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Course facilitator
Dr. Hima Gupta
Submitted by:
Group No:6
Jitendra Nailwal (09609092)
Jaya Mamta Prosad (09609093)
Pulkit Khurana (09609095)
Ankita Jain (09609098)
Tanvi Jain (09609102)
Chandeep Singh Nanda (09609103)
Nupur Pandey (09609104)
Sakshi Malhotra (09609105)
Sadanand Ojha (09609106)
Shimpy Chhabra (09609111)

Table of Contents
1
 Scope of the study…………………………………………..………..….3

 Objectives……………………………….…………………..…………..5

 Source Of data…………………………………………………………...6

 Summary of Research Papers…………………………………………….7

 JIT in TOYOTA…………………………………………………..7

 JIT Manufacturing Systems……………………………………….9

 JIT in TOYOTA rules in use for building self diagnostic adaptive


work-
systems……………………………………………………..11

 Understanding from the study…………………………………………..15

 Goal of JIT in Toyota…………………………………………….16

 Limitations of JIT as applied to Toyota………………………….17

 SWOT
Analysis…………………………………………………..18

 Future plans……………………………………………………………..21

 Conclusion………………………………………………………………22

 Learnings………………………………………………………………..23

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Scope of the study

Toyota Motor Corporation , commonly known simply as Toyota and abbreviated as TMC,
is a Japanese multinational corporation headquartered in Toyota, Aichi, Japan. In 2009,
Toyota Motor Corporation employed 71,116 people worldwide (total Toyota 320,808).TMC
is the world's largest automobile manufacturer by sales and production.

The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's
company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a
department of Toyota Industries, it created its first product, the Type A engine, and, in 1936,
its first passenger car, the Toyota AA. Toyota Motor Corporation group companies are
Toyota (including the Scion brand), Lexus, Daihatsu and Hino Motors,[7] along with several
"non-automotive" companies. TMC is part of the Toyota Group, one of the largest
conglomerates in the world.

Toyota Motor Corporation is headquartered in Toyota City, Aichi and in Tokyo. In addition
to manufacturing automobiles, Toyota provides financial services through its Toyota
Financial Services division and also builds robots.

The Toyota Motor Company received its first Japanese Quality Control Award at the start of
the 1980s and began participating in a wide variety of motorsports. Due to the 1973 oil crisis,
consumers in the lucrative US market began turning to small cars with better fuel economy.
American car manufacturers had considered small economy cars to be an "entry level"
product, and their small vehicles employed a low level of quality in order to keep the price
low.

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‘TQM’ is a management approach of an organization, centered on quality, based on the
participation of all its members and aiming at long-term success through customer
satisfaction, and benefits to all members of the organization and to society."

In Japanese, TQM comprises four process steps, namely:

1. Kaizen – Focuses on Continuous Process Improvement, to make processes visible,


repeatable and measureable.
2. Atarimae Hinshitsu – Focuses on intangible effects on processes and ways to optimize
and reduce their effects.
3. Kansei – Examining the way the user applies the product leads to improvement in the
product itself.
4. Miryokuteki Hinshitsu – Broadens management concern beyond the immediate product.

TQM requires that the company maintain this quality standard in all aspects of its business.
This requires ensuring that things are done right the first time and that defects and waste are
eliminated from operations.

‘Just-in-time' is a management philosophy and not a technique. It originally referred to the


production of goods to meet customer demand exactly, in time, quality and quantity, whether
the `customer' is the final purchaser of the product or another process further along the
production line. It has now come to mean producing with minimum waste. "Waste" is taken
in its most general sense and includes time and resources as well as materials. Elements of
JIT include:

• Continuous improvement.
o Attacking fundamental problems - anything that does not add value to the
product.
o Devising systems to identify problems.
o Striving for simplicity - simpler systems may be easier to understand, easier to
manage and less likely to go wrong.

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o A product oriented layout - produces less time spent moving of materials and
parts.
o Quality control at source - each worker is responsible for the quality of their
own output.
o Poka-yoke - `foolproof' tools, methods, jigs etc. prevent mistakes
o Preventative maintenance, Total productive maintenance - ensuring machinery
and equipment functions perfectly when it is required, and continually
improving it.
• Eliminating waste. There are seven types of waste:
o waste from overproduction.
o waste of waiting time.
o transportation waste.
o processing waste.
o inventory waste.
o waste of motion.
o waste from product defects.
• Good housekeeping - workplace cleanliness and organisation.

Objective
The main objective is to study Toyota’s approach in applying:
• Total quality management
• Just in time

The basic elements of JIT were developed by Toyota in the 1950′s, and became known as the
Toyota Production System (TPS).The chief engineer Taiichi Ohno, a former shop manager
and eventually vice president of Toyota Motor Company at Toyota in the 1950s examined
accounting assumptions and realized that another method was possible. The factory could be
made more flexible, reducing the overhead costs of retooling and reducing the economic lot
size to the available warehouse space.

Over a period of several years, Toyota engineers redesigned car models for commonality of
tooling for such production processes as paint-spraying and welding. Toyota was one of the
first to apply flexible robotic systems for these tasks. Some of the changes were as simple as
standardizing the hole sizes used to hang parts on hooks. The number and types of fasteners
were reduced in order to standardize assembly steps and tools. In some cases, identical
subassemblies could be used in several models.

Toyota engineers then determined that the remaining critical bottleneck in the retooling
process was the time required to change the stamping dies used for body parts. These were
adjusted by hand, using crowbars and wrenches. It sometimes took as long as several days to
install a large (multiton) die set and adjust it for acceptable quality. Further, these were
usually installed one at a time by a team of experts, so that the line was down for several
weeks.

Toyota implemented a program called Single Minute Exchange of Die (SMED). With very
simple fixtures, measurements were substituted for adjustments. Almost immediately, die
change times fell to about half an hour. At the same time, quality of the stampings became

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controlled by a written recipe, reducing the skill required for the change. Analysis showed
that the remaining time was used to search for hand tools and move dies. Procedural changes
(such as moving the new die in place with the line in operation) and dedicated tool-racks
reduced the die-change times to as little as 40 seconds. Dies were changed in a ripple through
the factory as a new product began flowing.

After SMED, economic lot sizes fell to as little as one vehicle in some Toyota plants.
Carrying the process into parts-storage made it possible to store as little as one part in each
assembly station. When a part disappeared, that was used as a signal to produce or order a
replacement.

JIT was firmly in place in numerous Japanese plants by the early 1970′s. JIT began to be
adopted in the U.S. in the 1980′s.

Sources of data

• www.hbs.edu/research/facpubs/workingpapers/papers2/.../02-043.doc

• http://www.oppapers.com/subjects/tqm-toyota-page1.html

• top-pdf.com/toyota-and-tqm.html

• http://www.1000advices.com/guru/processes_lean_tps_7principles.html

• http://en.oboulo.com/total+quality+management+and+toyota

• http://books.google.co.in/books?
id=TxJNaPkuc4oC&pg=PA203&lpg=PA203&dq=TQM+an+JIT+at+toyota&source=
bl&ots=BlFnLNH5iH&sig=Bdi3JG29SXka0v3Zq5TY4EcQLK4&hl=en&ei=SjgHTa
D5H4mzrAfkzcWDDg&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBUQ
6AEwADgU

• sspear@hbs.edu ( working paper 02-04,Steven Spear )

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Citation from research papers

JIT IN TOYOTA
In today’s competitive world shorter product life cycles, customers rapid demands and
quickly changing business environment is putting lot of pressures on manufacturers for
quicker response and shorter cycle times. Now the manufacturers put pressures on their
suppliers. One way to ensure quick turnaround is by holding inventory, but inventory costs
can easily become prohibitive. A wiser approach is to make your production agile, able to
adapt to changing customer demands. This can only be done by JUST IN TIME (JIT)
philosophy. JIT is both a philosophy and collection of management methods and techniques
used to eliminate waste (particularly inventory).
This technique was first used by the Ford Motor Company as described explicitly by Henry
Ford‘s My Life and Work (1922).

The technique was subsequently adopted and publicised by Toyota Motor Corporation of
Japan as part of its Toyota Production System (TPS).

Japanese corporations could afford large amounts of land to warehouse finished products and
parts. Before the 1950s, this was thought to be a disadvantage because it reduced the
economic lot size. (An economic lot size is the number of identical products that should be
produced, given the cost of changing the production process over to another product.) The
undesirable result was poor return on investment for a factory. Also at that time, Japanese
companies had a bad reputation as far as quality of manufacturing and car manufacturing in
particular was concerned.

One motivated reason for developing JIT and some other better production techniques was
that after World War II, Japanese people had a very strong incentive to develop a good
manufacturing technique which would help them rebuild their economy. They also had a
strong working ethic which was concentrated on work rather than on leisure, and this kind of
motivation was what drove Japanese economy to succeed. Therefore Japan’s wish to improve
the quality of its production led to the worldwide launch of JIT method of inventory. The
chief engineer Taiichi Ohno, a former shop manager and eventually vice president of Toyota
Motor Company at Toyota in the 1950s examined accounting assumptions and realized that
another method was possible. The factory could be made more flexible, reducing the
overhead costs of retooling and reducing the economic lot size to the available warehouse
space

Toyota implemented a program called Single Minute Exchange of Die (SMED). With very
simple fixtures, measurements were substituted for adjustments. Almost immediately, die
change times fell to about half an hour. At the same time, quality of the stampings became
controlled by a written recipe, reducing the skill required for the change. Analysis showed
that the remaining time was used to search for hand tools and move dies. Procedural changes
(such as moving the new die in place with the line in operation) and dedicated tool-racks
reduced the die-change times to as little as 40 seconds. Dies were changed in a ripple through
the factory as a new product began flowing.
JIT was firmly in place in numerous Japanese plants by the early 1970′s. JIT began to be
adopted in the U.S. in the 1980′s.

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The requirements for a proper just-in-time management are:

STANDARDIZATION: Where the supplies are standardized and the suppliers are trustable
and close to the plant. As there is little buffer inventory between the workstations, so the
quality must be high and efforts are made to prevent machine breakdowns.

SOFTWARE: For JIT to work efficiently Supply Chain Planning software, companies have
in the mean time extended Just-in-time manufacturing externally, by demanding from their
suppliers to deliver inventory to the factory only when it’s needed for assembly, making JIT
manufacturing, ordering and delivery processes even speedier, more flexible and more
efficient.

MULTI-FUNCTIONALITY In JIT workers are multifunctional and are required to perform


different tasks. Machines are also multifunction and are arranged in small U-shaped work
cells that enable parts to processed in a continuous flow through the cell

CLEANLINESS Environment is kept clean and free of waste so that any unusual occurrence
are visible.

SCHEDULES: Schedules are prepared only for the final assembly line, in which several
different models are assembled at the same line.

QUALITY: Quality within JIT manufacturing is necessary, because without a quality


program in JIT, the JIT will fail.

Just-In-Time Total Quality Management

Just-In-Time Total Quality Management is the mean of market and factory management
within a humanistic environment of continuing improvement. Moreover, it means continuing
improvement in social life, and working life. When applied to the factory, Kaizen means
continual improvement involving managers and workers alike. When it comes to Total
Quality Management, Japans strong industrial reputation is well-known around the world.
Total quality control is the system, which Japan has developed to implement Kaizen or
continuous improvement. The traditional description of Just-In-Time is a system for
manufacturing and supplying goods that are needed. There are several important tools that
are important for total quality management control, but there are seven that are even more
important. These are relations diagram, affinity diagram, systematic diagram or tree diagram,
matrix diagram,
matrix data analysis, process decision program chart, and arrow diagram. When used
properly, these seven tools will help the total quality management system by eliminating
defective products. Moreover, they will help in assisting to improve productivity, complete
tasks on time, eliminate waste, and reduce lead time and inventory cost.

Just-In-Time Manufacturing Systems


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One of the most popular ideas that is circulating around these days is the idea of just-in-time
manufacturing. Just-in-time manufacturing is a strategy used in the
business manufacturing process to reduce costs by reducing the in-process inventory level.
One key idea that must be understood about just-in-time manufacturing is throughput time.
This is the time between the start of the manufacturing process and the end, where the
product is ready to be shipped. Five key elements are involved in throughput time:-

• The first element is processing time, or the time actually spent working on the
product.
• Next is inspection time and moving time. Moving time is simply the amount of time
spent moving the product from one production department to another, as well as back
and forth from storage areas.
• The last two elements of throughput time are waiting, or queue, time and storage
time. Queue time is the amount of time a product is waiting at a production
department before being worked on, while storage time is the amount of time raw
materials, finished goods, and works-in-progress actually stay in storage. Just-in-time
philosophy says that the first element, processing time, actually adds value to the
product, while the last four key elements do not. Just-in-time manufacturing tries to
decrease the amount of time spent on non value added activities as much as possible.
Just-in-time philosophy was first used by Toyota in Japan. The implementation of
just-in-time processes is begun by training everyone in the company about the just-in-
time philosophy. The basic just-in-time concepts that employees would be trained in
and made to follow as guidelines are listed:-

• Visualize the process in as few steps as possible.


• View inventory as moving, not static.
• Emphasis should be placed on the synchronization of each process.
• Simplify, combine, eliminate
• Wastes are: over and under production, unnecessary steps, and excessive inventory
and motion

Total quality management has the same goals as just-in-time, but also seeks as few errors as
possible between each stage of production. Just-in-time philosophy is a tool that top-level
managers use to implement total quality management. Most companies today seek this
implementation, and follow the following steps.

• The first step to implementing TQM/JIT manufacturing is to train the top


management in the basic concepts of these ideas.

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• The next step is to form a top-level team. This team's responsibilities include deciding
upon an organizational structure and developing a plan to implement TQM/JIT within
the company. This plan should include the company's goals concerning production, as
well as how to establish this plan among all employees (i.e. motivation and
discipline). This plan should then be used to establish the overall philosophy of the
company concerning TQM/JIT.
• Next, the system should be implemented to every aspect of the company from
supplier to distributors. First, each department should establish its goals and a specific
problem to attack. Then, a team should be chosen by each department and team
leaders established. The teams should focus on the reduction of costs and the
elimination of wastes. Data must then be collected on the teams' problems. This data
should be plotted in order to find excess waste or costs. Once this is done,
measurements should be made as far as average costs, cycle times, and error rates.
Manipulation of this data should show at least some apparent problems in the current
system. Further analysis should help in the implementation of TQM/JIT by showing
problem areas.

With the just-in-time system, every aspect of the company is continuously running. The just-
in-time system helps companies spotlight those areas that are falling behind and need
improvement. There are methods by which a company can perform preventative
maintenance. The first is through planning a well-developed, goal-oriented. Second, the
management of each department should work together to try and eliminate problems, and not
place blame on any one department. Blame has never accomplished anything, and therefore
is a nonvalue-added item. Next, designers should be knowledgeable of manufacturing
requirements and limitations so that there is not a contradiction between designs and actual
products. This results in waiting time, another nonvalue-added item. Last, but most
important, is ample training. Employees that have been trained thoroughly can handle minor
problems on the spot without having to hold up the entire manufacturing process and call for
a manager. Employees without such training are problems waiting to happen. Once all of the
training, goal setting, and team forming are complete, the time has finally come to implement
the TQM/JIT system. Once implemented, a company must find a way to organize all of the
teams, including who is on what team and what their goals are. In order to do this, some
companies have developed what is called a team tracking and status report.

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:

INTRODUCTION
This paper asserts that problem identification and problem solving processes can be
integrated into work processes by imbedding tests that evaluate system-performance. These
tests are imbedded in individual work activities, in the connections that link those who
provide a product, service, or information with those who receive it, and in the overall
construction of pathways over which products, services, and information take their final
form. This paper builds upon observations made in the manufacturing sector to draw lessons
applicable to more general management concerns of delegating/task partitioning,
coordinating, and task execution. This paper shows how the specific tools of the Toyota
Production System (‘TPS’) such as pull-systems, kanban cards, and andon cords are artifacts
of a general, comprehensive approach to managing collaborative work systems that allows
frequent, fine-grained problem identification and improvement in overall organizational
structure, coordinative mechanisms, and task-performance. Therefore, this paper phrases
Toyota’s practices in terms of solving problems of work delegation, coordination, and
execution.
This paper asserts that organizations can develop the capabilities to be highly adaptive -- able
to address operational problems as they occur and capitalize on market opportunities as they
develop -- by putting in place mechanisms that allow highly situated learning that is both
broadly distributed throughout the organization but which also works towards common
purpose. A critical element in achieving this capability is designing work -- both that done
by individuals and that done by groups, collaboratively -- so that problem-solving based,
improvement opportunities are evident quickly and so that these opportunities are exploited
rapidly.

Research context
To study first hand and thereby gain an understanding of the micro-dynamics of process
improvement, Toyota and its affiliates were chosen as research sites. Existing links among
Toyota’s quality, cost, and variety advantages and its workforce management and problem-
solving processes -- collectively referred to as the Toyota Production System (‘TPS’) --
supported this decision. Since the 1960s, Toyota has been more productive than its
competitors. Its ‘TPS’ factories have been operationally different from ‘Fordist’ and ‘pre-
Fordist’ competitors. Indeed, Toyota and its Takaoka plant epitomize ‘lean manufacturing’.
To explain Toyota’s performance advantages, much focus has been on Toyota’s Just-in-Time
tools such as kanban-card paced pull systems, frequent, small batch production and delivery,
and reduced inventories.
The field research reported in this paper leads to the conclusion that Toyota has developed a
powerful ‘dynamic capability’ in the form of consistently practiced ‘Rules-in-Use’ for
organizational design, improvement, and adaptation.

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Methods
As previously discussed, Toyota consistently outperformed competitors, even though it had
been open to them, and they had tried to emulate Toyota. This not only suggested that
Toyota’s management processes had not yet been fully characterized but made ethnographic
methods appropriate for understanding the phenomenon of work-system management in
greater detail.
Characterizing complex work systems
This paper characterizes complex work systems with a framework of hierarchical design
levels similar to one used to characterize complex technical systems. Consider a familiar
example. A typical personal computer performs a number of functions. Most simply, the
system accepts data as input, stores information, performs computations on that data, and
generates output in a form valued by the user. In order to create a system capable of
performing these basic functions, designers had to make architectural decisions as how to
map those functions onto different parts of the system.

Table 1: Product and Process Design Hierarchies and related questions


Products Processes/Organizations
Design Level Critical questions Design Level Critical questions
What does the organization
What functions does the
System System produce and deliver (mix,
system provide for whom?
volume, timing) for whom?
How is functionality assigned
Who creates what output
to ‘spaces’ in the system and
Architecture Pathway (product, service, or
how do the spaces relate to
information) for whom?
each other?
How are the spaces joined
How do customers and
together?
Interfaces Connections suppliers communicate
How do material, information,
requests and responses?
and energy flow?
How do people or machines
How do components perform produce and deliver outputs for
the functions assigned to them which they are responsible
Components Activities
given the interfaces they have given the connections they
with the system? have with immediate
customers and suppliers?
Figure 1: Pathways of connected activities

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Person doing a  
work­activity

Connecting flows  
of  material and  
information

Pathway of  
connected  
activities

Activities
In the TPS-managed organizations in which I gathered data, a consistent approach was
evident in the design of assembly line work. At its Kentucky plant, mentioned earlier,
installing a seat required a total of 51 seconds and was demarcated into 7 distinct steps, each
with an expected sequence, location, completion time and expected outcome. Deviations
from the design triggered signals that the line worker was in need of assistance. Exactly this
same approach was taken with other assembly line jobs at Toyota’s Kentucky plant, and seat
installation and other work at other Toyota plants (NUMMI, Takaoka, Tsutsumi, Kyushu)
also was specified with built-in, self-diagnostic tests.
Discussion
Recap: Toyota Production System Rules-in-Use
It was concluded that these behaviors which were termed as Rules-in-Use are the essence of
Toyota’s management system because:
• At organizations in which people have learned from expert Toyota teachers, the Rules [as
reflected in of actual behavior] were evident across functional specialties, hierarchical
levels and across products, processes, and markets, and the Rules explain my field
observations with fidelity.

• At organizations that have not learned from expert Toyota teachers, similar patterns of
behavior were evident only to a limited extent, regardless of function, product, process, or
market. Systematic behavior that was similar to that underpinning the TPS Rules-in-Use
was not evident.

Common to the Rules are specifying-every-design, diagnosing-every-use-with-built-in-tests,


and improving with every problem close in time, place and person to its occurrence. Thus,
the common themes of the Rules are that expectations of how something will work should be
articulated in advance and gaps between the expected and the actual performance should be
recognized immediately. This approach treats individual work and systems of work as

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experiments that prompt improvement efforts that both better processes and also build
knowledge. The role of each rule is indicated in .

Figure 2: Role of each Rule-in-Use


Design Test-in-Use Improve
Delegation,
(System design) Pathway rule

Coordination
Connection rule Improvement
(Interface design) Rule
Execution
(Component design) Activity rule

CONCLUSION
For many years, TPS and its derivatives such as lean manufacturing have been viewed as a
one-best way approach for managing operations. There are inherent problems presented by a
universal adoption of ‘best practice’, and the obvious practical problems are certainly
illuminated when we extend the idea of ‘one best way’ from the design of complex work
systems to the design of complex technical systems, as in the preceding paragraph.
Nevertheless, the methods associated with Toyota had an impressive currency largely
because of the long-standing recognition that Toyota is an outstanding manufacturer.
As a result, great attention has been paid, on one hand, to Toyota’s ‘Just-in-Time’ production
control tools and, on the other hand, to its ability to improve continuously on the other. This
paper argues that the practices are tightly integrated. Toyota designs work systems so that
they generate information immediately that a problem has occurred. These signals become
the impetuous for the problem solving activities that allow TPS-managed organizations to
engage in an adaptive, hierarchical search for superior designs for an organization’s system
‘value proposition’, architecture, interfaces, and component activities. Thus, TPS, as
embodied in Rules-in-Use, is not a one-best-way, per se, in terms of the final organizational
form it discovers, but it is certainly a superior way for facilitating situated, problem-solving
based learning that leads to organizational forms that fit strategically with the organizational
mission.

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Understanding

Toyota, a truck manufacturer, decided to begin producing passenger cars and they made a
determined effort to appraise and improve their methods at a fundamental level. They
succeeded phenomenonally at this and by 1980 were producing the highest quality
automobiles in the world. They called their new methods "Total Productive Maintenance" or
TPM.

What Toyota discovered was that the dominant cause of product defects was wear in the
machines that made the parts. In turn this wear was caused by the accumulation of dirt and
chips (metal shavings). The problem was that workers followed the basic American practice
which was to operate a machine until it broke and only then call in an engineer to fix the

machine. In some cases they would just throw the machine away and order a new one from
America. This resulted in defective parts as the machine wore down and lack of productivity
while the machine was waiting to be fixed or replaced. Another complication was that
workers tended to move from machine to machine and often confusion resulted. How could
systemic problems like this be fixed?

To solve the problems Toyota completely changed the way it operated its plants. First of all,
they stopped moving workers around as much and assigned workers to have responsibility
over individual machines. The next step was to require workers to keep special notebooks
documenting their machine. Before this was done machines were more or less black boxes to
the workers. The new way required the men to document not only how the machine operated,
but its entire maintenance history and how it worked internally. Workers started taking apart
their machines to learn about them and document their findings. Instead of hoarding
mechanical knowledge in a few absentee engineers every worker started to have this kind of
expertise.

The next step was to tackle the dirt. In the 1965 Toyota's factories looked like American
factories: chips and dirt everywhere. They would change that. Since dirt was responsible for
the wear that was causing defects it would be eliminated. They started on the outside by
creating sweeping and cleaning regimens. Then they started regularly taking apart their
machines to clean them. Finally they put their expertise to work and started designing special
guards and covers to keep dirt and chips out of machines permanently.

The last step in the equation was systematic preventative maintenance. Part of their
documentation efforts was to carefully study any irregularity in machine operation. For
example, if a machine began to vibrate in the old days they would ignore it until the machine
broke, like Americans. In the new way they would immediately stop any machine that was
vibrating and take apart the machine to discover the cause. Because they now actually had
started to learn how the machines worked internally this was possible. The worker (NOT an
engineer) would then attempt to fix the problem. In some cases these procedures led Toyota
to actually redesign and modify parts inside their tooling to improve it.

The results of these efforts are well-known: not only did Toyota start making the highest

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quality cars in the world but by 1980 they dominated the import market. Today Toyota is the
most profitable car manufacturer in the world by a large margin.

Just in Time in Toyota

Goal of Just in Time in Toyota

• Increasing the organization’s ability to compete with others and remain competitive
over the long run. The competitiveness of the firms is increased by the use of JIT
manufacturing process as they can develop a more optimal process for their firms.
• Increasing efficiency within the production process. Efficiency is obtained through
the increase of productivity and decrease of cost.
• Reducing wasted materials, time and effort. It can help to reduce the costs.

Other short-term and long-term objectives are:

• Identify and response to consumers needs. Customers’ needs and wants seem to be
the major focus for business now, this objective will help the firm on what is
demanded from customers, and what is required of production.
• Optimal quality/cost relationship. The organization should focus on zero-defect
production process. Although it seems to be unrealistic, in the long run, it will
eliminate a huge amount of resources and effort in inspecting, reworking and the
production of defected goods.
• Reduce unwanted wastes. Wastes that do not add value to the products itself should
be eliminated.
• Develop a reliable relationship between the suppliers. A good and long-term
relationship between organization and its suppliers helps to manage a more efficient
process in inventory management, material management and delivery system.
• Plant design for maximizing efficiency. The design of plant is essential in terms of
manufacturing efficiency and utility of resources.

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Limitation of Just in Time as applied to Toyota

• Culture Differences:- The organizational cultures vary from firm to firm. There are
some cultures that tie to JIT success but it is difficult for an organization to change its
cultures within a short time.
• Traditional Approach :- The traditional approach in manufacturing is to store up a
large amount of inventory in the means of backing up during bad time. Those
companies rely on safety stocks may have a problem with the use of JIT.
• Loss of individual autonomy :- This is mainly due to the shorter cycle times which
adds pressures and stress on the workers.
• Loss of team autonomy :- This is the result of decreasing buffer inventories which
lead to a lower flexibility of the workers to solve problem individually.

• Resistance to change :- JIT involves a change throughout the whole organization, but
human nature resists to change. The most common resistance are emotional resistance
and rational resistance. Emotional resistance are those psychological feeling which
hinder performance such as anxiety.

Toyota was able to meet the increasing challenges for survival through an approach that
focused on people, plants and systems. Toyota realised that JIT would only be successful if
every individual within the organisation was involved and committed to it, if the plant and
processes were arranged for maximum output and efficiency, and if quality and production
programs were scheduled to meet demands exactly.

JIT manufacturing has the capacity, when properly adapted to the organisation, to strengthen
the organisation's competitiveness in the marketplace substantially by reducing wastes and
improving product quality and efficiency of production.

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SWOT ANALysis
Strengths

• Global organization, with a strong international position in 170 countries


worldwide.

• High financial strength (1997, sales turnover, £131,511 million), sales growth
of 29.3%

• Strong brand image based on quality, environmental friendly (greener),


customized range.

• Industry leader in manufacturing and production. Maximizes profit through


efficient lean manufacturing approaches (e.g. Total Quality Management) and JIT
(Just in Time) manufacturing and first mover in car research and development.

• Excellent penetration in key markets (US, China, EMEA) and now the second
largest car manufacturer in the world, surpassing Ford.

Weakness

• Japanese car manufacturer - seen as a foreign importer.

• Production capacity. Toyota produces most of its cars in US and Japan


whereas competitors may be more strategically located worldwide to take
advantage of global efficiency gains.

• Some criticism has been made due to large-scale re-call made in 2005, quality
issues.

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Opportunities

• Innovation -first to develop commercial mass-produced hybrid gas-electric


vehicles (gas and electric), e.g. Prius model. Based on advanced technologies and
R&D activity. With oil prices at an all time high - this investment and widening of
product portfolio fits consumers looking to alternative sources of fuels away from
gas guzzling cars.

• To expand more aggressively into new segments of the market. The launch of
Aygo model by Toyota is intended to take market share in youth market.

• To produce cars which are more fuel efficient, have greater performance and
less impact on the environment.

• To develop new cars which respond to social and institutional needs and
wants. The development of electric cars, hybrid fuels, and components reduces the
impact on the environment. Toyota’s Eco-Vehicle Assessment System (Eco-VAS)
has helped in production, usage, and disposal.

• Continued global expansion - especially in the emerging markets e.g. China


and India, Russia, where population and demand is accelerating.

Threats

• Saturation and increased competition, intense marketing campaigns increasing


competitive pressures.

• Shifts in the exchange rates affecting profits and cost of raw materials.

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• Predictions of a downturn in the economy e.g. recession, will affect car
purchases (especially new cars). As household budgets tighten - this could lead a
decline in new car sales and possible rationalization of dealerships.

• Changing demographics e.g. number of large families is declining.


Undermining the demand for large family cars.

• Changing usage - families using the car less for taking children to schools.
Home deliveries. Businesses - restricting business travel (tele-conferencing).
Governments encouraging alternative forms of transport - cycling and incentives to
use public transport across Europe.

• Rising oil prices (fuel costs) and the costs of maintaining cars. Increase in
families who have chosen not to own a car, or decided to use their car less.

Toyota uses a Kanban pull system throughout the production process. Each task in the
process seems to take identical length and work content, so everyone is working at the same
pace to reduce bottlenecks.

Toyota communicates their demand for parts 20 days in advance to their suppliers, with the
right to change the forecasting up to the 10th day.

In 1986 from a labor force of 60,000 Toyota received 2.6 million improvement proposals,
96% of which were implemented by either management or the employees themselves.

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FUTURE PLANS

Toyota is a world leader in the research and development of advanced automobile


technology. Creating intelligent solutions for today's mobility challenges and taking
responsibility for future generations. That's the mission that motivates Toyota.

The quest for innovation is the foundation for Toyota's new technology concepts.
Unconventional ideas need room for creativity and the technologies of the future need testing
in real-life conditions. This is why Toyota develops concept cars such as p.o.d or FXS. Take
a look at Toyota's most recent concept cars and get a first glimpse of the vehicles which may,
one day, satisfy the needs of tomorrow's drivers.

Engine technology is one of Toyota's greatest assets. Toyota's award-winning engine range
reflects the high design and quality standards set by its engineers. Toyota engines are
developed for performance and responsiveness with a big focus on reducing emissions and
saving fuel. Today Toyota brings these benefits to customers with advanced variable valve
technology (VVT-i) petrol engines, common-rail turbo diesels (D-4D), and with the unique
Toyota Hybrid System (THS).

Toyota is going green like most automakers at the Detroit show, Toyota displayed a variety
of alternative-energy vehicles. The company not only introduced the third generation of the
Prius hybrid, but also showed a small battery-powered concept car, called the FT-EV
Concept. The FT-EV is an early step toward Toyota’s goal of introducing an urban electric
car by 2012, with the United States market definitely in mind.

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CONCLUSION

Toyota was able to meet the increasing challenges for survival through an approach that
focused on people, plants and systems. Toyota realised that JIT would only be successful if
every individual within the organisation was involved and committed to it, if the plant and
processes were arranged for maximum output and efficiency, and if quality and production
programs were scheduled to meet demands exactly.

JIT manufacturing has the capacity, when properly adapted to the organisation, to strengthen
the organisation's competitiveness in the marketplace substantially by reducing wastes and
improving product quality and efficiency of production.

There are strong cultural aspects associated with the emergence of JIT in Japan. The Japanese
work ethic involves the following concepts.

• Workers are highly motivated to seek constant improvement upon that which already
exists. Although high standards are currently being met, there exist even higher
standards to achieve.
• Companies focus on group effort which involves the combining of talents and sharing
knowledge, problem-solving skills, ideas and the achievement of a common goal.
• Work itself takes precedence over leisure. It is not unusual for a Japanese employee to
work 14-hour days.
• Employees tend to remain with one company throughout the course of their career
span. This allows the opportunity for them to hone their skills and abilities at a
constant rate while offering numerous benefits to the company.

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LEARNINGS
1. Reduced Setup Times: All setup practices are wasteful because they add no
value and they tie up labour and equipment. By organizing procedures, using carts,
and training workers to do their own setups, Toyota managed to slash setup times from
months to hours and sometimes even minutes.

2. Small-Lot Production: Producing things in large batches results in huge


setup costs, high capital cost of high-speed dedicated machinery, larger inventories,
extended lead times, and larger defect costs. Because Toyota has found the way to
make setups short and inexpensive, it became possible for them to economically
produce a variety of things in small quantities.

3. Employee Involvement and Empowerment: Toyota organized their workers


by forming team and gave them the responsibility and training to do many specialized
tasks. Teams are also given responsibility for housekeeping and minor equipment
repair. Each team has a leader who also works as one of them on the line.

4. Quality at the Source: To eliminate product defects, they must be discovered


and corrected as soon as possible. Since workers are at the best position to discover a
defect and to immediately fix it, they are assigned this responsibility. If a defect cannot
be readily fixed, any worker can halt the entire line by pulling a cord (called Jidoka).

5. Equipment Maintenance: Toyota operators are assigned primary


responsibility for basic maintenance since they are in the best position to defect signs
of malfunctions. Maintenance specialists diagnose and fix only complex problems,
improve the performance of equipment, and train workers in maintenance.

6. Pull Production: To reduce inventory holding costs and lead times, Toyota
developed the pull production method wherein the quantity of work performed at each
stage of the process is dictated solely by demand for materials from the immediate

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next stage. The Kanban scheme coordinates the flow of small containers of materials
between stages. This is where the term Just-in-Time (JIT) originated.

7. Supplier Involvement: Toyota treats its suppliers as partners, as integral


elements of Toyota Production System (TPS). Suppliers are trained in ways to reduce
setup times, inventories; defects, machine breakdowns etc., and take responsibility to
deliver their best possible parts.

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