SUPPLY CHAIN MODELING

FACULTY MENTOR: DR. RAMESHWAR

DUBEY
Submitted by:

TARUNA SINGH
PRN: 20020741059

TOPIC: A PROFILE OF TOYOTA’S

PRODUCTION SYSTEM
• Toyota founded the Toyota Motor Company in 1937. The company is
headquartered in Japan grew to a market capitalization of $138 billion.

• Toyota first caught the world’s attention in the 1980s, when it became clear that 1937, Toyots was
there was something special about Japanese quality and efficiency. Japanese cars 01 founded
were lasting longer than American cars and required much less repair. And by
the 1990s it became apparent that there was something even more special about
Toyota compared to other automakers in Japan 1948-1975, Tps was
developed 02
• The incredible consistency of Toyota s performance is a direct result of
operational excellence. Toyota has turned operational excellence into a strategic
weapon. This operational excellence is based in part on tools and quality
2008, Largest car
improvement methods made famous by Toyota in the manufacturing world, such
as just-in-time, kaizen, one-piece flow, jidoka, and heijunka.
03 company

2009-10 crisis 04

Introduction 1
Development of Toyota production system Learning from Ford
• Visit to Ford Motor Company – Taichi Ohno
• Realization of economies of scale – Mass manufacturing • Inefficiencies of Ford
• Ford were producing 9000 units per month , Toyota were producing • Large inventory
900 units per month • Long waiting time
• Toyota had small market with different models • Hidden defects
• Ford was cash rich , Toyota was in debt • Overproduction to safeguard
• Few resources & Capital - need to turn cash around quickly cost per piece
• No luxury of high volumes, needed to adapt • Large material handling
• Requirement – High Quality, Low Cost, Short lead time and equipment
flexibility to match productivity of Ford • Assembly line

Evolution 2
Introduction
1
 • Grow leaders who thoroughly understand the
• Long term Philosophy at the expense of short term goals
work, live the philosophy and teach it to
• Create continuous flow to bring problems to surface
others
• Use pull system to avoid overproduction • Develop exceptional people and teams who
• Level out workload ( Heijunka)
follow your company’s philosophy
• Build a culture of stopping to fix the problem, to get • Respect your extended network of partners
quality right first time
and suppliers by challenging them
• Standardized tasks
• Go and see for yourself to thoroughly
• Use visual control so no problems are hidden
understand the situation
• Use only reliable, thoroughly tested technology that serves
• Make decision slowly by consensus,
your people & purpose
thoroughly considering all options,
implement solution rapidly
• Become a learning organisation through
relentless reflection ( Hansei) and continuous
Improvement ( Kaizen)
14 Principles 3
Evolution 2
Introduction
1
• Pull System – borrowed from Super Market
• JIT – Just In Time – right items at right time in right
quantity responsive to customer demands
• Customer – next process burrowed from Deming’s
principle
• “Atokotei wa o-kyakusuma” – The preceding process
must do what the subsequent process says
• Continuous Improvement – Kaizen
• Shortening lead time by eliminating waste in each
step of a process leads to best Quality and lowest
cost, while improving safety and morale
14 Principles
Evolution
3 4
2
Introduction
1
• Examine the manufacturing Process – focused
way ( Genichi Genbutsu )
• Use customer’s perspective – what does
customer want ? ( Internal – next customer
and external) - Value
• Identify Value added steps and non value
added steps
• Eliminate non Value added steps
• Continue
• Respect workers to do the above steps –
• Day on day , relentless, practice
TPS
• 2009–11 Toyota vehicle recalls • Three separate but related
recalls of automobiles by Toyota Motor Corporation occurred
at the end of 2009 and start of 2010. • Toyota initiated the
recalls, the first two with the assistance of the U.S. National
Highway Traffic Safety Administration (NHTSA), after
reports that several vehicles experienced unintended
acceleration. • The first recall, on November 2, 2009, was to
correct a possible incursion of an incorrect or out-of-place
front driver's side floor mat into the foot pedal well, which can
cause pedal entrapment. • The second recall, on January 21,
2010, was begun after some crashes were shown not to have
been caused by floor mat incursion. This latter defect was
identified as a possible mechanical sticking of the accelerator
pedal causing unintended acceleration, referred to as Sticking
Accelerator Pedal by Toyota. The worldwide total number of
cars recalled by Toyota stood at 9 million.
14 Principles
3 4
Evolution
2 5
Introduction
1
• If Toyota is not the cause of unintended acceleration, why was it blamed for it?
• The Toyota Company was blamed for its unintended acceleration mainly
because of the failure of the Public relations. The reason was that the
company’s public relations response to recall the problems very slow, therefore
many Americans started to believe the Toyota Company was trying to hide
something and cover their laws. The CEO of the Toyota Company – Akio
Toyoda also didn’t make any statement about this crisis until February 5th.
American Medias also blamed that the companies lack of transparency and their
actions in this regards.
Another prime problem was the cultural difference between Japanese and
Americans in the way of communication. In Japanese Management, when a
company face a problem first they tries to sort out and solve the problem after that
they inform to the media. But in American Style first they prefer answer, first then
after action. Therefore when Toyota keeps silent the American consider that they
are ignore them and unprofessionalism.
TPS
2009-10 Crisis
 Root causes for Toyota’s quality
problems
• Toyota’s aggressive growth targets: were out of character for what
historically had been a conservative company. Under family
leadership, Toyota had pursued growth cautiously. Given its huge
cost and quality advantages, it is likely that Toyota could have
gained U.S. market share much more rapidly than it did. However,
to avoid protectionist sentiment, management had been careful not
to exploit the company’s ability to reduce prices to build market
share, preferring to rely instead on its reputation for reliability and
durability.
Okuda convinced corporate leaders to pursue rapid sales growth and
profits while downplaying the risks associated with this strategy.
• Product complexity: The other root cause of Toyota’s quality
problem can be linked to the growing technical complexity of
today’s vehicles.
TPS
14 Principles
3 4
Evolution
2 5
Introduction
1 6
Implications & Learnings
• Quality is always the most important thing. Toyota case has shown
that failure to focus on qualitywould result serious consequence in
economical losses and reputational risks.
• A favorable prior reputation can offset some negative impacts of
crises. Consumers would view the impact of a crisis based on their
perception toward its prior reputation. However, over time if the
same problems repeat again, the mass media will closely keeping
their eyes on the issue and remind audience what had happened
before.
• Be prepared before crises. Though crises are often coming
unexpectedly and can’t be easily predicted, most crises are
cultivated under ineffective management in organizations, which
are usually not easily recognized by management teams in advance.
2009-10 Crisis
Causes &
Effects
 THANK
YOU
TPS
14 Principles

3 4 2009-10 crisis
Evolution
2 5
Introduction Causes & Effects
1 6