case study on toyota

Over about a four-year period, they showed us how work was actually done in practice in dozens of plants. Kent and I went to Toyota plants and those of suppliers here in the U.S. and in Japan and directly watched literally hundreds of people in a wide variety of roles, functional specialties, and hierarchical levels. I personally was in the field for at least 180 working days during that time and even spent one week at a non-Toyota plant doing assembly work and spent another five months as part of a Toyota team that was trying to teach TPS at a first-tier supplier in Kentucky.

What did you discover?

We concluded that Toyota has come up with a powerful, broadly applicable answer to a fundamental managerial problem. The products we consume and the services we use are typically not the result of a single person's effort. Rather, they come to us through the collective effort of many people each doing a small part of the larger whole. To a certain extent, this is because of the advantages of specialization that Adam Smith identified in pin manufacturing as long ago as 1776 in The Wealth of Nations . However, it goes beyond the economies of scale that accrue to the specialist, such as skill and equipment focus, setup minimization, etc.

The products and services characteristic of our modern economy are far too complex for any one person to understand how they work. It is cognitively overwhelming. Therefore, organizations must have some mechanism for decomposing the whole system into sub-system and component parts, each "cognitively" small or simple enough for individual people to do meaningful work. However, decomposing the complex whole into simpler parts is only part of the challenge. The decomposition must occur in concert with complimentary mechanisms that reintegrate the parts into a meaningful, harmonious whole.

This common yet nevertheless challenging problem is obviously evident when we talk about the design of complex technical devices. Automobiles have tens of thousands of mechanical and electronic parts. Software has millions and millions of lines of code. Each system can require scores if not hundreds of person-work-years to be designed. No one person can be responsible for the design of a whole system. No one is either smart enough or long-lived enough to do the design work single handedly.

Furthermore, we observe that technical systems are tested repeatedly in prototype forms before being released. Why? Because designers know that no matter how good their initial efforts, they will miss the mark on the first try. There will be something about the design of the overall system structure or architecture, the interfaces that connect components, or the individual components themselves that need redesign. In other words, to some extent the first try will be wrong, and the organization designing a complex system needs to design, test, and improve the system in a way that allows iterative congruence to an acceptable outcome.

The same set of conditions that affect groups of people engaged in collaborative product design affect groups of people engaged in the collaborative production and delivery of goods and services. As with complex technical systems, there would be cognitive overload for one person to design, test-in-use, and improve the work systems of factories, hotels, hospitals, or agencies as reflected in (a) the structure of who gets what good, service, or information from whom, (b) the coordinative connections among people so that they can express reliably what they need to do their work and learn what others need from them, and (c) the individual work activities that create intermediate products, services, and information. In essence then, the people who work in an organization that produces something are simultaneously engaged in collaborative production and delivery and are also engaged in a collaborative process of self-reflective design, "prototype testing," and improvement of their own work systems amidst changes in market needs, products, technical processes, and so forth.

It is our conclusion that Toyota has developed a set of principles, Rules-in-Use we've called them, that allow organizations to engage in this (self-reflective) design, testing, and improvement so that (nearly) everyone can contribute at or near his or her potential, and when the parts come together the whole is much, much greater than the sum of the parts.

What are these rules?

We've seen that consistently—across functional roles, products, processes (assembly, equipment maintenance and repair, materials logistics, training, system redesign, administration, etc.), and hierarchical levels (from shop floor to plant manager and above) that in TPS managed organizations the design of nearly all work activities, connections among people, and pathways of connected activities over which products, services, and information take form are specified-in-their-design, tested-with-their-every-use, and improved close in time, place, and person to the occurrence of every problem.

That sounds pretty rigorous.

It is, but consider what the Toyota people are attempting to accomplish. They are saying before you (or you all) do work, make clear what you expect to happen (by specifying the design), each time you do work, see that what you expected has actually occurred (by testing with each use), and when there is a difference between what had actually happened and what was predicted, solve problems while the information is still fresh.

That reminds me of what my high school lab science teacher required.

Exactly! This is a system designed for broad based, frequent, rapid, low-cost learning. The "Rules" imply a belief that we may not get the right solution (to work system design) on the first try, but that if we design everything we do as a bona fide experiment, we can more rapidly converge, iteratively, and at lower cost, on the right answer, and, in the process, learn a heck of lot more about the system we are operating.

You say in your article that the Toyota system involves a rigorous and methodical problem-solving approach that is made part of everyone's work and is done under the guidance of a teacher. How difficult would it be for companies to develop their own program based on the Toyota model?

Your question cuts right to a critical issue. We discussed earlier the basic problem that for complex systems, responsibility for design, testing, and improvement must be distributed broadly. We've observed that Toyota, its best suppliers, and other companies that have learned well from Toyota can confidently distribute a tremendous amount of responsibility to the people who actually do the work, from the most senior, expeirenced member of the organization to the most junior. This is accomplished because of the tremendous emphasis on teaching everyone how to be a skillful problem solver.

How do they do this?

They do this by teaching people to solve problems by solving problems. For instance, in our paper we describe a team at a Toyota supplier, Aisin. The team members, when they were first hired, were inexperienced with at best an average high school education. In the first phase of their employment, the hurdle was merely learning how to do the routine work for which they were responsible. Soon thereafter though, they learned how to immediately identify problems that occurred as they did their work. Then they learned how to do sophisticated root-cause analysis to find the underlying conditions that created the symptoms that they had experienced. Then they regularly practiced developing counter-measures—changes in work, tool, product, or process design—that would remove the underlying root causes.

Sounds impressive.

Yes, but frustrating. They complained that when they started, they were "blissful in their ignorance." But after this sustained development, they could now see problems, root down to their probable cause, design solutions, but the team members couldn't actually implement these solutions. Therefore, as a final round, the team members received training in various technical crafts—one became a licensed electrician, another a machinist, another learned some carpentry skills.

Was this unique?

Absolutely not. We saw the similar approach repeated elsewhere. At Taiheiyo, another supplier, team members made sophisticated improvements in robotic welding equipment that reduced cost, increased quality, and won recognition with an award from the Ministry of Environment. At NHK (Nippon Spring) another team conducted a series of experiments that increased quality, productivity, and efficiency in a seat production line.

What is the role of the manager in this process?

Your question about the role of the manager gets right to the heart of the difficulty of managing this way. For many people, it requires a profound shift in mind-set in terms of how the manager envisions his or her role. For the team at Aisin to become so skilled as problem solvers, they had to be led through their training by a capable team leader and group leader. The team leader and group leader were capable of teaching these skills in a directed, learn-by-doing fashion, because they too were consistently trained in a similar fashion by their immediate senior. We found that in the best TPS-managed plants, there was a pathway of learning and teaching that cascaded from the most senior levels to the most junior. In effect, the needs of people directly touching the work determined the assistance, problem solving, and training activities of those more senior. This is a sharp contrast, in fact a near inversion, in terms of who works for whom when compared with the more traditional, centralized command and control system characterized by a downward diffusion of work orders and an upward reporting of work status.

And if you are hiring a manager to help run this system, what are the attributes of the ideal candidate?

We observed that the best managers in these TPS managed organizations, and the managers in organizations that seem to adopt the Rules-in-Use approach most rapidly are humble but also self-confident enough to be great learners and terrific teachers. Furthermore, they are willing to subscribe to a consistent set of values.

How do you mean?

Again, it is what is implied in the guideline of specifying every design, testing with every use, and improving close in time, place, and person to the occurrence of every problem. If we do this consistently, we are saying through our action that when people come to work, they are entitled to expect that they will succeed in doing something of value for another person. If they don't succeed, they are entitled to know immediately that they have not. And when they have not succeeded, they have the right to expect that they will be involved in creating a solution that makes success more likely on the next try. People who cannot subscribe to these ideas—neither in their words nor in their actions—are not likely to manage effectively in this system.

That sounds somewhat high-minded and esoteric.

I agree with you that it strikes the ear as sounding high principled but perhaps not practical. However, I'm fundamentally an empiricist, so I have to go back to what we have observed. In organizations in which managers really live by these Rules, either in the Toyota system or at sites that have successfully transformed themselves, there is a palpable, positive difference in the attitude of people that is coupled with exceptional performance along critical business measures such as quality, cost, safety, and cycle time.

Have any other research projects evolved from your findings?

We titled the results of our initial research "Decoding the DNA of the Toyota Production System." Kent and I are reasonably confident that the Rules-in-Use about which we have written are a successful decoding. Now, we are trying to "replicate the DNA" at a variety of sites. We want to know where and when these Rules create great value, and where they do, how they can be implemented most effectively.

Since we are empiricists, we are conducting experiments through our field research. We are part of a fairly ambitious effort at Alcoa to develop and deploy the Alcoa Business System, ABS. This is a fusion of Alcoa's long standing value system, which has helped make Alcoa the safest employer in the country, with the Rules in Use. That effort has been going on for a number of years, first with the enthusiastic support of Alcoa's former CEO, Paul O'Neill, now Secretary of the Treasury (not your typical retirement, eh?) and now with the backing of Alain Belda, the company's current head. There have been some really inspirational early results in places as disparate as Hernando, Mississippi and Poces de Caldas, Brazil and with processes as disparate as smelting, extrusion, die design, and finance.

We also started creating pilot sites in the health care industry. We started our work with a "learning unit" at Deaconess-Glover Hospital in Needham, not far from campus. We've got a series of case studies that captures some of the learnings from that effort. More recently, we've established pilot sites at Presbyterian and South Side Hospitals, both part of the University of Pittsburgh Medical Center. This work is part of a larger, comprehensive effort being made under the auspices of the Pittsburgh Regional Healthcare Initiative, with broad community support, with cooperation from the Centers for Disease Control, and with backing from the Robert Wood Johnson Foundation.

Also, we've been testing these ideas with our students: Kent in the first year Technology and Operations Management class for which he is course head, me in a second year elective called Running and Growing the Small Company, and both of us in an Executive Education course in which we participate called Building Competitive Advantage Through Operations.

· · · ·

Steven Spear is an Assistant Professor in the Technology and Operations Management Unit at the Harvard Business School.

Other HBS Working Knowledge stories featuring Steven J. Spear: Decoding the DNA of the Toyota Production System Why Your Organization Isn't Learning All It Should

Developing Skillful Problem Solvers: Introduction

Within TPS-managed organizations, people are trained to improve the work that they perform, they learn to do this with the guidance of a capable supplier of assistance and training, and training occurs by solving production and delivery-related problems as bona fide, hypothesis-testing experiments. Examples of this approach follow.

• A quality improvement team at a Toyota supplier, Taiheiyo, conducted a series of experiments to eliminate the spatter and fumes emitted by robotic welders. The quality circle members, all line workers, conducted a series of complex experiments that resulted in a cleaner, safer work environment, equipment that operated with less cost and higher reliability, and relief for more technically-skilled maintenance and engineering specialists from basic equipment maintenance and repair.
• A work team at NHK (Nippon Spring) Toyota, were taught to conduct a series of experiments over many months to improve the process by which arm rest inserts were "cold molded." The team reduced the cost, shortened the cycle time, and improved the quality while simultaneously developing the capability to take a similar experimental approach to process improvement in the future.
• At Aisin, a team of production line workers progressed from having the skills to do only routine production work to having the skills to identify problems, investigate root causes, develop counter-measures, and reconfigure equipment as skilled electricians and machinists. This transformation occurred primarily through the mechanism of problem solving-based training.
• Another example from Aisin illustrates how improvement efforts—in this case of the entire production system by senior managers—were conducted as a bona fide hypothesis-refuting experiment.
• The Acme and Ohba examples contrast the behavior of managers deeply acculturated in Toyota with that of their less experienced colleagues. The Acme example shows the relative emphasis one TPS acculturated manager placed on problem solving as a training opportunity in comparison to his colleagues who used the problem-solving opportunity as a chance to first make process improvements. An additional example from a Toyota supplier reinforces the notion of using problem solving as a vehicle to teach.
• The data section concludes with an example given by a former employee of two companies, both of which have been recognized for their efforts to be a "lean manufacturer" but neither of which has been trained in Toyota's own methods. The approach evident at Toyota and its suppliers was not evident in this person's narrative.

Defining conditions as problematic

We concluded that within Toyota Production System-managed organizations three sets of conditions are considered problematic and prompt problem-solving efforts. These are summarized here and are discussed more fully in a separate paper titled "Pursuing the IDEAL: Conditions that Prompt Problem Solving in Toyota Production System-Managed Organizations."

Failure to meet a customer need

It was typically recognized as a problem if someone was unable to provide the good, service, or information needed by an immediate or external customer.

Failure to do work as designed

Even if someone was able to meet the need of his or her customers without fail (agreed upon mix, volume, and timing of goods and services), it was typically recognized as a problem if a person was unable to do his or her own individual work or convey requests (i.e., "Please send me this good or service that I need to do my work.") and responses (i.e., "Here is the good or service that you requested, in the quantity you requested.").

Failure to do work in an IDEAL fashion

Even if someone could meet customer needs and do his or her work as designed, it was typically recognized as a problem if that person's work was not IDEAL. IDEAL production and delivery is that which is defect-free, done on demand, in batches of one, immediate, without waste, and in an environment that is physically, emotionally, and professionally safe. The improvement activities detailed in the cases that follow, the reader will see, were motivated not so much by a failure to meet customer needs or do work as designed. Rather, they were motivated by costs that were too high (i.e., Taiheiyo robotic welding operation), batch sizes that were too great (i.e., the TSSC improvement activity evaluated by Mr. Ohba), lead-times that were too long, processes that were defect-causing (i.e., NHK cold-forming process), and by compromises to safety (i.e., Taiheiyo).

Our field research suggests that Toyota and those of its suppliers that are especially adroit at the Toyota Production System make a deliberate effort to develop the problem-solving skills of workers—even those engaged in the most routine production and delivery. We saw evidence of this in the Taiheiyo, NHK, and Aisin quality circle examples.

Forums are created in which problem solving can be learned in a learn-by-doing fashion. This point was evident in the quality circle examples. It was also evident to us in the role played by Aisin's Operations Management Consulting Division (OMCD), Toyota's OMCD unit in Japan, and Toyota's Toyota Supplier Support Center (TSSC) in North America. All of these organizations support the improvement efforts of the companies' factories and those of the companies' suppliers. In doing so, these organizations give operating managers opportunities to hone their problem-solving and teaching skills, relieved temporarily of day to day responsibility for managing, production and delivery of goods and services to external customers.

Learning occurs with the guidance of a capable teacher. This was evident in that each of the quality circles had a specific group leader who acted as coach for the quality circle's team leader. We also saw how Mr. Seto at NHK defined his role as, in part, as developing the problem-solving and teaching skills of the team leader whom he supervised.

Problem solving occurs as bona fide experiments. We saw this evident in the experience of the quality circles who learned to organize their efforts as bona fide experiments rather than as ad hoc attempts to find a feasible, sufficient solution. The documentation prepared by the senior team at Aisin is organized precisely to capture improvement ideas as refutable hypotheses.

Broadly dispersed scientific problem solving as a dynamic capability

Problem solving, as illustrated in this paper, is a classic example of a dynamic capability highlighted in the "resource-based" view of the firm literature.

Scientific problem solving—as a broadly dispersed skill—is time consuming to develop and difficult to imitate. Emulation would require a similar investment in time, and, more importantly, in managerial resources available to teach, coach, assist, and direct. For organizations currently operating with a more traditional command and control approach, allocating such managerial resources would require more than a reallocation of time across a differing set of priorities. It would also require an adjustment of values and the processes through which those processes are expressed. Christensen would argue that existing organizations are particularly handicapped in making such adjustments.

Excerpted with permission from "Developing Skillful Problem Solvers in Toyota Production System-Managed Organizations: Learning to Problem Solve by Solving Problems," HBS Working Paper , 2001.

• About / Contact
• Privacy Policy
• Alphabetical List of Companies
• Business Analysis Topics

Toyota’s Operations Management, 10 Critical Decisions, Productivity

Toyota Motor Corporation’s operations management (OM) covers the 10 decisions for effective and efficient operations. With the global scale of its automobile business and facilities around the world, the company uses a wide set of strategies for the 10 critical decisions of operations management. These strategies account for local and regional automotive market conditions, including the trends examined in the PESTLE analysis (PESTEL analysis) of Toyota . The automaker is an example of successful multinational operations management. These 10 decisions indicate the different areas of the business that require strategic approaches. Toyota also succeeds in emphasizing productivity in all the 10 decisions of operations management.

Toyota’s approaches for the 10 strategic decisions of operations management show the importance of coordinated efforts for ensuring streamlined operations and high productivity in international business. Successful operations management leads to high productivity, which supports competitive advantages over other automakers, such as Ford , General Motors , Tesla , BMW , and Hyundai. Nonetheless, these competitors continuously enhance their operations and create challenges to Toyota’s competitive advantages.

Toyota’s Operations Management, 10 Critical Decision Areas

1. Design of Goods and Services . Toyota addresses this strategic decision area of operations management through technological advancement and quality. The company uses its R&D investments to ensure advanced features in its products. Toyota’s mission statement and vision statement provide a basis for the types and characteristics of these products. Moreover, the automaker accounts for the needs and qualities of dealership personnel in designing after-sales services. Despite its limited influence on dealership employment, Toyota’s policies and guidelines ensure the alignment between dealerships and this area of the company’s operations management.

2. Quality Management . To maximize quality, the company uses its Toyota Production System (TPS). Quality is one of the key factors in TPS. Also, the firm addresses this strategic decision area of operations management through continuous improvement, which is covered in The Toyota Way, a set of management principles. These principles and TPS lead to high-quality processes and outputs, which enable innovation capabilities and other strengths shown in the SWOT analysis of Toyota . In this regard, quality is a critical success factor in the automotive company’s operations.

3. Process and Capacity Design . For this strategic decision area of operations management, Toyota uses lean manufacturing, which is also embodied in TPS. The company emphasizes waste minimization to maximize process efficiency and capacity utilization. Lean manufacturing helps minimize costs and supports business growth, which are objectives of Toyota’s generic strategy for competitive advantage and intensive strategies for growth . Thus, the car manufacturer supports business efficiency and cost-effectiveness in its process and capacity design. Cost-effective processes support the competitive selling prices that the company uses for most of its automobiles.

4. Location Strategy . Toyota uses global, regional, and local location strategies. For example, the company has dealerships and localized manufacturing plants in the United States, China, Thailand, and other countries. The firm also has regional facilities and offices.  Toyota’s marketing mix (4Ps) influences the preferred locations for dealerships. The automaker addresses this strategic decision area of operations management through a mixed set of strategies.

5. Layout Design and Strategy . Layout design in Toyota’s manufacturing plants highlights the application of lean manufacturing principles. In this critical decision area, the company’s operations managers aim for maximum efficiency of workflow. On the other hand, dealership layout design satisfies the company’s standards but also includes decisions from dealership personnel.

6. Job Design and Human Resources . The company applies The Toyota Way and TPS for this strategic decision area of operations management. The firm emphasizes respect for all people in The Toyota Way, and this is integrated in HR programs and policies. These programs and policies align with Toyota’s organizational culture (business culture) . Also, the company has training programs based on TPS to ensure lean manufacturing practice. Moreover, Toyota’s company structure (business structure) affects this area of operations management. For example, the types and characteristics of jobs are specific to the organizational division, which can have human resource requirements different from those of other divisions.

7. Supply Chain Management . Toyota applies lean manufacturing for supply chain management. In this strategic decision area of operations management, the company uses automation systems for real-time adjustments in supply chain activity. In this way, the automotive business minimizes the bullwhip effect in its supply chain. It is worth noting that this area of operations management is subject to the bargaining power of suppliers. Even though the Five Forces analysis of Toyota indicates that suppliers have limited power, this power can still affect the automotive company’s productivity and operational effectiveness.

8. Inventory Management . In addressing this strategic decision area of operations management, Toyota minimizes inventory levels through just-in-time inventory management. The aim is to minimize inventory size and its corresponding cost. This inventory management approach is covered in the guidelines of TPS.

9. Scheduling . Toyota follows lean manufacturing principles in its scheduling. The company’s goal for this critical decision area of operations management is to minimize operating costs. Cost-minimization is maintained through HR and resource scheduling that changes according to market conditions.

10. Maintenance . Toyota operates a network of strategically located facilities to support its global business. The company also has a global HR network that supports flexibility and business resilience. In this strategic decision area of operations management, the company uses the global extent of its automotive business reach to ensure optimal and stable productivity. Effective maintenance of assets and business processes optimizes efficiency for Toyota’s sustainability and related CSR and ESG goals .

Productivity at Toyota

Toyota’s operations management uses productivity measures or criteria based on business process, personnel, area of business, and other variables. Some of these productivity measures are as follows:

• Number of product units per time (manufacturing plant productivity)
• Revenues per dealership (dealership productivity)
• Number of batch cycles per time (supply chain productivity)
• Cannas, V. G., Ciano, M. P., Saltalamacchia, M., & Secchi, R. (2023). Artificial intelligence in supply chain and operations management: A multiple case study research. International Journal of Production Research , 1-28.
• Jin, T. (2023). Bridging reliability and operations management for superior system availability: Challenges and opportunities. Frontiers of Engineering Management , 1-15.
• Toyota Motor Corporation – Form 20-F .
• Toyota Motor Corporation – R&D Centers .
• Toyota Production System .
• U.S. Department of Commerce – International Trade Administration – Automotive Industry .
• Copyright by Panmore Institute - All rights reserved.
• This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s.
• Educators, Researchers, and Students: You are permitted to quote or paraphrase parts of this article (not the entire article) for educational or research purposes, as long as the article is properly cited and referenced together with its URL/link.

Implementation of Total Quality Management (TQM): Toyota Case Study

Introduction, implementation of tqm in toyota, tqm practices in toyota, benefits of tqm in toyota, examples of tqm in toyota, toyota quality management, toyota tqm implementation challenges.

The Toyota Corporation case study report is based on the implementation of total quality management (TQM) meant to improve the overall performance and operations of this automobile company. TQM involves the application of quality management standards to all elements of the business.

It requires that quality management standards be applied in all branches and at all levels of the organization. The characteristic of Toyota Corporation going through the total quality process is unambiguous and clear.

Toyota has limited interdepartmental barriers, excellent customer and supplier relations, spares time to be spent on training, and the recognition that quality is realized through offering excellent products as well as the quality of the entire firm, including personnel, finance, sales, and other functions.

The top management at Toyota Corporation has the responsibility for quality rather than the employees, and it is their role to provide commitment, support, and leadership to the human and technical processes (Kanji & Asher, 1996).

Whereas the TQM initiative is to succeed, the management has to foster the participation of Toyota Corporation workers in quality improvement and create a quality culture by altering attitudes and perceptions towards quality.

This research report assesses the implementation of TQM and how Toyota manages quality in all organization management systems while focusing on manufacturing quality. The report evaluates the organization management elements required when implementing TQM, identifies, and investigates the challenges facing Quality Managers or Executives in implementing Quality Management Systems.

In order to implement TQM, Toyota corporations focused on the following phases:

• The company extended the management responsibility past the instantaneous services and products
• Toyota examined how consumers applied the products generated, and this enabled the company to develop and improve its commodities
• Toyota focused on the insubstantial impacts on the procedures as well as how such effects could be minimized through optimization
• Toyota focused on the kaizen (incessant process development) in order to ensure that all procedures are measurable, repeatable, and visible.

The commitment from business executives is one of the key TQM implementation principles that make an organization successful. In fact, the organizational commitment present in the senior organizational staff ranges from top to lower administration. These occur through self-driven motives, motivation, and employee empowerment. Total Quality Management becomes achievable at Toyota by setting up the mission and vision statements, objectives, and organizational goals.

In addition, the TQM is achievable via the course of active participation in organizational follow-up actions. These actions denote the entire activities needed and involved during the implementation of the set-out ideologies of the organization. From Toyota Corporation’s report, TQM has been successful through the commitment of executive management and the organizational workforce (Toyota Motor Corporation, 2012).

Through inventory and half the bottlenecks at half cost and time, the adopters of TMS (Toyota Management System) are authorized to manufacture twice above the normal production. To manage the quality in all organizational management systems, the Toyota Production System incorporates different modernisms like strategy or Hoshin Kanri use, overall value supervision, and just-in-time assembly.

The amalgamation of these innovations enables Toyota to have a strong competitive advantage despite the fact that Toyota never originated from all of them. The 1914 Henry Ford invention relied on the just-in-time production model. The Ford system of production, from a grand perspective, warrants massive production, thus quality (Toyota Motor Corporation, 2012).

Kanji and Asher (1996) claim that to manage the minute set of production necessitated by the splintered and small post-war marketplaces, the JIT system focuses on the motion and elimination of waste materials. This reduces crave for work-in-process inventory by wrapping up the long production lines. Toyota Corp wraps the production lines into slashed change-over times, a multi-trained workforce that runs manifold machines, and new-fangled cells into a U shape.

When supplementing the just-in-cells, the system of kanban is employed by the Toyota Corporation to connect the cells that are unable to integrate physically. Equally, the system helps Toyota integrate with other external companies, consumers, and suppliers.

The TQM and the creativity of Toyota proprietors both support the quality at the source. The rectification and discovery of the production problems require the executives to be committed. At the forefront of Toyota operations, the managers integrate a number of forms of operational quality checks to ensure quality management at all levels.

The uninterrupted tests help the Toyota workforce engaging in the assembly course to scrutinize the value of apparatus, implements, and resources utilized in fabrication. The checks help in the scrutiny of the previously performed tasks by other workers. However, the corporation’s own test enables the workers to revise their personal advances in the assembly course.

The Toyota process owners set up the mistake-proofing (Poka-yoke) procedures and devices to capture the awareness of management and involuntarily correct and surface the augmenting problems. This is essential for the critical production circumstances and steps that prove impractical and tricky for Toyota employees to inspect.

Nevertheless, the policy deployment system decentralizes the process of decision-making at Toyota. This context of implementing Total Quality Management originates from Hoshin Kanri’s management by objective (MBO).

This aspect becomes more advantageous to Toyota when dealing with quality management. The system initially puts into practice the coordinated approach and provides a clear structure for the suppliers, producers, and consumers through inter-organizational cost administration. Moreover, Toyota executives can solve the concurrent delivery, cost, and quality bottlenecks, thus replacing and increasing the relatively slow accounting management mechanisms.

Customer focus that leads to the desired customer satisfaction at Toyota Company is one of the major success factors in TQM implementation. For every business to grow, it should have understanding, reliable, and trustworthy customers. The principle of customer satisfaction and focus has been the most presently well-thought-out aspect of Toyota’s manufacturing quality.

The TQM may characteristically involve total business focus towards meeting and exceeding customers’ expectations and requirements by considering their personal interests. The mission of improving and achieving customer satisfaction ought to stream from customer focus.

Thus, when focusing on manufacturing quality, this aspect enhances TQM implementation. The first priorities at Toyota are community satisfaction, employees, owners, consumers, and mission. The diverse consumer-related features from liberty. The concern to care is eminent in Toyota Corporation during manufacturing.

Toyota has three basic perspectives of TQM that are customer-oriented. These are based on its manufacturing process traced back to the 1950s. The strategies towards achieving quality manufacturing, planning, and having a culture towards quality accomplishment are paramount for TQM implementation to remain successful. To enhance and maintain quality through strategic planning schemes, all managers and employers must remain effectively driven.

This involves training workers on principles concerning quality culture and achievement. Scheduling and planning are analytical applications at Toyota Company that purposes in assessing customer demand, material availability, and plant capacity during manufacturing.

The Toyota Corporation has considerable approaches that rank it among the successful and renowned implementers of TQM. From the inherent and designed structure of Toyota, it becomes feasible to comprehend why quality manufacturing is gradually becoming effective. The inspection department is responsible for taking corrective measures, salvaging, and sorting the desired manufactured product or service quality.

The Toyota Corporation also has a quality control system that is involved in determining quality policies, reviewing statistics, and establishing quality manuals or presentation data. Furthermore, quality assurance is one of the integral principles in quality implementation that is practically present at Toyota. The quality assurance and quality inspectors throughout the Toyota Company structure also manage research and development concerning the quality of manufactured products and services.

The Toyota production and operations management system is similarly dubbed as the managerial system. In fact, in this corporation, operational management is also referred to as the production process, production management, or operations (Chary, 2009). These simply incorporate the actual production and delivery of products.

The managerial system involves product design and the associated product process, planning and implementing production, as well as acquiring and organizing resources. With this broad scope, the production and operation managers have a fundamental role to play in the company’s ability to reach the TQM implementation goals and objectives.

The Toyota Corporation operations managers are required to be conversant and familiar with the TQM implementation concepts and issues that surround this functional area. Toyota’s operation management system is focused on fulfilling the requirements of the customers.

The corporation realizes this by offering loyal and express commodities at logical fees and assisting dealers in progressing commodities proffered. As Slack et al. (2009) observed, the basic performance objectives, which pertain to all the Toyota’s operations, include quality, speed, flexibility, dependability, and cost. Toyota Company has been successful in meeting these objectives through its production and operation functions.

Over several decades, Toyota’s operational processes and management systems were streamlined, resulting in the popularly known Toyota Production System. Although the system had been extensively researched, many companies, such as Nissan, experienced difficulties in replicating TPS.

The TPS was conceived when the company realized that producing massive quantities from limited product lines and ensuring large components to achieve maximum economies of scale led to flaws. Its major objectives were to reduce cost, eliminate waste, and respond to the changing needs of the customers. The initial feature of this system was set-up time reduction, and this forms the basis of TQM implementation.

At Toyota Corporation, quality is considered as acting responsibly through the provision of blunder-gratis products that please the target clientele. Toyota vehicles are among the leading brands in customer satisfaction. Due to good quality, its success has kept growing, and in 2012, the company was the best worldwide. Moreover, Toyota has been keen on producing quality vehicles via the utilization of various technologies that improve the performance of the vehicles.

While implementing TQM, Toyota perceives speed as a key element. In this case, speed objective means doing things fast in order to reduce the time spent between ordering and availing the product to the customer.

The TPS method during processing concentrates on reducing intricacy via the use of minute and uncomplicated machinery that is elastic and full-bodied. The company’s human resources and managers are fond of reorganizing streams and designs to promote minimalism. This enhances the speed of production.

Another objective during TQM implementation is dependability. This means timely working to ensure that customers get their products within the promised time. Toyota has included a just-in-time production system comprised of multi-skilled employees who work in teams. The kanban control allows the workers to deliver goods and services as promised. Advancing value and effectiveness appears to be the distress for administrators, mechanical specialists, and other Toyota human resources.

During TQM implementation, Toyota responds to the demands by changing its products and the way of doing business. Chary (2009) argues that while implementing TQM, organizations must learn to like change and develop responsive and flexible organizations to deal with the changing business environment.

Within Toyota plants, this incorporates the ability to adopt the manufacturing resources to develop new models. The company is able to attain an elevated degree of suppleness, manufacturing fairly tiny bunches of products devoid of losses in excellence or output.

The organizational hierarchy and job descriptions also determine the successful implementation of the TQM. Toyota is amongst the few companies whose organizational structure and task allocation have proved viable in TQM implementation. The company has three levels of management. See the diagram below.

Management hierarchy

Despite the hierarchy and task specification, employees are able to make independent decisions and take corrective measures when necessary to ensure quality during production. Team working is highly encouraged at Toyota Corporation, and this plays a significant role during TQM implementation. All stakeholders are incorporated in quality control initiatives to ensure client demands are satisfied.

However, all employees are required to carry out their assigned tasks, and the management closely supervises the ways of interactions between workers. The management ensures that the manufacturing lines are well-built and all employees are motivated to learn how to improve the production processes.

Toyota is among the few manufacturers in the complete automobile industry that consistently profited during the oil crisis in 1974. The discovery was the unique team working of the Japanese that utilized scientific management rules (Huczynski & Buchanan, 2007).

The joint effort in Japan, usually dubbed Toyotaism, is a kind of job association emphasizing ‘lean-assembly.’ The technique merges just-in-time production, dilemma-answering groups, job equivalence, authoritative foremost-streak administration, and continued procedure perfection.

Just-in-time (JIT) assembly scheme attempts to accomplish all clients’ needs instantly, devoid of misuse but with ideal excellence. JIT appears to be dissimilar from the conventional functional performances in that it emphasizes speedy production and ravage purging that adds to stumpy supply.

Control and planning of many JIT approaches are concerned directly with pull scheduling, leveled scheduling, kanban control, synchronization of flow, and mixed-model scheduling (Slack et al., 2009).

Toyota appears to be amongst the principal participants in changing Japan to a kingpin in car production. Companies, which have adopted the company’s production system, have increased efficiency and productivity. The 2009 industrial survey of manufacturers indicates that many world-class firms have adopted continuous-flow or just-in-time production and many techniques Toyota has been developing many years ago.

In addition, the manufacturing examination of top plant victors illustrates that the mainstream them utilize lean production techniques widely. Thus, team-working TPS assists Toyota Corporation in the implementation of TQM.

Executives and Quality Managers face some challenges while implementing Quality Management Systems in organizations. In fact, with a lack of the implementation resources such as monetary and human resources in any organization, the implementation of TQM cannot be successful. Towards the implementation of programs and projects in organizations, financial and human resources have become the pillar stones.

The approach of TQM impels marketplace competence from all kinds of organizational proceeds to ensure profitability and productivity. To meet the desired results in TQM implementation, an organization ought to consider the availability of human and financial resources that are very important for the provision of an appropriate milieu for accomplishing organizational objectives.

In the case of Toyota, which originated and perfected the philosophy of TQM, the Executives, and Quality Managers met some intertwined problems during TQM implementation. The flaw in the new product development is increasingly becoming complicated for the managers to break and accelerate, thus creating reliability problems. Besides, secretive culture and dysfunctional organizational structure cause barriers in communication between the top management, thus, in turn, augmenting public outrage.

The top executives may fail to provide and scale up adequate training to the suppliers and new workforces. As a result, cracks are created in the rigorous TPS system. In addition, a lack of leadership at the top management might cause challenges in the implementation of TQM. Therefore, in designing the organizational structures and systems that impact quality, the senior executives and managers must be responsible, as elaborated in Figure 2 below.

Total Quality Management is a concept applied in the automobile industry, including the Toyota Corporation. It focuses on continuous improvement across all branches and levels of an organization. Being part of Toyota, the concept defines the way in which the organization can create value for its customers and other stakeholders. Through TQM, Toyota Corporation has been able to create value, which eventually leads to operation efficiencies.

These efficiencies have particularly been achieved by continuous correction of deficiencies identified in the process. A particular interest is the central role that information flow and management have played in enabling TQM initiatives to be implemented, especially through continuous learning and team working culture.

The Toyota way (kaizen), which aims at integrating the workforce suggestions while eliminating overproduction and manufacturing wastes, helps the company to respect all the stakeholders and give clients first priority. The objectives are realized through TPS.

Chary, D. 2009, Production and operations management , Tata McGraw-Hill Education Press, Mumbai.

Huczynski, A. & Buchanan, D. 2007, Organizational behavior; an introductory text, Prentice Hall, New York, NY.

Kanji, G. K. & Asher, M. 1996, 100 methods for total quality management , SAGE Thousands Oak, CA.

Slack, N. et al. 2009, Operations and process management: principles and practice for strategic management, Prentice Hall, New York, NY.

Toyota Motor Corporation 2012, Annual report 2012. Web.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2024, March 30). Implementation of Total Quality Management (TQM): Toyota Case Study. https://ivypanda.com/essays/total-quality-management-tqm-implementation-toyota/

"Implementation of Total Quality Management (TQM): Toyota Case Study." IvyPanda , 30 Mar. 2024, ivypanda.com/essays/total-quality-management-tqm-implementation-toyota/.

IvyPanda . (2024) 'Implementation of Total Quality Management (TQM): Toyota Case Study'. 30 March.

IvyPanda . 2024. "Implementation of Total Quality Management (TQM): Toyota Case Study." March 30, 2024. https://ivypanda.com/essays/total-quality-management-tqm-implementation-toyota/.

1. IvyPanda . "Implementation of Total Quality Management (TQM): Toyota Case Study." March 30, 2024. https://ivypanda.com/essays/total-quality-management-tqm-implementation-toyota/.

Bibliography

IvyPanda . "Implementation of Total Quality Management (TQM): Toyota Case Study." March 30, 2024. https://ivypanda.com/essays/total-quality-management-tqm-implementation-toyota/.

• Synchronous and Just-In-Time Manufacturing and Planning
• Just-in-Time Learning Approach
• The Just-In-Time Concept in Operations Management
• Provision of Just-In-Time Technology
• Major Global Corporation: Toyota
• Total “Just-In-Time” Management, Its Pros and Cons
• Just-In-Time Training Principles in the Workplace
• First World Hotel: Just-in-Time Manufacturing Model
• Motorola Company's Just-in-Time Implementation
• Toyota Motor Corporation's Sustainability
• Barriers and Facilitators of Workplace Learning
• The Science of Behavior in Business
• Standards, models, and quality: Management
• Managerial and Professional Development: Crowe Horwath CPA limited
• Managerial and Professional Development: Deloitte & Touché Company

Case Study: Toyota's Response to the 2011 Earthquake and Tsunami

Toyota, a name synonymous with unparalleled excellence and innovation in the automobile industry, faced one of its most challenging adversities following the catastrophic earthquake and tsunami that struck Japan in March 2011. This natural disaster not only caused significant loss of life and property, but it also brought many industries, including automotive, to a standstill. However, Toyota’s response to this crisis serves as a lesson in resilience, adaptability, and strategic foresight.

1. Immediate Impact of the Disaster

The Great East Japan Earthquake and subsequent tsunami devastated the Tōhoku region, leading to disruptions in the supply chain. Toyota, like many Japanese automakers, heavily depended on suppliers from this region. As a result, many factories had to halt their operations due to the shortage of essential components.

Losses: Toyota reported that the disaster affected the production of over 150,000 vehicles. Apart from local consequences, this disruption resonated throughout the global market since Toyota is a major player in international car exports.

2. Crisis Management and Initial Response

In the face of adversity, Toyota's management showcased exceptional leadership. They prioritized the safety of their employees and immediately implemented disaster recovery plans.

Employee Safety: Toyota ensured that all its workers were safe, and the ones affected directly by the disaster received the necessary support.

Communication: Transparency with stakeholders was maintained. Toyota updated the public, investors, and its employees regularly about the factory shutdowns and the expected time frame of production resumption.

Supply Chain Evaluation: Given the intricate and interconnected nature of Toyota's supply chain, the company diligently assessed the extent of disruption, evaluating how many of their suppliers were affected.

3. Strategic Shift in Supply Chain Management

Toyota realized that to mitigate such vulnerabilities in the future, a revamp of their supply chain strategy was essential.

Multi-Sourcing: To avoid over-reliance on a single supplier, Toyota started the practice of multi-sourcing, ensuring that even if one supplier faced difficulties, an alternative source was available.

Increased Inventory: Though the "Just-In-Time" system is efficient, in the face of disasters, it can be a liability. Thus, Toyota started keeping slightly higher inventories of critical components.

Supplier Collaboration: Toyota worked closely with its suppliers, helping them in their recovery efforts and ensuring that even the smaller suppliers had robust contingency plans in place.

4. Emphasis on Technological Integration

Post-disaster, Toyota intensified its focus on technology to enhance resilience.

Digital Twin Technology: Toyota employed this to create virtual representations of its supply chain. This tech allowed them to simulate various scenarios and develop effective responses to potential disruptions.

AI & Data Analytics: By analyzing vast amounts of data, Toyota could predict potential supply chain vulnerabilities and take preemptive measures.

5. Long-Term Outcomes of the Strategic Shift

Toyota's strategic decisions post the 2011 disaster bore fruitful results.

Resilient Supply Chain: With the revamped supply chain system, Toyota was better equipped to handle subsequent challenges, including global economic shifts or other natural disasters.

Enhanced Stakeholder Confidence: The company's proactive and transparent approach post-disaster bolstered confidence among investors, customers, and employees.

Industry Benchmark: Toyota's response served as a case study for many corporations worldwide, highlighting the importance of adaptability and foresight in crisis management.

The 2011 earthquake and tsunami were unprecedented in their devastation, but they also served as a profound learning experience for global giants like Toyota. By prioritizing the safety of its people, maintaining open communication, and strategically overhauling its supply chain, Toyota transformed a crisis into an opportunity for long-term growth and stability.

In an ever-changing global landscape, Toyota's response to the 2011 disaster underscores the importance of resilience, adaptability, and continuous learning. It serves as a testament to the fact that even in the face of adversity, with the right approach, businesses can not only recover but thrive.

Related Posts

• Case Example: Building Aluminum Gutters on a Level Production Schedule - These days aluminum gutters for houses, at least in the U.S., are mostly built to order, on-site at the house. Rolls of materials are brought to the job site, where...
• Toyota’s Mentor/Mentee Case Example - Table of Contents Setup Chapter 1 Chapter 2 Chapter 6 Chapter 9 Chapter 10 The best way to explain Toyota’s mentor/mentee teaching approach is to show it in action. The...
• The Essence of Toyota Management System - Table of Contents The History and Evolution of TMS The Core Principles of TMS Practices & Techniques Modern Adaptations of TMS The Future of TMS In the world of management,...
• The Principle: Find Solid Partners and Grow Together to Mutual Benefit in the Long Term - Go to a conference on supply chain management and what are you likely to hear? You will learn a lot about “streamlining” the supply chain through advanced information technology. If...
• Toyota's Vision and Mission: A Deep Dive - In a world of ever-evolving industries and shifting corporate landscapes, Toyota Motor Corporation stands tall as a beacon of longevity, innovation, and excellence. Its commitment to customer satisfaction, environmental sustainability,...
• Toyota’s Mission Statement and Guiding Principles - We get a flavor of what distinguishes Toyota from excerpts of its mission statement for its North American operations compared with that of Ford . Ford’s mission statement seems reasonable....
• Summary Discussion of the Toyota Mentor/Mentee Case - Table of Contents 1. How Did You Feel as You Read Through the Case? 2. How Long Do You Think the Story in the Case Took? 3. What Would Have...
• The 14 Principles of the Toyota Way - The Toyota Way, a management philosophy that has propelled Toyota to its current position as a global leader in efficiency and quality, is underpinned by 14 key principles. These principles...
• Toyota Crisis Management - Why would Toyota need to be concerned about crisis management when it has implemented processes throughout the supply chain that are synchronized and integrated to function like a fine Swiss...
• Toyota Learning Principles and the v4L Framework - Toyota is well known for its approach to problem solving and continuous improvement. Articles by practitioners, researchers, and participants have made the tools and techniques of continuous improvement familiar to...
• Toyota's Global Expansion: Strategies and Challenges
• Toyota's Cross-cultural Communication Strategies in Global Operations
• Toyota Logistics Operation
• Toyota's Supplier Relationship Management: Building Long-Term Partnerships
• Toyota's Joint Ventures and Strategic Alliances
• Toyota's Six Sigma Approach and Its Implementation
• Toyota's Approach to Quality Management: Tools and Techniques
• Toyota's Digital Transformation in Manufacturing
• How Toyota's Just-In-Time (JIT) System Revolutionized Manufacturing
• Toyota Production Scheduling and Operations

• Search for:

Home       Resources       Case studies       Toyota

Few companies have as solid a reputation for supplier relationship management as Toyota does. The world’s biggest auto maker has developed longterm, collaborative and close partnerships with its key Japanese suppliers over a period of several decades. In its European operations, like those of North America, supplier relationship management (SRM) is also a major focus area, albeit one with a shorter history.

We asked Jean-Christophe Deville, general manager, purchasing, at Toyota Motor Europe about its approach.

How do you define srm at toyota and how do srm specific activities with strategic suppliers differ from the way you manage supplier relations in general, what impact, if any, has the economic downturn and toyota’s recent quality issues had on your srm activities, what challenges do you face internally from an srm perspective, what other roles does purchasing, and the supplier relationship managers within the function, play in srm, innovation is a key driver of srm at toyota. how do you manage the process of capturing, assessing and either progressing or rejecting supplier ideas and proposals, to date, the financial benefits you’ve achieved from srm activity are relatively small (0-2% of annual spend with each supplier), but you expect these to grow significantly in future. how will you achieve that, toyota generally shares savings with suppliers, typically on a 50:50 basis. why do you consider this important, what do you see as the most important ingredients for success in srm and what should you avoid doing, reports and publications, case studies, newsletter sign-up, stay connected on linkedin, lang: en_us, enjoy customer of choice benefits.

Find out what your key suppliers really think of you and how to become their customer of choice. 

Find out more

Stay in touch

2020 global srm research report - supplier management at speed..

Now in its 12th year, this year we have seen an increase of 29% in the number of companies responding compared to 2019. In addition, the proportion of respondents at CPO/EVP level or equivalent has increased to over 50%. Learn how now, more than ever before, procurement has the opportunity to make the case for SRM to ensure organisations don’t just survive but thrive.

Sign up below to get our insight emails direct to your inbox.

• Bahasa Indonesia
• Sign out of AWS Builder ID
• AWS Management Console
• Account Settings
• Billing & Cost Management
• Security Credentials
• AWS Personal Health Dashboard
• Support Center
• Expert Help
• Knowledge Center
• AWS Support Overview
• AWS re:Post

Toyota on AWS

Toyota Motor Corporation (Toyota) is a global automotive industry leader committed to developing the safest and most responsible ways of moving people. It manufactures vehicles in 27 countries across regions, markets the company’s products in over 170 countries, and employs nearly 350,000 people globally. Building on Amazon Web Services (AWS), Toyota innovates across its business from keeping track of vehicle journeys from manufacturing to dealership, to leveraging the Toyota Connected data lake to detect vehicle defects and improve product quality for customers.

Toyota's Cloud Journey on AWS

• Data Solutions

Using data solutions built for AWS cloud infrastructure to enhance scale and reduce costs

• Business Applications

Building innovative applications on AWS to delight customers

• Enterprise Transformation

Cloud migration to accelerate digital transformation and realize greater business value

• Continuous Innovation

Ongoing improvements to support enterprise transformation

Toyota Connected Uses AWS to Respond in Seconds to Driver Emergencies

Toyota Connected is Toyota's data services division that uses AWS to process large amounts of vehicle data to help respond to drivers in emergencies. AWS services such as Amazon Bedrock help Toyota developers to access generative AI to create new driver experiences. As Toyota's Brian Kursar and Ashley Parks discuss, using AWS helps Toyota Connected solve data challenges creatively and increase safety and faster call center action for customers.

Watch the video »

Enhancing Customer Safety by Leveraging the Scalable, Secure, and Cost-Optimized Toyota Connected Data Lake

Toyota has made “connected cars” a core priority as part of its broader transformation from an auto company to a mobility company. In recent years, Toyota and its affiliate technology and big data company, Toyota Connected , have developed an array of new technologies to provide connected services that enhance customer safety and the vehicle ownership experience. To make this vision a reality, Toyota Connected’s Mobility Team embarked on building a near real-time “Toyota Connected Data Lake” on AWS. The serverless data lake uses Amazon Simple Storage Solution (Amazon S3) as its primary data store.

Read the blog »

Toyota Connected Optimizes EMR Costs and Improves Resiliency of Batch Jobs

At Toyota Connected, data ingested from millions of connected vehicles is stored in the petabyte-scale Toyota Connected data lake with Amazon S3, Amazon EMR , interactive SQL queries, and machine learning (ML) applications using open-source analytics frameworks, such as Apache Spark . Amazon EMR is used to curate datasets and make them available for analytics and ML. For these large datasets, Toyota Connected strives to find the right balance between cost, performance, and resiliency. Learn how it designed the architecture for batch jobs using AWS. 

Toyota Connected and AWS Design and Deliver Collision Assistance Application

Toyota Connected North America (TC) is a technology and big data company that partners with Toyota Motor Corporation and Toyota Motor North America to develop products that aim to improve the driving experience for Toyota and Lexus owners. Together, TC and AWS engineers designed, built, and delivered their new Collision Assistance product, which debuted in early August 2021. In the aftermath of an accident, Collision Assistance offers Toyota and Lexus drivers instructions to help them navigate a post-collision situation, including documenting the accident, filing an insurance claim, and transitioning to the repair process. The solution was built on a serverless architecture on AWS.

Read the blog post »

Toyota Builds Shared Mobility Platform on AWS

Imagine being tasked with collecting, analyzing, and securing data from hundreds of sources around the world, in multiple cloud and on-premises environments. In this re:Invent 2019 presentation, Brian Kursar, chief technology officer (CTO) of Toyota Motor North America and Toyota Connected North America , discusses how Toyota created a secure, cloud-native solution on AWS to analyze billions of messages per day, using AWS Key Management Service (AWS KMS) encryption to provide granular access and keep corporate assets secure with data segregation.

Building a Development Platform to Support Secure Application Deployment Using Backstage and AWS

As Toyota Motor North America (TMNA) matured its cloud development strategy, its manual application deployment process was creating bottlenecks. TMNA built a new internal development platform on AWS called Chofer using Backstage, an open-source framework for building developer portals open sourced by Spotify. Its team of developers has adopted over 40 different AWS services, helping the company modernize its applications and save money and developer time while facilitating faster, more secure application deployments at scale..

Read the Amazon ECS case study »

Reimagining Mobility with Toyota Connected

In 2018, Toyota began its transition from an automotive to a mobility services business, redefining value for the customer. Through its Toyota Mobility Services Platform, Toyota Connected can offer personalized, localized, and predictive data to enhance the driving experience. By using AWS solutions, Toyota Connected could handle the scale without a major cost increase. The company chose a serverless computing architecture, which increases agility, provides flexibility to scale, and lowers costs by 70–80 percent.

Read the case study »

The data is being collected to build data services for customers that really drive satisfaction and provide new capabilities around safety and convenience.”

Mahadevan Krishnan Principal Architect, Toyota Connected

How the AWS Cloud Helps Cars Along the Journey from Creation to Customer

A new car’s journey begins long before a driver takes it out on the open road for the first time. Within its vehicle data warehouse (VDW), global manufacturer  Toyota North America  can follow each vehicle’s origin story, from manufacturing plants to dealerships around the world. Using a next-generation data lake built on AWS using Amazon S3 , AWS Glue , and Amazon Redshift —and developed by  Infosys Cobalt —Toyota North America can collect and analyze data from different manufacturing plants. The cloud-based insights solution helps Toyota North America monitor the story of every vehicle’s creation, make supply chain decisions, and deliver better customer service.

About Toyota

Founded in 1937 and headquartered in Japan, Toyota Motor Corporation (Toyota) is one of the largest automobile manufacturers in the world, producing about 10 million vehicles per year.

Hear inspiring customer innovation stories from AWS re:Invent

Watch now »

Ending Support for Internet Explorer

• Free Case Studies
• Business Essays

Write My Case Study

Buy Case Study

Case Study Help

• Case Study For Sale
• Case Study Service
• Hire Writer

Case Study of Toyota

The giant automaker faced its one and only strike in 1950. This event, however, supplied Toyota an important philosophy, vying it the labor and management system which helped Toyota to gain mutual growth and success In both domestic and overseas markets. Today, this philosophy is very important to the structure of Toyota. Toast’s production system improved In the late sass, establishing the ‘Toyota Production System. ‘ This system became the major factor In the reduction of Inventories and defect In the plants of Toyota and Its suppliers.

It also underpinned all of Toast’s operations across the world.

We Will Write a Custom Case Study Specifically For You For Only $13.90/page!

It launched its first small cars in 1947. The operation outside Japan started in 1959 in Brazil and intended with growing network of foreign plants. Toyota celebrated its 60th anniversary in August 1997. It believes that its local production can provide customers with the productions they need, giving it the stable and long-term growth. It also has a global network of design and research and development facilities, consisting Japan, North America, and Europe markets.

It is now the world’s third largest manufacturer of automobiles in unit sales, but the first in its home. It plays an important role In the world’s automobile market even it stays behind General Motor and Ford , respectively. It earns and gains profits in international and domestic markets. Toyota and world automobile Industry The world automobile’s market Is very competitive In these days.

There are various numbers of automakers from many parts of the world. By the way, we sell unique case studies , did you know?

There are about 39 automakers in which comprising of Accuracy, Audio, BMW, Buick, Cadillac, Chevrolet, Chrysler, Deadwood Dodge, Fiat, Ford, GUM Truck, Honda, Handy, Infinite, Issue, Jaguar, Jeep, Aka, Land Rover, Lexus, Lincoln, Mazda, Mercedes-Benz, Mercury, Mediumistic, Ninjas, Oldsmobile, Plymouth, Pontiac, Propose, Renault, Saab, Saturn, Suburb, Suzuki, Toyota, Volkswagen , Volvo.

However, the key automakers are obvious. Toyota is one of those cars that are tied as the well-known vehicles worldwide. This is because Toyota operates business in foreign countries, making its brand recognizable.

Toyota gains a large share In global automobile’s market. This Is because Toyota has various types of cars available for all classes of drivers.

It has small cars to luxury sedans, full-sized pickup trucks, and crossover vehicles. For example, Corolla vehicles are for middle class people while Campy sedans cult high- class drivers. The main competitors of Toyota are General Motor and Ford who tie In ten ranking AT under one Ana two In ten term AT net sale Ana unlit sale. However, this ranking is in the world automobile’s market, but not in some regional automobile markets where Toyota stands at a higher ranking.

For instance, Toyota vehicles are more popular in Asian countries as they are in the same region with Japan, making the Toast’s cars more affordable than that of American and European cars.

This is because Toyota does not have to spend much money for transportation cost as the distances between Asian nations are shorter for cars from Japan to be sent to other Asian nations. Toast’s positioning With many competitors, Toast’s positioning in the automobile’s market is different from some of its competitors as they have different target segmentation.

Conversely, Ford and General Motor are still its important competitors because they produce cars to serve same target group. Toyota also produces luxury vehicles to complete the automobiles of Volvo, Mercedes, Benz, Audio, and Propose, for instance. Toast’s ranking in the term of unit and net sales in other region such as North America and Europe, where the automobile markets are very competitive, is still behind that of General Motor and Ford.

Consequently, Toyota wants to expand its sales in these regions. Toast’s performance in domestic and overseas in the recent years Japan: Toyota generates most of its profits domestically.

Nevertheless, it lost some of its shares to foreign competitors who enter Japanese automobile market. According to the annual report of 2002, the market of Toyota in Japan is not as good as overseas market. Domestic vehicle sales, including Dadaists and Hint vehicles, turned down 4.

6 %, from 2. 32 million units in the previous fiscal year to 2. 22 million units in fiscal 2002. In spite of edging down less than one percentage point, to 42. 2 %, the Toyota rand’s market share, not include mini vehicles, and stay above the 40 % mark for the fourth consecutive year.

Factoring in the mini vehicle market, and including the Dadaists and Hint brands, Toast’s share of the market was 38.

2 % models such as Corolla, Vita, Estimate, and Crown continued to be the strong sales. However, during fiscal 2002, impacted by the prolonged economic slump in the domestic market, vehicle sales in Japan’s automobile sector were down on the previous year. On the other hand, Toyota successfully protected its market share of more than 40 % by proactively bringing new and fully remodeled vehicles to the market. Keep calm and read Solutions Case Study right now!

This is an important reason why Toyota seeks market overseas as it need money for investing in its home in order to complete its competitors in Japan.

North America: Recently the automobile market in North America is optimistic. In fiscal 2002, Toast’s strengthen vehicle sales in North America, including Toyota and Lexus vehicles, rose 2. 7 % compared to the previous fiscal year’s 1. 73 million units, to reach a record high of 1. 78 million units. This was attributable to the effects of a brisk market, together with Toast’s introduction of new models and the full remodeling of popular vehicles.

Toast’s relentless technological innovations aimed at improving fuel efficiency in all of its models are steadily growing. In 2001, with respect to fuel economy, Toyota models were highly ranked by the U. S. Environmental Protection Agency in a broad range of size categories, ranking as the fourth automaker that concerning about environment in which Honda is the first in this field. While the Pries hybrid sedan and the RAVE the small SUB brought their respective classes, the ECHO compact sedan and the Oval large sedan also received high evaluations. Also, ten Purls nudity car, wanly was launched In ten u s.

Reek In July 2 gaining increasing recognition in North America. It sold 18,000 vehicles in fiscal 2002. Toyota plans to continue bolstering its manufacturing base in North America with a view to achieving production capacity of 1. 45 million vehicles during 2003. As part of these efforts, it is currently constructing a plant in Alabama to supply IV engines for the Tundra, which is built at its Indiana plant, Toyota Motor Manufacturing, Indiana, Inc.

(TMI). Production in Alabama will get under way in 2003 and plans call for an annual output of 120,000 engines.

Europe: During the year f 2002, Toast’s vehicle sales in Europe continued to fare well, having sales rising from 690,000 units in the previous year to 730,000 units. The Company’s market share expanded to 3. 8 % on a calendar-year basis due to robust sales of the Yards, which surpassed 210,000 units. Toyota also continued to extend its local production – it built 260,000 vehicles locally in fiscal 2002, compared to 180,000 in the previous year.

At Toast’s plant in the United Kingdom, Toyota Motor Manufacturing, where the Corolla and Avenues are built, it manufactured 200,000 gasoline engines in the year under review. With TM slated to become its European engine production centre, Toyota also plans to bring together diesel engines there from 2003. In addition, progress was made in Toast’s Joint venture with AS Peugeot Citron. In March 2002, Toyota Peugeot Citron Automobile Czech s. R.

O. was established in Kaolin, in the Czech Republic, and plant construction under way, Joining production of small cars will start from 2005 to target annual output of 300,000 vehicles. Toast’s goal is to achieve 800,000 unit sales and win a five % market share by 2005 accelerating its pace of localization in the European region. Mindful of this target, it founded Toyota Motor Europe in April 2002 as a holding company in Europe, in order to increase the efficiency of its European operations and augment the speed of business management decisions. It also incorporated Diesel Clean Advanced Technology which is cantered on its Diesel Particulate Knox Reduction system, in 60 Avenues models as part of its environmental activities in Europe.

The DEEP system is capable of simultaneously and continuously extracting particulate matter and nitrogen oxide emissions from diesel exhaust fumes. Over a scheduled 18-month period, which started in March 2002, Toyota will monitor the performance of the vehicles in seven countries, including the United Kingdom and Germany. 7 Toyota tries to expend its business in Europe since the automobile market in this region is quite competitive. From the plan and strategies that it has been adopting so far, it invests a lot of money in this market, hoping to gain share in Europe.

However, its share in this market is lower than those of other European automakers. Asia: Toyota gains fans in Asian countries as Toast’s vehicles are more affordable than that of other European cars.

The sales of Toyota The SEAN automotive market expanded one % in calendar 2001. Thailand and Malaysia recorded sales increases of more than 10 % while Taiwan and the Philippines contracted 17 % and 8 %, respectively. The SEAN market recovered to 88 % of its 1996 peak as a whole. Toyota can display the largest share of sales in Indonesia, Thailand, the Philippines, Brunet, and Vietnam.

It also extended its share of the markets in Thailand, Singapore, and Taiwan. Toast’s steadfast position in the area resulted in sales of 210,000 vehicles in the Asian market in fiscal 2002.

Chuan Toyota Motor launched sales AT ten coaster meal-sale Duds as ten TLS vehicle produced locally in China to bear the Toyota badge in April 2001. 8 It is easy for Toyota to expand its business in this region as the culture is similar to the culture of Japanese. It also does not have to face the distance problem.

Moreover, the trade integration between Asian nations also makes the business of Toyota move smoothly. Reasons for Toyota to engage international business activities Toyota is now operating business in more than 160 countries and going to expand more businesses in other countries. What reasons encourage it to engage in international business activities? There are several main reasons that push Toyota to take on international business activities.

Expand sales: First of all, Toyota wants to expand sales and make its name recognized. It produces vehicles matching people of every class.

It has small cars to luxury sedans, full-sized pickup trucks, and crossover vehicles. For example, Corolla vehicles are for middle class people while Campy sedans suit high-class drivers. These various choices make people in foreign countries interested in buying Toast’s vehicles. When the number f people who are interested in buying Toast’s automobiles increase, it raises its sales by Joining international activities.

Acquire resources: Companies look for foreign capital, technology, and information that they can use at home. Toyota opened Toyota Technical Center the research and development in California in 1977. This is not because the technologies and human resources in the US are better than in Japan. It is because the US government offers investing incentives to Japanese automakers to encourage them to operate business in the US to create Jobs for local people. ETC is a dynamic company that conducts the design-engineering and development of Toyota products, particularly those developed for North America market.

12 In this case Toyota gets both capital and information as a fringe benefit to bring back home.

For instance, after the success of Toyota Pries the hybrid vehicles which developed by ETC, it brought the hybrid technology information back to Japan. It then launched FICHE-BUSS the fuel cell hybrid bus having zero emission and low noise for Japanese people. This is also how Toyota employs workers in industrialized countries where employees have high salary. Minimize risk: Moreover, Toast’s vehicle sales in Japan have been declining gradually because foreign vehicles such as American and European cars share the automobile market in Japan. 3 In contrast, vehicle sales of Toyota in North America, Europe, Asia, Central and South America, Oceania, and Middle East have raised.

The annual sales in calendar 2001 in the US market, for example, were buoyant, reaching the second highest level ever, at 17. 18 million units. 14 To minimize instability of sales and profits in the domestic market, Toyota decides to try to take advantage of the business cycle. Figure 1. 3 represents Toast’s global sales which are higher than domestic.

Toast’s Major Factors Toyota is an automobile company whose operations extend beyond its domestic operations shores is faced with lots of hurdles and environmental factors, the extent to which it is able to combat these factors will determine how successful its operations will strive globally. Major challenges Low labor cost: I nee TLS reason Is low ladder cost. T I Is expensive to employ workers In Japan as It Is a developed and industrialized country where people have high salaries and quality of life. Most countries that Toyota controls operation are in Caucasus as China and the Philippines where people have low wages and education.

Alternatively, Toyota operates R&D in industrialized countries as workers with higher educations are needed for controlling R&D. For example, Toyota operates R&D in the US where people have higher education and it then controls operations in countries where it can find low labor cost.

Transportation cost: In addition, cheap transportation costs are another important challenge. When companies export products overseas, they usually use CIFS transport system which includes cost, freight, and insurance.

Exporters have to pay for all of the costs occurring from the shipment, making the products more expensive as importers will charge extra price. In contrast, if companies control operation in the importing countries, they can use Ex-Work transport system instead of CIFS. EX-Work is a transport system that purchasers can collect the products from factories of sellers. It is generally adopted by companies having subsidiaries and factories in importing countries.

This is why Toyota has overseas affiliates and subsidiaries.

If it invests in importing countries, it will not only save transportation cost, but also does not have to be concerned much about fluctuations of exchange rates. Threat of new entrants: New entrants to an industry typically bring to its new capacity, a desire to gain market share and substantial resources. They are, therefore, threats to an established corporation. The threat of entry depends on the presence of entry barriers and the reaction that can be expected from existing competitors.

Global entrants may pose a threat to Toast’s market share, especially from other Asia, Europe ; U. S. A. Car market leaders.

Toyota as global car manufacturing company started its production of vehicle outside Japan in 1959.

Toyota has established its own car manufacturing plant in different countries in Europe and successfully operating its business activities. In terms of car manufacturing company index, the following companies are as follows:

• Mediumistic.

Ford, BMW ; Jaguar already has secured market position in the British market environment, therefore their threat is made all the greater as they now have knowledge of the British market system and are building their customer and loyalty ass. On the other hand Toyota is trying to adopt the market share in Europe. Toyota as a multinational enterprise has already launched its product to the online market and is currently mature stage of online product cycle. However Toast’s online venture is in mature stage besides this they are always aware of what the potential threats to its business are. More established online car manufacturing company, who have already identified and possibly combated the risks to their market share may gain a competitive edge here, like rival Ford.

In a price sensitive and competitive industry achieving profits where prices are nailed down, low cost production is particularly Doolittle, especially IT tenure Is elasticity AT anemia, ten loyalty AT the customer may not be gained or retained unless cost incentives and quality assurance are customary.

The purpose of online sales facilities is to boost more sales and gain profit. Customers are prone to repeat orders; the backbone of business profit, therefore switching costs is not such as threat if brand loyalty is a prevalent sales feature.

Therefore Toyota may be viewed as a threat to other car manufacturing company such as Toyota. Strategies Adopted By Toyota Since it was established in 1937, Toyota Motor Corporation has contributed to the development of the automobile industry and society by providing people with automobiles. Toyota is now world’s third largest manufacturer of automobiles in unit sales and net sales and has established a well-balanced sales structure that is strategically positioned between the world’s three major markets.

By fiscal 2002, Toast’s consolidated world sales are 5. 54 million units of which the Japanese accounted 2.22 million units, North America 1.78 million units and Europe and other regions 1.4 million units.

Therefore Toast’s success is lies within its strategies, according to the company Annual Report 2001 these include:

• Focusing investment on the development of new technologies for the environment, safety and information and communications.
• Promoting further globalization within Toyota.
• Enhancing cost competitiveness to provide higher quality products and services at a more affordable price
• Expanding Toast’s value chain with a specific focus on building financial operations.

Conclusion:

As you can see, Toast’s huge amount of production of car accordingly to the hanging needs and wants of every people whole over the world is getting success day by day. Toyota plays an important role in the world’s automobile market, placing as the world’s third automaker in the term of net sale and unit sale. This is because Toyota has efficient strategies and ways for coping with cultural barriers.

It also looks ahead in the future aiming to be the best automobile in automaker industry. This innovative concept and strategy will help Toyota to produce the vehicles that make people proud of. It is not surprised to learn if Toyota cars are known as the automobiles of the future. Toyota must keep growing even as it builds a stronger foundation for the future; it has to do both for the company’s long-term health.

Related posts:

• Operation Strategy of Toyota
• Toyota Production System and Case Study Toyota
• The Toyota Pries
• Case Study on Toyota
• Case Study Toyota
• Toyota Case Study
• Case Study Toyota crisis

Quick Links

Privacy Policy

Terms and Conditions

Testimonials

Our Services

Case Study Writing Service

Case Studies For Sale

Our Company

Welcome to the world of case studies that can bring you high grades! Here, at ACaseStudy.com, we deliver professionally written papers, and the best grades for you from your professors are guaranteed!

[email protected] 804-506-0782 350 5th Ave, New York, NY 10118, USA

Acasestudy.com © 2007-2019 All rights reserved.

Hi! I'm Anna

Would you like to get a custom case study? How about receiving a customized one?

Haven't Found The Case Study You Want?

For Only $13.90/page

• Study Guides
• Homework Questions

M12 Case Study