Toyota - Success and Downfall

There were several advantages of Toyota’s manufacturing system when compared with conventional manufacturing system. Ohno Taiichi was the person responsible in helping Toyota shift from the established method of manufacturing automobiles set by Ford. The basic philosophy was to produce everything in mass quantity to gain maximum economies of scale. The logic was to spread the fixed cost over the production line and benefit from lower cost. Another characteristic of this philosophy was to make each worker perform a single task only. This premise was supported by the fact that if one worker performs the same task over and over again then eventually he or she would get faster in doing so. Ohno Taiichi was able to identify several flaws in this philosophy. Firstly, mass production of same item meant that what was not used had to be stored in warehouses. This resulted in high storage cost. At the same time it tied up inventory in unproductive uses. Secondly, if anything goes wrong in initial machine setting, that would mean massive production of defective parts. Thirdly, if each worker is assigned to do only one task then that resulted in quality mismanagement. Fourthly, this philosophy created the problem of employing specialist at extreme ends of division of labor. There were many tasks that could have been performed by one person. Lastly, mass production system created hindrances in making customizable products. Ohno, came up with a new approach for Toyota’s manufacturing system. This approach had several advantages. First of all, the emphasis was to create everything in small batches. This was done by reducing the time needed to set up the machine for stamping out body parts. Engineers were involved in experiments that helped to speed up the time it took to change the dies in stamping equipment. The company moved away from traditional approach of making each person do one task. Instead they made people work in teams. This not only encouraged innovation but at