Toyota Motor Company - Just in Time

Abstract

All companies require strategies so that they can meet their objectives effectively and efficiently. These strategies are called operational strategies. Developing these strategies are vital for effective utilization of resource, work process and human resource of the company. Therefore, managers spend a lot of time in building and implementing these strategies throughout the organization. Many companies who fail to develop effective operational strategies do not succeed for example, Kingfisher an Indian airline company went bankrupt because it failed to develop its strategies. This paper aims to analyze Toyota’s operation strategy to enhance the quality of cars manufactured and delivered to the consumers to reduce recall of its cars.

Toyota

Toyota Motor company was founded by Sakichi Toyoda in 1935. It was initially a weaving company manufacturing automatic looms and continued to manufacture it. The automotive division started in the year 1935, and the production followed a year after, by 1937 the company had globalized. By the year 1964, the company had open its operations in North America and Canada. By 2004, Toyota had become the leader in green and hybrid vehicle industry. Toyota has a strong brand recognition and market position with a significant share of the home market (48.4 % in Japan), North America (13.8%), Asia (16.5% excluding Japan and China) and Europe (4.6%) for its products (Singh, 2018).

Toyota is known for producing one of the safest cars globally and is known for its operational efficiency for introducing just in time system that aims at reducing cost of inventory. However, in the recent past the reputation of this company was at stake as a large number of cars were being recalled because of safety concerns. Also, there was a lack of effective communication between the investors which lead to devaluation of trust among its customers. This lead to reduction in stock valuation of the company.

One of the cars of Toyota the KSF were facing seating problems. This was mainly due to broken or missing parts, missing bolster or wrinkles. One of the main reasons for this was due to inefficient implementation of Just in time because of which there was insufficient time to fix the seats according to the standards before moving on to the next assembly line. This lead to reduction in production and increase in off-time vehicle inventory.

Toyota’s production system uses both Just-in-time and Jidoka techniques to eliminate waste from its production (Singh, 2018). Toyota has identified seven types of waste that need to be eliminated from its operations process: overproduction; unnecessary transportation, inventory, worker motion; defects; over- processing; and waiting (Staats and Upton, 2011). Toyota needs to ensure effective implementation of JIT, Jidoka and must work on the production flow to ensure that there is sufficient time for each assembly line to finish it tasks before the product moves on to the next activity. Steps need to be taken to ensure that every step adds value to the product.

Just-in-time should be practiced and advocated throughout the organization to ensure that the company is can achieve its goals. Steps should be taken to identify critical activities and blockages in the assembly line. It is crucial for the company to ensure an appropriate flow of assembly line so that there are no blockages in production.  Employees must be trained and encouraged  to come up with solutions and identify problems in the assembly line. The company can also develop preventing and safety testing.