Weakness of Toyota

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Japan's smooth operators:But does lean production damage the brand? Strategic Direction. Bradford:2007. Vol. 23, Iss. 4, p. 10

Abstract (Summary)
This paper reviews some of the advantages and potential disadvantages of lean production in the Japanese automotive industry. This briefing is prepared by an independent writer who adds their own impartial comments. According to the experts, 2006 saw Toyota become the world's largest automobile manufacturer in the world, knocking General Motors (GM) off the top spot. It is a big leap from the situation in 1950, when Toyota produced 11,706 units per annum compared to GE's 8,000 units per day. The cause of this switch in position? Smooth operation. Heavy operating losses have forced GM to downsize, whereas Toyota has its highly efficient manufacturing system to thank for its ongoing rise. The paper suggests that adopting practices of lean production in the automotive industry reaps considerable financial and environmental rewards, but poses difficulties in making an impact on buyers in the prestige market. The paper weighs up the virtues of lean production in terms of the environment and costs against the potential negative impact of lean production on brand image. It thus provokes thought on how the best of both goals might be achieved.

Full Text (1360 words)

Copyright Emerald Group Publishing Limited 2007

According to the experts, 2006 saw Toyota become the world's largest automobile manufacturer in the world, knocking General Motors (GM) off the top spot. It is a big leap from the situation in 1950, when Toyota produced 11,706 units per annum compared to GE's 8,000 units per day. The cause of this switch in position? Smooth operation. Heavy operating losses have forced GM to downsize, whereas Toyota has its highly efficient manufacturing system to thank for its ongoing rise.

How to keep lean

Toyota, like other Japanese car makers, has learned the benefits of developing a policy of lean production. The idea is that manufacturing processes are continually tweaked to ensure efficient and cost-effective production with the very minimum of waste. To achieve this much effort goes into error prevention, so that designs do not have to be reworked further down the line, and into making sure the different processes involved in production work well together. Materials flow continually through the system as required and thus customer demand is met but there is little need to hold a large inventory of stock.

It is not something that is easily mastered. As well as having designs and machinery that are reliable and consistent, communication and management are vital components of the successful system. Contact with suppliers is very frequent, and ideally manufacture should be organized so that parts flow regularly and in similar volumes into the plant. Suppliers should know what to expect and when: an open relationship improves business practice and cuts wasted time in waiting for parts. Similarly, the production plant should keep close contact with managers of the retail stores. If salesmen know levels of stock and its specifications then they can subtly manipulate the potential purchasers into opting for models that fit current production levels. These lines of communication, then, cannot be overlooked in planning lean production.

Subaru in Indiana is another car manufacturer that has managed to go completely waste-free. It began with on-site recycling initiatives from staff - collecting newspapers, soda cans, corrugated packaging and so on - and, through more and more suggestions as to how recycling could be improved, the whole plant now produces no waste at all. Some alterations had to be made as to the parts used on the plant and time and effort has gone into working out how all previous waste products could be recycled or reused, but the end result is as cost-effective as it is environmentally friendly and inspirational.

Top executives at the firm...
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