Toyota Production System: Crisis and Adjustments

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Table of Contents

The key drivers to the success of Toyota before the crisis
The primary causes of this crisis
The adjustment of Toyota after the crisis

The key drivers to the success of Toyota before the crisis

Production and operations management

The actual production and delivery of products including the operational management was essential to the success of Toyota. The company’s product design incorporated product process, planning and implementing production processes as well as acquiring and organizing resources.

With this broad scope, the production and operation functions had a fundamental role in the company’s ability to attain the set goals and objectives before the crisis. Besides, the operations managers were familiar with the concepts and issues that surrounded the functional area.

The basic performance objectives that pertained to all operations including quality, speed, flexibility, dependability and cost were well planned and realized. Thus, Toyota Company was successful in meeting these objectives through its production and operation function.

Over decades, Toyota operations were streamlined thus resulting in the popularly known Toyota Production System (TPS). The TPS was conceived when the company realized that producing massive quantities from limited product line to achieve maximum economies of scale led to flaws.

Its major objectives were to reduce cost, eliminate waste and respond to the changing needs of the customers. Under this system, quality was considered as doing things right via the provision of error free products that satisfied the targeted customers. Conversely, Toyota vehicles were among the leading brands in customer satisfaction.

Voting Toyota as the best annual vehicle by most marketplace reviews indicated that the company had an appealing reputation globally. Due to good quality, Toyota success had kept growing and in 2009 the company was the best worldwide. Moreover, Toyota was keen on producing quality vehicles with many technologies that improved the performance of the vehicles.

The TPS method applied during operation focused on the reduction of complications via the use of undersized and uncomplicated machineries that were elastic and strong. On the other hand, rescheduling run and outline to promote plainness enhanced the pace of manufacturing and assembling Toyota vehicles.

Another driver to the success of Toyota was dependability, which implied timely working to ensure that customers got their products within the promised time. Toyota had included just in time manufacturing method comprising of experienced employees who worked in cooperation while the Kanban management assisted the team in delivering manufactured goods and services as guaranteed.

Every worker, mechanical expert, and director was concerned with the improvement of value and effectiveness of Toyota vehicles. The organization admired making adjustments while developing receptive and supple structures that helped in dealing with the changing trade settings. Inside the company’s production area, Toyota Corp had the ability to attain large-scale flexibility whilst manufacturing tiny product bunches that hardly generated any value or output loss.

Team working in TPS

From this case, the corporation emerged to be among the few vehicle producers in the automobile industry, which constantly generated profits during and subsequent to the 1974 oil disaster. Due that crisis, producers that rivaled Toyota envied and visited the company in order to find out the reasons behind Toyota’s triumph in the declining souk environment.

The company’s discovery was the unique team working of the Japanese who utilized scientific management rules. Japanese team working was very dissimilar to that which became prominent in the American and European companies in the 1960s and 1970s. The Japanese team working usually referred to as Toyotaism implied a certain form of work organization that emphasized on lean production.

The technique combined the JIT creation methods; dilemma-resolving groups, job consistency, as well as influential first-line administration and nonstop but succeeding Toyota process step up. All these drivers contributed to the success of Toyota before the crisis.

The JIT manufacturing scheme attempted to accomplish the clients’ requests devoid of generating any waste products while offering faultless value. Organization and scheduling of various Just in time approaches took into consideration draw arrangement, staged forecasting, Kanban organization, flow harmonization, and assorted reproduction development.

Besides, Toyota was one of the biggest players in transforming Japan into being a kingpin in automotive production. Other companies which had adopted the company’s production system increased efficiency and productivity. Thus, Toyota was developing over the years since the industry’s analysis of the best plant winners showed that the company used lean manufacturing techniques extensively.

The primary causes of this crisis

The Toyota Corp experienced a crisis in the fiscal 2010 subsequent to its vehicles being involved in industrial accident. The quality of Toyota started to fall impulsively despite attaining its 2010 Global Vision. With the potential fatal defects, it was essential for the Corporation to stop its manufacturing in several areas and recall back cars ranging to more than a million.

The TMC crisis arose primarily due to the inability of the company to manage its quality given the hurried expansion and unique production philosophy. Besides, Toyota’s poor quality production increased following the Second World War that left the company with competitive disadvantage. Conversely, Toyota Corp was suffering from financial problems while struggling with quality problems. In a war- desolated economy, Toyota considered it necessary to exploit low costs while producing a wide range of vehicles.

Nevertheless, the competency that drove the American giant car manufacturers was inappropriate for car fabrication in Japan thus generating crisis. The American techniques highlighted large consignments made on specialized machines. Hence, the crisis augmented due to little capital meant for business venture after the warfare. That is, the system proved not to be cost-effective particularly for low-volume demand.

The crisis also came due to surplus rework needed during the production of faulty products and surplus inventory of finished products, work in progress, and raw materials. In addition, the deprived product and instrument design resulting into the erroneous over-production and overindulgent movement of products past the necessary production procedure also caused the crisis.

Finally, the pointless waiting of tools and personnel for the subsequent production and over manufacturing ahead of demand are some wastes that increased the Toyota crisis.

The adjustment of Toyota after the crisis

In case of a major crisis, Toyota should adjust by shutting down its production or operations in areas that were affected most and particular products that underperformed in such a situation. For example, during the 2008 financial crisis the company closed down its production of large vehicles for some time and switched the factory that produced SUVs into that which produced Priuses.

This adjustment was also evident during the Japanese earthquakes when Toyota suspended its operation in plants within the affected region. The company should also respond by eliminating some of its workforce especially the temporary workers in the affected facilities. This included extending leaves and making such employees work on part time basis. Toyota may similarly minimize the remuneration for plant managers and reduce bonus for every salaried workforce.

Since the crisis affected Toyota employees and customers directly, the company should ensure that the stakeholders are aware of the changes. When crisis ends, Toyota should establish a committee that takes the opinions of employees and customers in the affected areas in order to determine the most appropriate crisis adjustment strategies.

The committee should be responsible for devising methods to explain the reasons for the adjustments and the benefits they have for the stakeholders. The employees should be given options to extend their leaves or get assistance to secure other jobs. Through this strategy, Toyota will maintain good relationship with customers and employees affected by the crisis.

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