Toyota Production System

| February 5, 2015

2000 words one question inkl. sources.

1. Using the material, tools and any other case studies discussed in class, analyze the global automotive environment to present the arguments for and against Toyota trying to achieve its ambition to be the biggest global car manufacturer without resorting to major network alliances or acquisitions.

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Case study Toyota: does it rely too heavily on production for world leadership? Over the past 30 years, Toyota Motor Corporation has become the world’s leading car company. Much of its success has come from its highly respected manufacturing systems. But the company found itself in trouble in 2010 from quality issues related to production. Has the company relied too heavily on the Toyota Manufacturing System? To understand this case fully, it needs to be read in conjunction with the main cases on the global car industry published in Richard Lynch, Strategic Management, 6th Edition Background In the year to end-June 2004, Toyota produced and sold over 6.5 million vehicles around the world.i The company had only started car production in the 1930s. Even in the early 1950s, it was still only averaging 18,000 vehicles per annum.ii The increase in production and sales between 1950 and 2004 was, by any standards, remarkable – Figure 1 shows the data for 2004. Toyota’s strategic problem was that it was a tiny company competing against large competitors. The only way that it could survive was by finding new, flexible production methods that could be used by smaller companies. ‘The Toyota Production System originated as a means of achieving mass production efficiencies with small production volumes’ (Toyota Annual Report and Accounts 1998). Importantly, even in 2004, the major Toyota production location was Japan – from a strategy perspective, this raises important questions about how long its Japanese factories can remain low-cost centres of production. Many of the production successes between 1950 and 1980 have been accredited to the Toyota Production System and its chief engineer during that time, Taiichi Ohno. He started experimenting to improve production in the late 1940s, but it took many years to develop the systems described below, such as kaizen and kanban, and to have them widely adopted across the company. Even in the 1990s, experimentation and change were still…


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