Process Selection

Toyota has long been recognized as a leader in the automotive manufacturing and production industry. Toyota Production System uses the Continuous Process. Toyota creates continuous process flow to bring problems to the surface and uses the “pull” system to avoid overproduction. The Toyota Productions system (TPS) calls for the end product to be “pulled” through the system. This is to make sure the right parts reached the assembly line at the right place, just as they are need and with no excess. The most significant effects on process value delivery are achieved by designing a process capable of delivering the required results smoothly. By using the TPS system Toyota has been able to reduce lead time and cost, while improving lead time. In 2007 Toyota became the largest company manufacturer. The 14 Principles of the Toyota way management philosophy used by the Toyota Corporation that includes TPS, is also known as Lean Manufacturing.

Toyota produces made-to-stock (MTS) customer orders in which cars are produced in a standard continuous process flow called the Toyota Productions system (TPS). Productions start when management forecasts customer demand. Once data is gathered, operations management redesigns and improves the TPS in ordered to meet customer demand. Once the cars are off the assembly line and are finished goods inventory they are shipped from the plant to a number of different dealerships across the country. The process is complete when the customer buys the car at the dealership.

The TPS falls into the Continuous and Assembly line cell in the process characteristics matrix. Workers assemble cars sequentially through the assembly line in high volume. Low labor skills are required, and the continuous process is repetitive. Although this standard process keeps costs to a minimum, there is low flexibility as a result. Historically, Toyota has prided itself in producing high quality automobiles at a low cost. However, recently the TPS has been challenged as a result of a mass recall on the accelerator pedal of eight major models including the Toyota Camry. The Company quickly responded by engineering a steel reinforcement bar for the pedal, and informing customers on how they can get their car fixed. http://pressroom.toyota.com/pr/tms/toyota/toyota-consumer-safety-advisory-102572.aspx

One of the major factors influencing Toyota’s process selection is being able to balance and maintain proper inventory within the company. Toyota noticed the market conditions and saw a demand for gas efficient vehicles, especially in the United States. Despite the high cost, Toyota had the required capital to execute their process selection. Whether it is auto parts, personnel, or simply space, Toyota makes sure to stay aware of their amount of inventory in relation to the amount of products they intend to sell. The company follows the guidelines of lean manufacturing. This embodies the principles that there is no need to overstock the warehouses with parts or cars unless they know where their products are heading. They build through the stages of production based on the demand for the materials needed to continue to the next step.

Toyota can certainly adopt some of the mass customization methods discussed. We live in a time where every company seeks to please the consumer on a personal level in order to get an edge over the competition. What better ways to do this than have your customers select cars and features to their personal liking? Toyota implemented this idea into their manufacturing process by allowing this new age of technology we live in to become a part of the production process. The company has included many features that accommodate the gadgets and gizmos being flooded into the consumer market. Toyota even has a policy where a customer can order a car online with all the bells and whistles he or she wants, and the car will get delivered to that individual within five business days.

Toyota’s Inventory Management

Inspiration can be found in the least likely of places. It was while shopping at a supermarket that the minds over at Toyota created the Toyota Production System, or more commonly known as “TPS.” The idea for this system was sparked when examining a vending machine with the simple process of a customer buying a drink, and the machine simultaneously replacing it. The Toyota Production System was originally called “Just-In-Time Production,” and fuels off of ideas composed by the founder of Toyota, Sakichi Toyoda, his son, Kiichiro Toyoda, and engineer, Taiichi Ohno.
The primary goals of the TPS are to find solutions to overburden, inconsistency, and to get rid of waste. This systems philosophy is to produce intelligently and eliminate aspects like over-production, waiting, and correction, so that inventory is not needed. One principle under the Toyota Production System is Small-lot production. Finding a way to make setups shorter and less expensive, gave Toyota the freedom to economically produce a variety of things in small quantities.
Another principle under the TPS is the process known as “Pull Production.” The intention of this process is to cut down inventory holding costs, as well as lead time. Toyota developed this idea so that the quantity of work performed at each stage of the developmental process is determined strictly by the demand for needed materials in the following stage.
These methods of cost cutting and inventory management are all becoming mimicked within different companies all over the world. Toyota was one of the pioneers to first adopt these unique methods and continue to do so today.