating the dealers as equal partners resulted in extensive sales and customer service training for the sellers. The sales team depended on their dealers to reach out to the customers; through this, they could identify the customer taste and preferences.