Toyota
Aaron Fyke Yuki Wada
Gary Mi Grace Webber
Tony Palumbo
Agenda
•
•
•
•
Headline facts: Toyota
Global auto industry trends
Japanese auto industry history
Toyota company background
– Company history
– Production history
– Business segments
• The Toyota Production System
• Toyota’s strategy
• Our questions for Toyota
Headline Facts: Toyota
• Toyota has annual sales of $120 Billion
• Produces ~5.5 million vehicles per year
• From 56 manufacturing plants across
6 continents
• Employs ~200,000 people
• 3rd largest automotive manufacturer
1998 Production Comparison Chart
9,000
GM
8,000
7,000
Ford
6,000
Daimler
VW Chrysler
5,000
4,000
3,000
2,000
1,000
0
T
O
Y
O
T
A
Fiat Nissan
PSA
Honda
Renault
Global auto industry trends
•
•
•
•
Overcapacity
Economic downturn
Shifting consumer demands
European trade barrier reductions
Company History
• Established in 1937 out of Sakichi Toyoda’s weaving machine company
• Launched first car (SA Model) in 1947
• “Toyota Production System” formed in 1950 based on Just-In-Time principle
• First global expansion in 1959 at Brazil
• In 1972, cumulative production >10M units
Production History
UNITS (thousands)
Domestic Production
Total Production
6000
5000
4000
3000
2000
1000
0
1935 1936 1937 1940 1957 1960 1972 1980 1982 1988 1996 1999
Business segments
• Automotive
– Design, manufacture and sales of passenger cars, recreational vehicles,
SUVs and related parts
• Financial services
– Provisions of loans to car buyers and car dealers
• Others
– Industrial vehicles (forklifts, etc.)
The Toyota Production System
• Revolutionized manufacturing industry
• At its core is “lean”
– a relentless drive to improve efficiency and eliminate waste
• Beginnings of TPS were born out of necessity due to lack of resources in post-war Japan.
Toyota Production System
Key Main Concepts
• SMED
– Single Minute Exchange of Dies
– Promoted flexibility of production runs
• JIT
– Just In Time manufacturing
– Small batches which reduced inventory costs, tightened relationship with suppliers and improved quality control
Toyota Production System
Key Main Concepts
• “5 Whys” Quality
– Asking “Why?” 5 times to locate source of problems – Stopping the production line whenever there are quality problems to ensure they are not repeated
• Low cost supplier
– Long term supplier relationships
Toyota’s Strategy
• Increase competitive strength through advanced technology
– Environmental technology
• fuel consumption, emission, recoverability
– Hybrid vehicles and next generation fuel cells – Cost-reduction efforts
• discontinuation, integration of older models
– Increased emphasis on financial services and information communication system
Our questions for Toyota
• Current competitive landscape
– Local and global competition (Korea,
Daimler-Chrysler, Ford, GM etc.)
• Future of automobiles
– Development of fuel-cells, integration of
Internet applications and other trends
Japanese auto industry history
• From follower to leader
• From domestic producer to exporter
• Interventionist government
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