Toyota Case

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#1.
Problem:
The major problem that Toyota is facing with its Tundra plants in North America is the sharp drop in demand of pick-up trucks. As the global demand shifted from trucks to smaller cars, sales of the Tundra had been down by 53%. Toyota also faced the problem of overstocks of the 2008 Tundra models due to the unexpected sharp drop in demand. As Toyota emphasizes on its knowledge management system, the five principles of challenge, kaizen, genchi genbutsu, respect and teamwork become the essential strategies for Toyota to success. Therefore, laying off workers would not be a good solution, as it would harm the company’s strategy and knowledge management efforts. However, there are other actions that Toyota can take to hedge its market position.

Solution:
(Reallocate resources to specialize the manufacturing process of pick-up trucks) As cutting jobs is not preferred, Toyota may reallocate its resources to centralize the manufacturing of all models of pick-up trucks at San Antonio’s plant. Since the demand for Tundra trucks dropped, Toyota may consider moving its production of the smaller pick-up trucks like “Tacoma” and “Hilux” to the same plant. Such approach would allow Toyota to fully utilize its resources at the plant that is specialized in producing pick-up trucks. However, it would be necessary for Toyota to bring in new knowledge to the plant. Toyota may employ production specialists like Don Jackson to bring in new knowledge to the plant.

(Apply JIT with appropriated amount of stock reserve)
Toyota can improves its JIT manufacturing system to face the fluctuating demand of its trucks. As a robust supply chain has already been established among suppliers, Toyota may implement a full JIT system to manufactures its pick up trucks. This may effectively resolve the potential overstock problem of pick up cars at its dealers. Therefore, it is essential to be engaged in closed collaboration and good relationship with reliable suppliers....
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