Process and Product Innovations of Toyota
Introduction
Established in 1937, Toyota Motor Corporation (TM) is currently the 8th largest company in the world. Its annual revenue hovers around US$186 million dollars and it hires a workforce of approximately 290,000 people worldwide.
Besides being a mammoth economic entity, Toyota has also influenced the world in many ways; Toyota is renowned for its amazing cost cutting initiatives as well as highly influencing corporate philosophies which permeates through every layer of TM. Put together, they are known as the Toyota Production System (TPS), and this radical process innovation strategy, though once scoffed upon by many industry insiders, has brought the standard of efficiency to new levels.
Toyotafs Process Innovation
TPS is the essential framework and philosophy organizing Toyotafs manufacturing facilities, and the interaction of these facilities with the suppliers and customers. Its main objective is to eliminate Muda, ³Ê (waste), a term now familiar even with its American subsidiaries. As quoted by Bruce Bremer, facility engineering manager at Toyotafs North America manufacturing system, gWherefs the Muda? Is it overtime? Reduce it. Is it your indirect material costs? Find out why your costs are higher than the benchmark and find ways to reduce them,h he said .
An important part of the TPS is the Just-in-Time (JIT) inventory system, which all of Toyotafs manufacturing facilities are required to inculcate into their production lines. The JIT technique was actually first used by Henry Ford back in 1920s. However, it was adopted by Toyota in the 1950s and refined to an elevated level of efficiency, one that made it the worldfs leader in employing the JIT system.
JIT is the principle of having parts ready just as when they are desired, thus eliminating the need and more importantly the cost of holding inventory. Besides having less capital held up in inventory with the JIT system, more flexibility is also given to the facility as engineering
Established in 1937, Toyota Motor Corporation (TM) is currently the 8th largest company in the world. Its annual revenue hovers around US$186 million dollars and it hires a workforce of approximately 290,000 people worldwide.
Besides being a mammoth economic entity, Toyota has also influenced the world in many ways; Toyota is renowned for its amazing cost cutting initiatives as well as highly influencing corporate philosophies which permeates through every layer of TM. Put together, they are known as the Toyota Production System (TPS), and this radical process innovation strategy, though once scoffed upon by many industry insiders, has brought the standard of efficiency to new levels.
Toyotafs Process Innovation
TPS is the essential framework and philosophy organizing Toyotafs manufacturing facilities, and the interaction of these facilities with the suppliers and customers. Its main objective is to eliminate Muda, ³Ê (waste), a term now familiar even with its American subsidiaries. As quoted by Bruce Bremer, facility engineering manager at Toyotafs North America manufacturing system, gWherefs the Muda? Is it overtime? Reduce it. Is it your indirect material costs? Find out why your costs are higher than the benchmark and find ways to reduce them,h he said .
An important part of the TPS is the Just-in-Time (JIT) inventory system, which all of Toyotafs manufacturing facilities are required to inculcate into their production lines. The JIT technique was actually first used by Henry Ford back in 1920s. However, it was adopted by Toyota in the 1950s and refined to an elevated level of efficiency, one that made it the worldfs leader in employing the JIT system.
JIT is the principle of having parts ready just as when they are desired, thus eliminating the need and more importantly the cost of holding inventory. Besides having less capital held up in inventory with the JIT system, more flexibility is also given to the facility as engineering