Operation Strategy of Toyota

Topics: Toyota, Hybrid electric vehicle, Toyota Production System Pages: 8 (2034 words) Published: August 27, 2008
Toyota is Japan's biggest car company and the second largest in the world after General Motors. It produces an estimated eight million vehicles per year, about a million fewer than the number produced by GM. The company dominates its home market, with about 40% of all new cars registered in 2004 being Toyotas. Toyota also has a large market share in both the United States and Europe. It has significant market shares in several fast-growing South East Asian countries. The - 1 -company produces a large range of vehicles which are highly regarded for their quality, engineering, and value; their designs set global standards for safety, reliability and ease of maintenance. The Company Philosophy

"Do the right thing for the company, its employees, the customer and the society as a whole." Origins
The story of Toyota Motor Corporation began in September 1933 when Toyoda Automatic Loom created a new division devoted to the production of automobiles under the direction of the founder's son, Kiichiro Toyoda. Soon thereafter, the division produced its first Type A Engine in 1934, which was used in the first Model A1 passenger car in May 1935 and the G1 truck in August 1935. Production of the Model AA passenger car started in 1936. Although the Toyota Group is best known today for its cars, it is still in the textile business and still makes automatic looms (fully computerized, of course), and electric sewing machines which are available worldwide. During the Pacific War, the company was dedicated to truck production for the Imperial Army. Because of severe shortages in Japan, military trucks were kept as simple as possible. For example, the trucks had only one headlight in the center of the hood.

Toyota earns $1250 per vehicle produced while GM loses $2311 per vehicle produced. Toyota is producing nearly 50 percent more cars than in 2001 and this year it will almost certainly pass General Motors to become the world's largest auto company. Toyota alone earned more than all the rest of the world's 12 largest auto manufacturers combined - $11.4 billion. And it is pioneering a new technology for the 21st century that will shrink gasoline consumption and limit greenhouse gases. FORTUNE GLOBAL 500 (Year 2005)

Toyota Motor
Rank: 7 (2004 Rank: 8)
Employees: 265,753
$ millions% change from 2003
Revenues172,616.3 12.7
Profits10,898.2 5.9
Assets227,512.9 --

RankCompany500 RankRevenues ($ millions)
1. General Motors5 193,517
2. DaimlerChrysler6 176,688
3. Toyota Motor7 172,616
4. Ford Motor8 172,233
5. Volkswagen15 110,649
6. Honda Motor27 80,487
7. Nissan Motor29 79,800

Toyota operation strategy:
The Toyota sales figures were skyrocketing, even their competitors were losing out in almost all markets. It is a matter of concern for all the automobile companies to regain their lost market share. Market capitalisation says it all. Toyota is worth more than the American Big Three put together, and more than the combination of its successful Japanese rivals, Nissan and Honda. The Toyota way of production was discussed throughout the world, with lots of research being undertaken. The company's success is mainly due to the implementation of the following: - 1. Toyota Production System

2. Re-engineering
3. Superior Technology & Quality
4. Hybrid Vehicles
5. Employee Welfare Costs
6. Employee Satisfaction

1. Toyota Production System
Toyota Production System, also read as Thinking Production System, makes use of the following vital elements, namely, • Lean Manufacturing
• Just-In-Time
• Kaizen
• Jikoda
• Kanban
• Andan
• Pull System
1.1. Lean Manufacturing
Lean production is aimed at the elimination of waste in every area of production including customer relations, product design, supplier networks and factory management. Its goal is to...
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