ILLUSTRATION CAPSULE 10.2 Toyota\'s Legendary Production System: A Capability Th
ID: 329893 • Letter: I
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ILLUSTRATION CAPSULE 10.2 Toyota's Legendary Production System: A Capability That Translates into Competitive Advantage The heart of Toyota's strategy in motor vehicles is to outcompete rivals by manufacturing world- class, quality vehicles at lower costs and selling them at competitive price levels. Executing this strategy requires top-notch manufacturing capa- bility and super-efficient management of people, equipment, and materials. Toyota began conscious efforts to improve its manufacturing competence over 50 years ago. Through tireless trial and error the company gradually took what started as a loose collection of techniques and practices and inte- grated them into a full-fledged process that has come to be known as the Toyota Production System (TPS).TheTPS drives all plant operations and the company's supply chain management practices. PS is grounded in the following principles, prac- simpler and easier to perform, increasing the speed and efficiency with which activities are performed, and constantly improving product tices, and techniques: Use just-in-time delivery of parts and componentsquality. to the point of vehicle assembly. The idea here is. Empower workers to stop the assembly line when there's a problem or a defect is spotted Toyota views worker efforts to purge defects materials from place to place and to discontinue all activities on the part of workers that dont add value (particularly activities where nothing and sort out the problem immediately as criti cal to the whole concept of building quality into the production process. According to TPS, "If ends up being made or assembled). .Develop people who can come up with uniquethe line doesn't stop, useless defective items ideas for production improvements. Toyota will move on to the next stage. If you don't know encourages employees at all levels to ques here the problem occurred, you can't do any- ways of doing thing to fix it means challenging a boss on the soundness of a directive. Former Toyota president Katsuaki Deal with defects only when they occur. TPS philosophy holds that when things are running Watanabe encouraged the company's employsmoothly, they should not be subject to control ees to "pick a friendly fight"Also, Toyota doesn't fire its employees who, at first, have little judg- if attention is directed to fixing problems that are found, quality control along the assembly ment for improving work flows; instead, the com- line can be handled with fewer personnel better problem solvers pany gives them extensive training to become Ask yourself "Why?" five times. While errors eed to be fixed whenever they occur, the value ofasking Why? five times enables identifying Emphasize continuous improvement. Workers are expected to use their heads and develop bet ter ways of doing things, rather than mechani- cally follow instructions. Toyota managers tout the root cause of the error and correcting it so that the error won't recur andOrganize all jobs around human motion to create a productionjassembly system with no wasted effort. Work organized in this fashion is called standardized work" and people are trained to observe standardized work procedures (which include supplying parts to each process on the messages such as "Never be satisfied There's got to be a better way. Another man- tra at Toyota is that the T in TPS also stands for Thinking." The thesis is that a work environ- ment where people have to think generates t wisdom to spot opportunities for making tasksExplanation / Answer
Toyota leads the automotive industry by following the below mentioned principles: