Review on Toyota Company

Founded in 1937 by Toyoda Kiichiro, Toyota is a Japanese multinational automotive manufacturer. Of course, Toyota did not become one of the top car companies overnight, it took time from the growth. However, the manufacturing system the company implemented gave the company some advantages. A conventional mass production system is the manufacturing of large quantities of standardized products, frequently utilizing assembly line technology. Toyota, on the other hand, had a different approach. They took the main parts of the mass production system and implemented changes based on their observations and goals. Their system promotes efficient work while decreasing inventory costs and producing more based on demand. They also produced the auto parts in small batches to decrease the costs and finding a way, through trial and error, to decrease the time to change stamping. This made it possible to produce on demand, hence making the overhead cost go down. Another element of Toyota’s process was the workers worked together and were responsible for finding their own mistakes instead of finding the mistake at the end of the line; this would make fixing the mistake more costly. Overall the manufacturing system of Toyota is cost effective and efficient in production, accompanied by having better employee relationships, quality products and, perhaps most essential for a company, more profits.

Another tactic that set Toyota apart was the approach to customer relations. The attitude was “equal partners”; this attitude influenced the design and production process. Toyota and their partners, suppliers, and dealers have a resilient relationship, which makes the company have a worthy relationship with the customers. Toyota is in tune with the wants and needs of their customers. They are so in tune with the wants and needs. In fact, they have a database that compiles all of the customer’s input(s); the database holds everything from style preferences to car color to car features. With Toyota going to the customer and getting the feedback they are changing the way the industry. However, they need to make sure that they are researching and developing in a complete way to ensure the accuracy.

As mentioned briefly above Toyota has a resilient relationship with their suppliers, this relationship essential to their company. Usually, U.S. manufacturers believe that a company is more efficient by not having a dependency on other firms; they tend to keep a lot of parts being produced in-house. For the parts they could not produce in-house, a series of contracts come in and the company would usually place an order with the lowest price. This way of business makes the relationship extremely impersonal. Now looking at Toyota, yes they initially followed this way of thinking due to limitations. After a few years, Toyota moved to a different way of working because they thought the initial way of working in a “bidding war” was self-harming for the company and would not be suitable in the long run. They wanted to avoid capital expenses that went along with expanding their manufacturing capabilities, reduce risk, lower wages, and offering a high-quality product at a lower cost. The outcome of these decisions made a movement in labor productivity, short set up time, and also decreased the number of defects per car.

After studying the Toyota case one can tell that they will continue to have a competitive advantage in the industry. One can see this advantage being met because Toyota has been continuing their innovation and performance. They also were able to achieve the goal of owning at least 15% of the market share and being a leader in car manufacturing internationally, with strong growth in North America. Other companies will always strive to close the gap between themselves and Toyota, but for now, Toyota continues to prove its aptitude.