Professional Documents
Culture Documents
Toyota
Chairman:
Founded:
Headquarters:
Philosophy
The Toyota
Way:
Business
Units:
Hiroshi Okuda
By Kiichiro Sakichi in 1933 within Toyoda Automatic Loom,
independent as of 1937
Toyota City, Japan (US HQ in Torrance, CA)
1. Belief in Mono-zukuri (Making good products); Just-in-time => Lean Management
2. Principle of Customer first; Customer Satisfaction No.1, Quality No.1
3. Respect for People (employees); Mono-zukuri is Hito-zukuri (Making good product is
equal to making good people); Mutual trust of management and employees
Daihatsu Motor
Co., Ltd.
New United Motor
Manufacturing, Inc.
Toyota Motor Credit
Corporation
Toyota Motor
Sales, U.S.A., Inc.
Toyota Motor
Thailand Company Limited
And, as of 1984:
Toyoda Automatic
Loom
Aichi Steel
Toyoda Machine
Works
Aisin Seiki
Nippon Denso
Toyota Gosei
Koito Works
Aisan Industries
Products:
Celica
Corolla
4Runner
Echo
Land Cruiser
Sienna
WiLL
Industrial vehicles
Cellular phones
Financial services
Manufacturing:
Japan (15 plants), Rest of East Asia (17), North America (8), Latin America (5),
Europe (4), Middle East & Southwest Asia (4), Africa (2), Oceania (1)
R&D:
119,656
105,797
4,540
3,746
Toyota Paper
Employees: World
214,631
183,917
Toyota Paper
Site Background:
Toyota Paper
TWO
THREE
History of Toyota
A straightforward account of the timeline from 1937 to 2001
FOUR
FIVE
SIX
Toyotas relationships
How Toyota deals with its employees, suppliers and customers
Toyota Paper
Toyota Paper
most data for this page is taken from Michael Cusumanos 1991 book, The Japanese Automobile
Industry
A Fyke, G Mi, C A Palumbo, Y Wada, G Webber
Toyota Paper
Domestic Production
Total Production
0
1935
1936
1937
1940
1957
1960
1972
Year
Source, Toyota Motor Company
1980
1982
1988
1996
1999
Toyota Paper
Toyota Paper
Toyota plans to continue promoting cost reduction efforts such as the common use of vehicle
platforms, reductions in component types and the streamlining of production lines.
In order to respond to the customers overall needs, which are bound to expand from automobiles
to include other related areas, Toyota intends to develop its business strategically by effectively
allocating management and other resources to its finance, information and communication
businesses.
Product Diversification
Toyota traditionally has regarded customers principally as buyers of automobiles and of a very
limited range of closely related products, such as financing and replacement parts. Now, Toyota is
deepening its relationships with automobile customers through new products and services, such
as innovative packages that combine financing and insurance. And it is diversifying into markets
where it develops customer relationships through products unrelated-or indirectly related-to
automobiles, such as cellular telephones and credit cards.
Finance business
Much of the increased value that Toyota plans to cultivate downstream in its value chains is in
financial services. As Toyota expands its activity in the financial sector, it needs to manage risk
systematically and manage operations efficiently. Therefore Toyota placed all the financial
services operations under a newly-established financial management company in July 2000.
Information technology development
Toyota intends to get onto the cyberspace map through multimedia ventures
supporting value-added functions in automobiles, such as navigation. Toyotas
GAZOO website, which began as an automobile information service, is being developed into a
provider of diverse services. Its most developed functions provide price estimates and
brochureware for Toyota vehicles and the nearest located dealers, and it also hosts a growing
array of virtual shops for Internet shopping, including access to music downloading sites.
Toyota is the second-largest shareholder of KDDI Corporation (with 13% of shares), formed in
2000 through the merger of Toyotas IDO subsidiary and KDD corporation. KDDI Corporation is a
leading provider of international and cellular telephone services in Japans highly competitive
telecommunications industry.
Toyota Paper
Toyota Paper
Toyota Paper
Glossary of Terms
Andon Andon, a Japanese word for lantern, describes the notice board used for quality control.
The board hangs over the aisle between production lines and alerts supervisors to any problem.
In assembly, the board normally indicates the line name in green at the top. When a team
member pulls a cord on the line, the board lights up a number corresponding to the troubled
station in yellow, which then changes to red when the line actually comes to a halt. The board
also shows whether the line stop is temporary or not, and whether the line is starved (body short),
blocked (body full), or stopped by internal problems. This device quickly informs a supervisor of
only what he or she needs to know to take immediate actions and thereby allows a small number
of supervisors to control a large area; it also prompts supervisors to develop countermeasures for
recurring problems in the longer term.
Heijunka This is Toyotas terminology describing the idea of distributing volume and different
specifications evenly over the span of production such as a day, a week, and a month. Under this
practice, the plants output should correspond to the diverse mix of model variations that the
dealers sell every hour.
Kaizen Kaizen literally means changing something for the better. The object of change
usually includes the standardized work, equipment, and other procedures for carrying out daily
production. The purpose is to eliminate waste in seven categories: (1) overproduction, (2) waiting
imposed by an inefficient work sequence, (3) handling inessential to a smooth work flow, (4)
processing that does not add value, (5) inventory in excess of immediate needs, (6) motion that
does not contribute to work, and (7) correction necessitated by defects. Kaizen requires that a
process be first standardized and documented so that ideas for improvement can be evaluated
objectively.
Kanban Kanban means signboard in Japanese. The one used for a part supplied by an
outside supplier indicates the name of the supplier, the receiving area at Toyota, the use-point
inside the Toyota plant, the part number, the part name, and the quantity for one container. A bar
code is used to issue an invoice based on actual part usage.
these definitions are taken from HBS case 9-693-019, Toyota Motor Manufacturing, U.S.A.,
Inc. 1992 the President and Fellows of Harvard College
A Fyke, G Mi, C A Palumbo, Y Wada, G Webber
Toyota Paper
Toyota Paper
Toyota Paper
Each channel is directly tied into the product development process. During the entire
development period for a new car model, staff members from the channel are on loan to
development teams. This helps bring the voice of the customer into the design phase of the
process. A Toyota employee knows exactly what the customer wants. Often, Western engineers
can be surprised when they learn what their customers truly desire. The Toyota dealership sales
force is well-educated, being comprised typically of college graduates, who have undergone an
intensive training program at the Toyota University, studying sixty courses mostly related to
marketing. Once the students graduate the Toyota University they begin selling cars. Toyota
salespeople also have a tremendous knowledge of the engineering attributes of the vehicles they
sell, in contrast to Western salespeople who are more commonly professional negotiators with
very little engineering or marketing knowledge.
The Japanese salespeople are assigned to dealerships in teams of seven or eight, similar to the
teams discussed at the assembly site. Within the dealerships, the focus of the groups work is to
solve their customers' problems. The dealerships keep open communication channels with the
manufacturer continuously exchanging information. Employees in the dealerships take as equal
an ownership in Toyota vehicles as the assemblers that build Toyotas in distant factories. The
amount of ideas and customer feedback that is captured at the dealerships are typically lost at
Western dealerships. This is an important channel for determining improvements to the vehicles
quality and performance.
Outside of the dealerships, Toyota salespeople sell door-to-door. The Toyota salesperson can
then know as much about their customer's family as the family physician and stock broker
combined, for example, age of parents, age of children, the number of vehicles, age of the
vehicles, the amount of available parking space, etc. The salesperson utilizes the data and
optimizes their sales calls to be most effective. Also, the salesperson uses their knowledge of
their customers to suggest the most appropriate product. Most automobile orders are placed
directly onto the factory, as opposed to buying off the lot. In keeping with Toyotas lean inventory
system, Toyota dealerships in Japan have very little inventory, while Western dealerships have on
average sixty days of inventory.
For the Western manufacturers, forecasting to demand is critical and often wrong. Occasionally,
vehicles sit on the dealer lot for many months, because they have an undesirable color or
options. The customers ultimately pay for this excessive inventory. The associated inventory
holding cost adds no value to the vehicle and is simply a loss. However, by being able to
respond, through flexible manufacturing, to a customers order within six weeks, Toyota is able to
encourage more orders directly from the factory. Since the Toyota sales force communicates
directly with the factories, the manufacturer knows exactly what the customer demand is at any
one time. This assures Toyota the ability to optimize the factories and the right mix and quantity
of vehicles. Western factories need to depend on the less effective communication link with the
independent dealerships, who themselves have their own objectives for inventory. This causes
excess inventory holding costs, adding to the cost of the vehicle.
All of Toyota, from assembler to the salesperson, respect each other like family. They all work for
the same company and their profit sharing and job security depend on each other. Salespeople
usually stay at their assigned dealership for long periods of time as they have good incentives to
stay. In addition, the Toyota family is extended to the customer. Salespeople sell vehicles with
the intention of their 'family' to be repeat customers. Also, since Toyota salespeople share
commission from the team's performance there is less unproductive competition between
salespeople for commissions to detract from the customer experience. The Toyota sales team,
much like the approach taken between assembler and supplier, works together to improve each
other's abilities, raising all members' commission.
Toyota Paper
Sources/Further Reading
General sites of interest:
www.toyota.com
www.globaltoyota.com
www.gazoo.com
www.kddi.com
finance.yahoo.com
Specific articles:
FT.com: HIROSHI OKUDA: Toyota's man of vision, by Alexandra Harney
Japanauto.com: Hiroshi Okuda, Toyota Chairman, Elected to Lead Japan Automobile
Manufacturers Association
APEC 1999: Keynote Speech by Hiroshi Okuda, APEC Symposium on the Asian Economy,
Tokyo, Japan, July 23, 1999
Preview NetClipping http://www.fiepr.com.br/netclip/2000/1505wsj.htm: Founding Clan Vies With
Outsider For a Place at the Top of Toyota May 15, 2000
PeopleSoft.com: ERP Implementation at Toyota
www.economist.com: Wave goodbye to the family car Jan 11, 2001
HBS Case 9-693-019: Toyota Motor Manufacturing, U.S.A., Inc. by Professor Kazuhiro Mishina
and Kazunori Takeda, copyright 1992 by the President and Fellows of Harvard College.
Books:
The Machine That Change The World, 1990, James P. Womack, Daniel T. Jones, and Daniel
Ross, Rawson Associates - New York, Publisher Simon & Schuster New York
The Japanese Automobile Industry, Technology & Management at Nissan & Toyota, 1985
(reprinted 1991), Michael Cusumano, Harvard East Asian Monographs 122