The Toyota Motor Corporation is one of the world’s biggest and most favourable automobile manufacturers (Borowski). It is the leader in environmentally friendly and technologically advanced cars. The official start up for Toyota was in 1937, as Kiichiro Toyoda launched the Toyota Motor Company. In 1952 Toyota exponentially grew to become successful. The company started to export cars to South America.
Five years later the company gained ground on the North American market. Entering the US – market was for a breakthrough for Toyota in terms of automobile – exports. In 1982 Toyota Motor Company and Toyota Motor Sales Company joined forces to Toyota Motor Corporation (TMC).
The company now has 522 subsidiaries, over 320 thousands staff worldwide and is producing not only in the 12 Japanese factories but also in 51 other locations in 26 countries. Toyota Motor Corporation had the highest share price value of all car manufacturers in 2007. In 2008 Toyota had total unit sales of 8.972 million cars and had an annual turnover of 239.4 billion US – Dollars. In the same year it adopted the status of “The biggest automobile – manufacturer” (Borowski).
Today Toyota is no longer the No. 1 automobile manufacture because of the financial crises since 2007 and their image has been damaged due to massive global recalls over sticking gas pedals (Borowski). Internal environment The internal environment of an organization is based on elements within the organization. It contains things like the organization’s structure and culture, its human relations policies and procedures and the skills and experiences of the staff.
The Board of Directors in Toyota’s executive body and consists of 26 directors that comprise of the chairman, the vice chairman, the president, 8 executive vice presidents, 13 senior managing directors, an honorary chairman and a senior advisor. The Toyota Motor Corporation has achieved a lot of goals throughout its history, but to retain its success they have to become more of a team.
For that reason TMC developed a lot of techniques to production and employees, these techniques are often used in other companies or countries. Toyota is manufacturing its cars with the Toyota production System, it is based on “just in time” principles. So they have to trust every employee (Morgan and Jeffrey). The employee is of importance because even a line worker has the power to stop a manufacturing line.
If he or she sees a problem they can stop the manufacturing line and on the other hand there is a risk of higher costs incurring should the lines be stopped. The most important aspect in a large and successful organization like TMC is the communication within the organization, as well as the communication between the customers and business partners.
Therefore, Toyota adopted a new philosophy in 1992. There are seven guiding principles which affect Toyota’s actions and reflect its unique management philosophy. Technology As one of the biggest car manufacturers TMC spend a large amount of money to guarantee technologically advanced and high quality products. In 12009 Toyota invested 9.8 billion US – Dollars in its research and development department.
TMC is deemed to be the innovator of the hybrid trend. The Prius was the first car with the electro hybrid drive and since entering the market this car has won twelve “Engine of the Year Awards” (Morgan and Jeffrey). Toyota has a leading position in the eco – friendly car segment since the last seven years. It was a true example of success within the eco – friendly market. Since January 2010, TMC is adversely affected by a series of breakdowns as a result of the massive global; recalls over sticking gas pedals.
The organization anticipates a flood of lawsuits amounting to dozens of billions US – Dollars. Marketing Toyota is the most valuable car brand in the world, with a brand value of 58 billion US – Dollars. TMC is not only focused on general advertisement such as TV and radio, but they also focus on charity activities, motor sports, movies and many others (Borowski).
The brand name is a representative of eco – friendly, beloved, efficient and dynamic cars. The logo of the company consists of three bonded ellipses, this symbolizes Toyota’s philosophy: the Ambition for customer satisfaction, innovation and the fusion of quality and creativity (Borowski). Toyota supply chain system Toyota is well known for its approach to problem solving and continuous improvement (Ananth, Sridhar and Roy).
Toyota is a global auto company with many products across the globe with different characteristics that warrant different supply chain configurations. In addition, differences among the Toyota, Lexus, and Scion vehicles warrant different supply chain processes. Performance at Toyota is evaluated with equal weight given to both the process used to derive performance and the results achieved.
This process aims to generate balance of key supply chain parameters – variety of products offered, velocity of product flow, variability of outcomes against forecast, and visibility of processes to enable learning. The automotive supply chain is very complex and consists of many processes that, when linked together, form a supply chain from the customer back to the various tiers of suppliers. The physical processes consist off the production of parts at the suppliers.
The physical process consists of the production of parts at the suppliers, transportation of these parts to the assembly plant of the original equipment manufacturer, assembly of parts into a complete vehicle, distribution of completed vehicles to dealers, and finally delivery to a customer.
In addition, to physical processes, there are both preproduction and day to day operational support processes. To fully understand these processes, some background on the auto industry is necessary. The following questions need to be answered; what is the product? Who are customers? What are the distribution models? (Ananth, Sridhar and Roy).
Toyota supply chain Towards the end of the first revolution, the manufacturing industry saw many changes, including a trend towards a wide product variety. To deal with these changes, firms had to restructure their supply chains to be flexible and efficient. The supply chains were required to deal with a wider product variety without holding too much inventory. The Toyota Motor Company successfully addressed these concerns.
The course of action The Toyota Company should come up with ideas that allow the final assembly and manufacturing of key components to be done in – house. The bulk of the components should be sourced from a large number of suppliers who are part of the Keiretsu system. This refers to a set of companies with interlocking business relationships and shareholdings. The TMC should develop long term relationships with all her suppliers.
Essentially, these suppliers should be located very close to the Toyota plant assembly plants in order to facilitate the smooth flow of products within and without the company. However, despite the fact that there are challenges which are likely to be experienced by the company, it is important for the management to come up with more strategies which would ensure that the various products are produced at cost effective costs.
Excellence in product development Given the dramatic changes in the automotive product development environment, it is obvious that a strong product development system is a crucial core competence and fundamental to the success of any consumer driven component.
The growing complexity of the modern automobile, along with the changes which are taking place within this century implies that it is a high time that the company established several approaches which are going to ensure that the TMC products are quality products which have an edge in the market.
The company’s system should be in a manner that it ensures that new products which match the customer needs within a region are on top of the production list. Essentially, it is worth noting that it might be challenging to produce products which cut across the needs of the entire consumer demand.
However, owing to the nature of the competitors, the company should establish a strategy that ensures that the strategies which are put in place meet the objectives and goals of a given plant. Plant location As a multinational company, Toyota should seek to establish plants across the globe. This will ensure that it has the capacity and the ability to reach needs of the consumers across the globe.
The global business strategy should be a major tactic for Toyota to keep consumers driving its products from generation to generation. This will call for launching slogans which respond to the regional consumer needs. By undressing the image of Japanese cars overseas, Toyota’s strategy will create a mirror of new indigenous products, which will be managed, designed, assembled and driven by the local people.
This strategy should work if the local people feel comfortable with the products. Furthermore, the products which will be developed should be according to the local conditions, especially weather conditions and economic infrastructures. By meeting the needs of the locals, Toyota will be in a position of spreading across the globe with the trademark brand Toyota.
Ananth, Iyer, Seshadri Sridhar and Vasher Roy. Toyota supply chain management:a strategic approach to the principles of Toyota’s renowned system. California: McGraw-Hill Professional, 2009. Print.
Borowski, Arkadi. Report on the Toyota Company. Norderstedt: GRIN Verlag, 2010. Print.
Morgan, James and Liker Jeffrey. The Toyota product development system:integrating people, process, and technology. New York: Productivity Press, 2006. Print.