Preview

Toyota Way Supply Chain

Satisfactory Essays
Open Document
Open Document
1859 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Toyota Way Supply Chain
The Toyota Way and Supply Chain Management
Jeffrey K. Liker
Professor, Industrial and Operations Engineering The University of Michigan and Principal, Optiprise, Inc.

Presentation for OESA Lean to Survive Program 2005
© Copyright Jeffrey Liker 2/14/2005Lean Enterprise Excellence Building Page 1

Supplier Gap: Toyota vs Big-3
Supplier Improvement, 1990-96 Defects (parts per million) Sales/Direct Employee Inventories/Sales U.S. OEM (Chrysler, Ford, GM) -47% +1% -6% Toyota -84% +36% -35%

Toyota Supplier Advantage, 1996 PPM Inventories Output/worker 35% -25% 10%

Source: Jeff Dyer, based on 39 supplier plants serving Toyota + U.S. OEM

© Copyright Jeffrey Liker

2/14/2005Lean Enterprise Excellence Building Page 2

“4 P” Model of the Toyota Way e nb Ge nch iG u ts u

Problem Solving

ct +

Toyota’s Terms
Ka ize n

Te am wo

rk

(Continuous Improvement and Learning)

Continual organizational learning through Kaizen Go see for yourself to thoroughly understand the situation. (Genchi Genbutsu) Make decisions slowly by consensus, thoroughly considering all options; implement rapidly (Nemawashi)

People and Partners

Re

sp e

(Respect, Challenge and Grow Them)

Grow leaders who live the philosophy Respect, develop and challenge your people and teams Respect, challenge, and help your suppliers Create process “flow” to surface problems Level out the workload (Heijunka) Stop when there is a quality problem (Jidoka) Use pull systems to avoid overproduction Standardize tasks for continuous improvement Use visual control so no problems are hidden Use only reliable, thoroughly tested technology Base management decisions on a long-term philosophy, even at the expense of short-term financial goals

Process
(Eliminate Waste) ge len

Ch al

Philosophy
(Long-term Thinking)

© Copyright Jeffrey Liker

2/14/2005Lean Enterprise Excellence Building Page 3

Philosophy: Company Foundation
Toyota Motor Manufacturing MISSION Ford
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Toyota Production System (Human Infrastructure)
    • 1096 Words
    • 5 Pages

    Toyota Production System (Human Infrastructure)

    these people primarily came from within the industry and formed the nucleus of TMM operations…… Next TMC sent Tsutsumi people to Georgetown, hundreds of them in all. These trainers-on-loan coached TMM Supervisory personnel one-on one and reinforced TPS Basic……These coordinators were charged to develop their counterparts only by persuasion---not to do things themselves. This intensely personal approach brought an eye opening moment to most TMM personnel”. TPS, in training its personnel use two guiding principle. Just In Time (JIT) and Jidoka (In station Quality).…

    • 1096 Words
    • 5 Pages
    Good Essays
    Read More
  • Powerful Essays

    Nissan S Supply Chain
    • 2245 Words
    • 9 Pages

    Nissan S Supply Chain

    [pic] FACULTY OF ENGINEERING AND COMPUTING Module Assignment SUPPLY CHAIN MANAGEMENT M25EKM By Rama Venkata Naveen Reddy Karri STUDENT ID: 2891540 MODULE LEADER: Mr. Phil Southey YEAR 2009-2010 INDEX PAGES 1) Introduction 3 2)Nissan European Technology Center 3 3)How information is shared 3 4) NX96 4 5) How is supply chain performance measured 4 6)…

    • 2245 Words
    • 9 Pages
    Powerful Essays
    Read More
  • Good Essays

    Compare and Contrast Toyota’s Manufacturing System with a Conventional Mass-Production System.
    • 253 Words
    • 2 Pages

    Compare and Contrast Toyota’s Manufacturing System with a Conventional Mass-Production System.

    The conventional mass-production system advocates that by producing a limited product line in massive quantities, companies can reach efficiency as well as gain economies of scale. However, this can create a large amount of extra costs such as the warehouse rents for the excess inventories. Moreover, the extreme division of labor and long production runs increase the probability of getting defects, which will eventually lower the profit of a company.…

    • 253 Words
    • 2 Pages
    Good Essays
    Read More
  • Good Essays

    Ford Supply Chain
    • 606 Words
    • 3 Pages

    Ford Supply Chain

    2) What advantages does Dell derive from virtual integration? How important are these advantages in the auto business?…

    • 606 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    Toyota Production System
    • 2241 Words
    • 9 Pages

    Toyota Production System

    Toyota Production System (TPS) is one of the most benchmarked business improvement strategies in modern industry. There are three main approaches applied as the companies try to emulate Toyota’s success which are the copy cat approach, the home-grown approach and Suppliers development as it stand out in the transformation effort. The most replicated activities that Toyota conducts on a routine basis is the suppliers development approach in the achievement of TPS. Based on the survey from Henke in 2010, shows that an annual North American original equipment manufacturer (OEM) has been ranked number one for supplier relations over the last seven years. The study shows that Toyota is superior to the major US and Japanese OEM’s in supplier communication, OEM assistance, and supplier profit and partnering. While Toyota may be ranked as one of the leading OEMs in the automotive industry for supplier working relations, it is not clear what parts of TPS plays a significant part in Toyota’s relations with the supply based. This work will be focus on the aspects of the Toyota Way that is used in supplier development for vehicle operations. The goal of this case is to quantify Toyota’s supplier development activities to better understand the aspects of understanding Toyota’s suppliers. It will be expected to provide new insight and understanding Toyota’s supplier development factors and relationships that lead to successful supplier development.…

    • 2241 Words
    • 9 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Toyota Production System Review
    • 410 Words
    • 2 Pages

    Toyota Production System Review

    The Toyota Production System (TPS) operating management style has become the gold standard in the automotive industry, and even though their strategy has been attempted to be duplicated, it has yet to be replicated. The main reason behind the failures of TPS imitators is that they fall short in developing a management strategy to align the goals and objectives of all the functional groups within the enterprise. These imitators get too caught up in cost-reduction strategic decisions rather than strategies which add the most value to the customer as well as their suppliers. Toyota has tighter supplier relations then their competitors by integrating production facilities and locations with their suppliers. This gives them a competitive advantage in both quality and cost over their competition. Finally, Toyota designs their products with their customers specifically in mind to help add the most value possible to the customer. Toyota is able to concentrate on a value added strategy by using the collaborative technique discussed in class. Toyota employs cross functional collaboration between departments to identify common goals and objectives between functional groups, as well as external collaboration between their suppliers. Toyota takes advantage of their collaborative agreements with their suppliers to not only reduce costs but also to increase quality standards to enhance the value for the customer. Toyota understands that it’s most important to get a quality product from their suppliers, in a timely fashion than it is to get the cheapest product possible, while many of their competitors are focused on just the opposite. With the current economic problems and the credit crisis severely crippling demand in the auto industry, American car makers are facing a big problem in producing a quality product cheaply. Although the Big Three automakers faced similar problems in the 1980’s and survived, they have to try to survive in a much more globally competitive industry.…

    • 410 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Better Essays

    Toyota Motor Manufacturing Case Study
    • 1299 Words
    • 6 Pages

    Toyota Motor Manufacturing Case Study

    Toyota Motor Manufacturing, U.S.A. (TMM) is deviating from the standard assembly line principle of jidoka in an attempt to avoid expenses incurred from stopping the production line for seat quality defects. This deviation has contributed to the inability to identify the root cause of the problem, which has led to decreased run ratios on the line and an excess of defective automobiles in the overflow lot for multiple days. If this problem isn’t fixed quickly, an increased amount of waste will continue to be incurred and customer value will be threatened.…

    • 1299 Words
    • 6 Pages
    Better Essays
    Read More
  • Powerful Essays

    The Affect of Change in Leadership
    • 1425 Words
    • 6 Pages

    The Affect of Change in Leadership

    Leadership is an area of growth. The person in a leadership position is set to guide the minds of the people beneath him or her. The only way that a leader can do that is by living vicariously through the members’ work experiences and remaining positive. A positive leader is motivated for successes and failures and encourages his team members to do the same. His or her vision is mostly optimistic and visionary. In this case, the need for a leader to be ever-changing is seriously important. This attitude of change is contagious and should reflect the attitude of any organization. When an attitude of change is not reflective in the organization, it may stifle growth. The key is to find a way to make the planted seed a tall tree. Even more important, the small and large organizations use the new tall tree and how does its place affect the environment around it?…

    • 1425 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Country of Origin Effect: A Comparative Research of Toyota and PSA Peugeot Citroen
    • 7048 Words
    • 29 Pages

    Country of Origin Effect: A Comparative Research of Toyota and PSA Peugeot Citroen

    Liker, J., 2004, The 14 Principles of the Toyota Way: An Executive Summary of the Culture Behind TPS, [online], pp. 37,…

    • 7048 Words
    • 29 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Toyota Way
    • 643 Words
    • 3 Pages

    Toyota Way

    :The Principle :Form vs. Function of Teams Developing Excellent Individual Work While Promoting Effective Team Work Launching a Toyota Facility in North America: One Shot at Getting the Culture Right Developing Teams at Toyota: Not a One-Minute Proposition Work Groups Are the Focal Point for Solving Problems At Toyota, Everything You Learned in School About Motivation Theory Is Right People Drive Continuous Improvement…

    • 643 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Lean Manufacturing: Toyota Production System

    • 1035 Words
    • 5 Pages

    Lean Manufacturing: Toyota Production System

    Lean Manufacturing and the Toyota Production System The use of the term "Lean", in a business or manufacturing environment, describes a philosophy that incorporates a collection of tools and techniques into the business processes to optimize time, human resources, assets, and productivity, while improving the quality level of products and services to their customers. Becoming "Lean" is a commitment to a process and a tremendous learning experience should you attempt to implement Lean principles and practices into your organization. The term Lean in the manufacturing environment also refers to the Toyota Production system established by the Toyota Corporation. Within the organization, four prominent gentlemen are credited with developing the system: Sakichi Toyoda, who founded the Toyoda Group in 1902; Kiichiro Toyoda, son of Sakichi Toyoda, who headed the automobile manufacturing operation between 1936 and 1950; Eiji Toyoda, Managing Director between 1950 and 1981 and Chairman between 1981 and 1994; and Taiichi Ohno, the Father of the Kanban System. Sakichi Toyoda invented a power loom in 1902 and in 1926 an automatic loom capable of detecting a snapped thread that automatically stopped the loom thus preventing production of poor quality. That same year, 1926, he founded the Toyoda Automatic Loom Works that manufactured automatic looms. In 1937, Sakichi sold his automatic loom patents to a company in England to finance an automobile manufacturing operation with his son Kiichiro managing the new venture. At the same time in Yokohama, Japan, the Ford Motor Company was building Model A cars and trucks with mixed models in a plant converted over from the Model T. At this time, Ford was the largest manufacturer of automobiles in Japan with General Motors as the second largest manufacturer, together producing over 90% of the vehicles manufactured in Japan. The new automotive venture for the Toyoda Group was risky. Kiichiro Toyoda, the son of Sakichi, who possessed a…

    • 1035 Words
    • 5 Pages
    Good Essays
    Read More
  • Good Essays

    Ford motor company: supply chain strategy
    • 727 Words
    • 3 Pages

    Ford motor company: supply chain strategy

    Since the Ford Motor Company's incorporation by Henry Ford in 1903, its strategic focus has remained on automobile design and manufacturing. Up until 1970, competition was from the two other manufacturers making up the Big Three Automakers; General Motors and Chrysler. However, starting in the 1970's, foreign competition, mostly from Toyota and Honda, eventually lead to overcapacity within the industry. As more and more developing and industrial nations encouraged development into the automobile industry, overcapacity in the automobile markets reached an estimated 20 million vehicles.…

    • 727 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    Analyzing of supply chain drivers on example of Toyota Company.
    • 1968 Words
    • 9 Pages

    Analyzing of supply chain drivers on example of Toyota Company.

    In order to understand how Toyota Company have improved its supply chain performance in terms of responsiveness and efficiency, we should examine four supply chain drivers: inventory, transportation, facilities and information. Above-mentioned drivers not only determine the supply chain's performance in terms of responsiveness and efficiency, they also determine whether strategic fit is achieved across the supply chain.…

    • 1968 Words
    • 9 Pages
    Good Essays
    Read More
  • Best Essays

    Toyota
    • 2814 Words
    • 12 Pages

    Toyota

    This report gives out a brief outlook on the Management of Human and Technological elements of Toyota, while justifying the most important element when considering the next five to ten years.…

    • 2814 Words
    • 12 Pages
    Best Essays
    Read More
  • Good Essays

    Kaizen
    • 1137 Words
    • 5 Pages

    Kaizen

    Kaizen concentrates at improving the process rather than at achieving certain results. Such managerial attitudes and process thinking make a major difference in how an organization masters change and achieves improvements.…

    • 1137 Words
    • 5 Pages
    Good Essays
    Read More

Related Topics