Toyota case study

1 . Conventional automobile mass-production systems in America usually produced a single component in large numbers , since it took a considerable amount of time to put together the specialized manufacturing equipment . Although these assembly lines tended to save on time spent on assembling manufacturing machinery , producing components in massive lots needed more storage space and a lot of working capital was sitting idle in warehouses . On the other hand , Toyota 's lean production system overcame these issues , by manufacturing components in smaller lots , thereby saving storage space and optimally utilizing working capital

. This also meant that fewer defective items would be manufactured on the whole , due to smaller manufacturing lots Moreover , the workforce was unidimensional as every worker did only one specific task . This usually resulted in a lot of manufacturing defects owing to monotony and overconfidence . At Toyota , manufacturing defects had to be corrected immediately by the same workers that did the manufacturing . This also empowered workers with additional responsibilities and skills . Toyota 's engineers also came up with innovative ways to greatly reduce machinery assembling time , thereby making their system more economically efficient compared to traditional mass-production methods

2 . Toyota put a lot of confidence in its suppliers by providing them with financial , technical and management assistance to improve their process , which in turn reaped mutual benefits . Toyota usually signed long-term contracts with its suppliers and negotiated the finance part in advance . It also was generous enough to let manufactures to retain profits if they found innovative ways to reduce manufacturing costs while the profits were shared if Toyota came up with the innovation This optimism on Toyota 's behalf paid rich dividends as suppliers were always on time and supplied lesser defective components , thereby eliminating production lags . This was in stark contrast to US automobile manufacturers that still did a majority of the manufacturing , while Toyota was able to concentrate on innovation rather than manufacturing .3 . Soon after World War II , the Japanese government sensed the threat of foreign automobile industries taking over the local automobile industry Hence , it imposed severe tariffs on such American and European manufacturers to protect local interests . The weak Japanese economy coupled with stringent labor laws prevented Toyota from making heavy investments . Hence , Toyota had to do something revolutionary by changing the existing system , if it had to survive and compete against the West The arrival of Toyota 's Ohnu Taiichi in the scene and his lean production philosophy signaled a new phase for Toyota . Lean production was able to make manufacturing in small lots economically viable . It also was able to reduce the need for specialized workers , as most workers were trained to perform all manufacturing tasks . Toyota 's new agreement after the 1950 workers ' strike also helped to cut down on labor expenses

4 . Fervent opposition from local regulators and American politicians looking out for local interests slowed down Toyota 's exports in 1981 Since this trend continued for the next three years , Toyota eventually decided to strike , joint venture with...