One of Toyota’s concepts is their “just-in-time production” principle. This principle is the principle of having parts ready just as they are needed rather than having large inventories in assembly plants and warehouses. The more obvious benefit of this is that it allows Toyota to have less capital tied up in inventory due to their “just-in-time production” principle. The less obvious advantage to this principle is that the engineering changes can take effect much more quickly this way.
The company doesn’t have to waste time using up or clearing out stockpiles of parts. In addition, if there are problems with individual parts, they can be detected sooner since there is very little lag time from receiving the parts to using them (Why, 2007). This is also where “Jidoka” or not letting any defect go from one machine to the next principle comes in too. Toyota uses this principle to detect unacceptable quality during its production process instead of waiting at the end of production when it may not be visible.
The name “jidoka” is apparently a Japanese pun on the term “automation. ” The concept was created by Toyota before Toyota was created. This principle helps in reduced costs and increased reliability in Toyota’s production process (Why, 2007). Cost Control Toyota’s decision to “come to the people” yet bring their principles and methods with them to whatever area they build in, strengthens Toyota’s cost control and their overall success. This
“The Toyota cost reduction focus, coupled with pricing that fluctuates with the market, is what makes stable employment possible. When the market is unreceptive to Toyota prices, they cut the prices – not the people. By stabilizing the people, lean manufacturing and continual cost reduction are possible” (Waddell, 2005). Just-in-time production is just one of the principles Toyota uses in cost control. This principle basically is simply having the parts ready just as you need them while not maintaining large inventories in assembly plants and warehouses.
Although there is obviously cost-saving to not having a lot of the company’s capital tied up in inventory, other points that Toyota points out is that engineering changes can take place quicker since stockpiles of parts don’t have to be cleared out before the changes occur and also if there are any problems with any of the individual parts, Toyota claims it can be detected quicker since they are used closer to the time they are made (Why, 2007).
Possibly one of the areas that may easily go unnoticed in Toyota’s success is their contributions to the various areas their manufacturing plants and their workers live. Toyota participates in community activities, sponsors educational and cultural programs as well as sponsoring research (Why, 2007). Competition with Competitors It’s not easy being number one though. “Toyota’s competitors are determined not to roll over and play dead, allowing Toyota to cakewalk to the top spot” (Krebs, 2006).
Automakers Chrysler and BMW accepted GM’s invitation to block Toyota’s domination of hybrid technology in Spring of 2006. The three manufacturers were joining together to cooperate in joint development of hybrid technology and Ford is expected to join the trio. In the article it states that other Asian automakers were considering joining up with them as well (Krebs, 2006). The article states that Ford has already accused Toyota of deliberately witholding battery production from their company.
Other manufacturers sites are accusing Toyota of becoming arrogant with their number one status. Whether it’s just other automakers claims or not, Toyota faces an age issue of being considered “not my father’s Camry” just as in the 70’s and 80’s went throught the “not my father’s Oldsmobile. The article states that the average age of Camry drivers is 48 whereas for example, the average age of Hyundai drivers is 39. The article “young consumers see Toyota as a brand for older drivers, lacking distinction and peer approval” (Krebs, 2006).
Although many companies and auto manufacturers like to find fault with the number one automaker, if the same energy were used in examining Toyota’s innovative ideas, examining Toyota’s guiding principles and understanding the different ways Toyota shows their employees they value their time and energy, and even readings some of the many, many books written on Toyota’s concepts and principles, their time would probably be better spent. Just as the title of one of the articles sstated, “Learning from Toyota—Again.
Balakrishnan, R. “The Toyota Production System. ” Telelavoro. 2007. 3 May 2007 ;http://www. telelavoro. rassengna. it/fad/socorg03/113/toyota. htm;. Collier, Robert. “Behind Toyota’s Hybrid Revolution. ” San Francisco Chronicle. 24Apr2006. San Francisco Chronicle. 30Apr2007 ;http://www. sfgate. com/cgi- bin/article. cgifile=/c/a/2006/04/24/MNG3JIE6DKI. Dtl;. Gina, Chon. “A Way Cool Strategy: Toyota’s Scion Plans to Sell Fewer Cars. ” Wall Street Journal. 2007. Wall Street Journal. 2 May 2007 ;http://online. wsj. com/article/SB116313070935919553. html;.