Toyota has grown to a large multinational corporation from where it started, and expanded
to different worldwide markets and countries by becoming the largest seller of cars in the
beginning of 2007, the most profitable automaker along with increasing sales in, among
other countries, the United States. Toyota brands include Scion and Lexus and the
corporation is part of the Toyota Group.
The Toyota Production System (TPS) is a production system steeped in the philosophy of
the complete elimination of all waste and that imbues all aspects of production with this
philosophy in pursuit of the most efficient production method. Toyota Motor Corporations
vehicle production system is a way of making things that is sometimes referred to as a lean
manufacturing system and has come to be well known and studied worldwide. This
production control system has been established based on many years of continuous
improvements, with the objective of making the vehicles ordered by customers in the
quickest and most efficient way, in order to deliver the vehicles as quickly as possible.
Toyota has introduced new technologies including one of the first mass-produced hybrid
gas-electric vehicles, Advanced Parking Guidance System, a four-speed electronically
controlled automatic with buttons for power and economy shifting, and an eight-speed
automatic transmission. Toyota, and Toyota-produced Lexus and Scion automobiles have
consistently ranked near the top in certain quality and reliability surveys.
Toyota is one of the largest companies to push hybrid vehicles in the market and the first to
commercially mass-produce and sell such vehicles, an example being the Toyota Prius.
The Prius has become the top selling hybrid car in America. This technology is the most
widely tolled-out environment-friendly system in the automotive industry to date. Toyotas
CEO has committed to making every Toyota a hybrid vehicle eventually. Hybrids are
viewed by some automakers as a core segment of the future vehicle market.
Another success factor for Toyota is that it offers a full line of cars for the U.S. market,
from family sedans to sport utility vehicles to trucks to minivans. Toyota also has products
for different price points, from lower-cost Scions to mid-priced Camrys to the luxury
Lexus. Designing these different products means listening to different customers, building
the cars they want, then crafting the marketing to reinforce each makes image.
Along with its reputation for building a quality vehicle, Toyotas keys to success include a
flexibility its U.S. rivals dont have. A big reason for Toyotas success is its manufacturing.
Toyotas combination of manufacturing speed and flexibility is world class. Its plants can
make as many as eight different models at the same time, which brings Toyota huge
increases in productivity and market responsiveness.
While many things have changed over time, the same founding spirit has always guided
Toyota throughout its 70-year history. That is to never forget the spirit of its founding, and
create a new history that puts the customer first.
In the last few months of 2007, Toyota had been beset by a variety of troubles, including
departures from its North American unit by several top executives; slumping sales; and
condemnation from environmentalists, whove challenged the companys commitment to
fighting global warming. Most serious have been rising concerns over the reliability of
Toyotas vehicles. A series of high-profile recalls in the last couple years have also
tarnished the Toyota Production System, long the envy of the world. Toyota has
downplayed many of its problems, contending that as it continues to prosper, more and
more people are quick to criticize it.
Due to its size and growth, Toyota has felt particularly vulnerable to any possible trade
retaliation. Like many Asian carmakers, Toyota has hired Washington lobbyists and
invested billions in new plants in the United States in hopes of avoiding the sort of
criticism it faced during the Japanese-American trade friction in the early 1990s.
Toyota is bent on becoming the top-selling car company in the world, and as it hits the gas
pedal on growth, its obviously finding it tough to maintain its usual standards for quality.
Growth at a high rate, for an extended period is anything but healthy. It makes a business
exceedingly vulnerable. It makes it all but impossible to manage it properly. It creates
stresses, weaknesses, and hidden defects, which at the first slight setback, become major
crises.
Toyota needs to watch out for themselves. Rather than thinking about other companies,
Toyota needs to satisfy their worldwide customers, and there is plenty for them to do. The
company needs to be extra attentive to the dependability of its products as it keeps
growing, and executives have imposed even tougher quality-control methods in light of its
recent difficulties.
Breakthrough innovation is only one aspect of the companys culture. Possibly the most
important aspect is Toyotas relentless application of the more mundane process of
continuous improvement. The company has proven that its adept at learning from its
mistakes, determining the root cause of problems, providing effective countermeasures,
and empowering people to implement those measures. For all these reasons its a pretty
good bet that Toyota will restore its reputation fro quality in the next couple of years and
also get where its trying to go, distancing itself from GM to become the undisputed king of
the auto industry.
Even though Toyota is on track to surpass General Motors as the worlds biggest car
company, managers shouldnt necessarily be jubilant. Their success does not mean that
theyve stopped looking for new ways to make production better and more efficient.
Toyota should continue with its current marketing tactics. Management feels strongly
