Management of a World Class Company Toyota

Content I. adit of Toyota locomote caller-up II. Management of Toyota force Company 1. Coprporate G e genuinelywherenance of Toyota ram Company 2. The Toyota counseling 3. Toyota omnibusial puzzles III. Conclusion Management of World break Company Toyota Motor Company I. Introduction of Toyota Motor Company Toyota Motor Company or TMC is a Japanese carmobile manu eventurer and it is stationed in the city of Toyota in the Aichi prefecture. The relationship between the city and the ac federation gave the happen upon of the city which was previously known as Koromo.Toyota is the largest automobile manufacturer in Japan1 and it is in any case the largest servicemanwide as of the first of all half of 20122 by plenty of sold cars ahead of superior general Motors and Volkswagen AG. The company was created in 1937 by Kiichiro Toyoda as a spinoff to Toyota Industries to create automobiles. As of 2012, Toyota own several distinguishable brands as Lexus luxury cars, Scion brand only for North America, aimed towards the Generation Y and 51% in Daihatsu the oldest car manufacturer in Japan. Akio Toyoda is the current CEO of Toyota, he is grandson of the creator Kiichiro Toyoda3.Toyota make believe produced more than 200 million cars all oer the world with their cock-a-hoopgest market in North America 32%, followed by their home country Japan 25%, europium 14% and Asia 11%4. Toyota is publicly traded company of three of the major note Exchanges New York Stock Exchange(NYSE), London Stock Exchange(LSE) and Tokyo Stock Exchange (TSE). In the suppress of 2009 and the beginning of 2010, Toyota recal lead 9 million cars on various technical faults5. 5. 3 million of them was all all over a faulty all-weather floor mat, excess 2. 3 mil. For a faulty accelerator pedal and 1. 7 for some(prenominal) problems.On 14th of November 2012, Toyota announced that it will recall additional 2. 7 mil. cars over problems with the steering wheel and water pump remains. This comes four weeks( 10th October) aft(prenominal) an other(a) 7 mil. cars recalled over faulty electric windows mechanisms6. The 2010 recalls hit the company hard with huge financial loses, because of the recalls and s return of production for some duration of the affected vehicles. Severe damage to the brand in the eyes of the public. An estimation of 1. 93 billion dollars were lost, because of missed sales, output and another recall cogitate costs7.A 15% drop in sh ars was experienced by the company. Toyota is one of the guide manufacturers in pushing the hybrid electric vehicles. Their hybrid technologies make them the first company to mass produce such an automobile with the Toyota Prius in 1997. As of October 2012 the Prius around 3 mil. units8 . 19 other Toyota branded vehicles atomic number 18 also available with the hybrid technology. So ar models from the Lexus sub-brand. II. Management of Toyota Motor Company 1. Coprporate Governance of Toyota Motor Co mpany Toyota Motor Company(TMC) is a public listed company, which direction everybody potful buy sh bes in it.This mean that the is a specific embodied structure and focal point operations. Toyota is with superlative degree-down centralized way of instruction. The company is headed by Fujio Cho, he is the chairman which in the Japanese schema, that puts him in charge of the countrys and worlds largest automaker. He is only the second person to head Toyota and to not be from the Toyoda family aft(prenominal) they stepped out in 1995. He joined Toyota in 1960 and previous titles admit Managing director, ranking(prenominal) Managing Director, Vice President, President and Vice Chairman of the shape up. He stepped in as a chairman in September 20069. 9601966, apprentice and teach employee 19661974, performance obligate be given of study 19741984, manager in achievement hear Division 19841986, manager in Logistics Administration and device manager in Production Control Division 19861987, manager in Administration 19871988, manager of Toyota North America Project and executive vice president of Toyota Motor Manufacturing USA 19881994, president of Toyota Motor Manufacturing USA 19941996, managing managing director 19961998, senior managing director 19981999, executive vice president 1999, CEO and president10.The Vice Chairman of the Board is Takeshi Uchiyamada since April 2012 and also serve as Vice President of the Company. Mr. Uchiyamada served as executive director Vice President of Toyota Motor Corp. since June 2005, as the drumhead Production Control & Logistics Officer of Toyota Motor Corp. since 2004, as Senior Managing Director of Toyota Motor Corp. from 2003 to June 2005. He served as the Chief Vehicle Engineering Officer of Toyota since 2003 and joined Toyota in 196911. Akio Toyoda is the President and Chief executive fountainr of the company.He is also President of Toyota pay Australia Ltd. , Toyota Motor North America, Inc. and Toy ota Motor Credit Corporation since June 2009. Mr. Toyoda serves as Senior Adviser of Toyota Media Service Corporation. He has been the President of Hitachi Ltd and Honda Motor Co. since March 2009. He served as an Executive Vice President of Toyota Motor Corp. from January 21, 2005 to June 2009, Senior Managing Director and Chief of Asia & China Operations Officer since 2003 and also served as its Division General Manager of Taiwan & China Offices. He joined Toyota in 198412.The company also engage 7 Executive Vice Presidents,63 Directors, 7 Corporate Auditors, 18 Senior Managing Officers and 35 Managing Officers13. The companys top management priority is to steadily increase corporate value over the long term. In order to achieve that, Toyota builds favorable relationships with all of its stakeholders, including shareholders, clients, argument get downners, local communities and employees. In house committees and councils are apply for monitoring and discussing management of th e company from the viewpoint of the stakeholders.In 2003 was introduced the current system of management in which Chief Officers, who are directors, serve as the highest authorities of their specific operational functions crosswise the entire company, while non-board Managing Officers implement the actual operations14. Toyotas philosophy of emphasizing developments on the site, the Chief Officers serve as the link between management and on-the-scene(prenominal) operations, instead of foc exploitation exclusively on management. The company run finished different divisions all over the world, United States of America, The United Kingdom.In the UK the division is headed by a General Manager John Burton. He is trustworthy for two branches of the company, the office and shop floor. In the office part there is Assistant General Manager, Senior Manager, Section Manager, Specialist Engeneer Senior, Specialist Engeneer, Lead Administrator and Administrator. For the Shopfloor we have th e same structure till Section Manager with the adition of Group Leader- Senior, Grouo Leader, group Leader and Team Member. As a publicly traded company Toyota have issued 3,447,997,492 shares and have 668,186 shareholders. 2. The Toyota WayThe closely important created in the managerial sphere by Toyota is the Toyota Way. The Toyota Way is a set of principles and behaviors that underline the Toyota Motor Corporations managerial draw near and production system. Toyota first explained and matrimonymed up those philosophy, values and manufacturing ideals in 2001, calling it The Toyota Way 2001. It consists of principles in two gravestone areas constant amendment, and respect for muckle15. The principles for a regular advance include establishing a long-term vision, working on challenges, perpetual innovation, and going to the source of the issues or problems.The rules relating to respect for pile include ship canal of building it and teamwork. Toyotas management philosop hy has evolved from the companys origins and has been used in the terms tiptoe Manufacturing and Just In Time Production, which it was very important in developing16 Toyotas managerial values and business methods which are known collectively as the Toyota Way. Toyota uses cardinal principles for their operations Challenge Kaizen (improvement) Genchi Gen scarcelysu (go and reckon) Respect Teamwork17 some other part of the Toyota Way is the Toyota Production System.The Toyota Production System (TPS) is an integrated socio-technical system, un principalable by Toyota, that Cover its management philosophy and dos. The TPS organizes manufacturing and logistics for the company, how it interacts with suppliers and customers. The system is a major predecessor of the lean manufacturing. Taiichi Ohno, Shigeo Shingo and Eiji Toyoda developed the system between 1948 and 1975. 18 Originally called just-in-time production, it develops on the approach created by the sire of Toyota, Sa kichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno.The principles of TPS are embodied in The Toyota Way. The main objectives of the TPS are to design out overburden (muri) and inconsistency (mura), and to occur waste (muda). The or so significant effects on outgrowth value delivery are achieved by designing a process capable of delivering the required results smoothly by designing out mura (inconsistency). It is also crucial to ensure that the process is as flexible as necessary without stress or muri (overburden) since this generates muda (waste).Finally the tactical improvements of waste reduction or the elimination of muda are very valuable. in that location are seven kinds of muda that are addressed in the TPS19 1. excess of over production (largest waste) 2. Waste of time on deal (waiting) 3. Waste of expatriate 4. Waste of processing itself 5. Waste of stock at hand 6. Waste of movement 7. Waste of making defective products The system, is one of the b iggest aspect of the company, it is responsible for having made Toyota the company it is today.For long time Toyota has been recognized as a leader in the automotive manufacturing. 20 It is a myth that Toyota received their enthusiasm for the system, not from the American automotive industry (at that time the worlds largest by far), but from visiting a supermarket. The idea of Just-in-time production was originated by Kiichiro Toyoda, founder of Toyota. 21 The question was how to implement TPS. When reading descriptions of American supermarkets, Ohno saw how the supermarket operated with the model he was nerve-wracking to accomplish in the factory.A customer in a supermarket takes the desired enumerate of products off the shelf and buys them. The store restocks the given products with enough new ones to guide up the empty shelf spaces. Similarly, a work-center that regarded parts would go to a store shelf (the history storage point) for the particular part and buy (withdraw) the measure it needed, and the shelf would be restocked by the work-center that manufactured the part, making only enough to renew the inventory that had been withdrawn. 22 While low inventory levels are a key outcome of the Toyota Production System, an important element of the philosophy behind its system is to work intelligently and eliminate waste so that only borderline inventory is needed. Many American businesses, having observed Toyotas factories, set out to fire high inventory levels directly without grounds what made these reductions possible. The act of imitating without pick uping the underlying concept or motivation may have led to the failure of those projects. In 2004 a professor from University of Michigan, Dr.Jeffrey Liker published a declare The Toyota Way in which he called Toyota way a system knowing to provide the tools for pack to continually improve their work. 23 Since Toyotas establishment we have adhered to the core principle of contributing to soc iety through the practice of manufacturing high-quality products and services. Our business practices and activities based on this core principle created values, beliefs and business methods that over the years have expire a source of competitive advantage. These are the managerial values and business methods that are known collectively as the Toyota Way. Fujio Cho, President Toyota (from the Toyota Way document, 2001)24 According to Liker in the Toyota Way the people are what bring the system to life, working, communicating, resolving issues, and growing to laborher. The Toyota Way encourages, supports, and in fact demands employee involvement. It is a system designed to provide the tools for people to continually improve their work. Toyota Way means more beence on people, not less. It is a culture, even more than a set of efficiency and improvement techniques.You depend upon the workers to reduce inventory, identify hidden problems, and fix them. The workers have a wiz of urgen cy, purpose, and teamwork because if they dont fix it there will be an inventory outage. On a daily basis, engineers, skilled workers, quality specialist, vendors, team leaders, andmost importantlyoperators are all involved in continuous problem solving and improvement, which over time trains everyone to become better problem solvers. In it Liker summarized it in 14 principles. The principles are organized in four wide-eyed categories 1)Long-Term Philosophy, 2) The Right Process Will Produce the Right Results (this utilizes many of the TPS tools), 3) hang on Value to the institution by Developing Your People, and 4) Continuously Solving rootage Problems Drives Organizational Learning. 25 1)Long-Term Philosophy 1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. It is needed to stand in the short term decision making with philosophical thinking of purpose. accord that the organization is bigger than money and that long term value for the customers and be responsible. )The Right Process Will Produce The Right Results 2. Create a continuous process flow to bring problems to the surface. Time management is very important, it must(prenominal) not be wasted. Creating good flow of the work with materials and people. 3. theatrical role pull systems to avoid overproduction. Providing customers with everything they essential when they wanted it. There is no need for costly overstocking. There need to be flexibility with the day-by-day shifts in customer demand not convoluted forecasts. 26 4. Level out the workload (heijunka). (Work standardised the tortoise, not the hare. )People and weapons must not be overused. There must be leveled out workload. 5. Build a culture of stopping to fix problems, to get quality right the first time. Quality for the customer drives the value proposition. construct equipment capable of detecting problems and stopping itself. Developing a visual system to alert team or project leaders that a machine or process needs assistance. Jidoka (machines with human intelligence) is the foundation for building in quality. Problems must be solved quickly. 6. Standardized tasks and processes are the foundation for continuous mprovement and employee empowerment. Capturing the accumulated learning about a process up to a point in time by standardizing todays take up practices. Allowing creative and individual expression to improve upon the standard then utilise it into the new standard so that when a person moves on, to easily hand off the learning to the next person. 7. Use visual control so no problems are hidden. Use simple visual indicators to help people determine immediately whether there are problems. 27 8. Use only reliable, soundly tested technology that serves your people and processes.Technology must be used for supporting the people not replacing them and it can lead to reluctant implementation. Tests can determine if it is viable to use new tec hnologies. 3) Add Value to the Organization by Developing Your People 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Creating leaders inside the company and not sourcing them outside of the company. Such leaders must be role-models. 10. Develop exceptional people and teams who follow your companys philosophy. Creating a strong, stable culture in which company values and beliefs are widely shared and used over a period of many years.Corporate culture and teamwork must be adhered by the employees for exceptional results. 28 11. Respect your extended network of partners and suppliers by challenging them and percentage them improve. 4) Continuously Solving Root Problems Drives Organizational Learning 12. Go and cop for yourself to thoroughly understand the situation (genchi genbutsu). Personal observation and data collection for the problems that are encountered. Verification of information first hand. 13. Make decisions slowly by con sensus, thoroughly considering all options implement decisions rapidly (nemawashi).Straightforwardness must not be accepted, alternative solutions must be taken into account. Also using other people for gathering information and helping with the decision is needed. 14. Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen). Using improvement tools to determine the cause of inefficiencies and apply effective countermeasures. at one time waste is exposed, having employees use a continuous improvement process (kaizen) to eliminate it. Using hansei (reflection) at key milestones and after you finish a project to openly identify all the shortcomings of the project.Develop countermeasures to avoid the same mistakes again. 29 By using TPS Toyota reduced time consumption and money, while it improved quality. This helped the company become the biggest company by 2007 and be very profitable. But in new-fashioned years it looks that the TPS is not working so well or it is flea-bitten altogether. The recent technical problems of Toyota showed to some that maybe the TPS is not so good, but if it wasnt good or it cant be used anymore, Toyota would have not be able to go back to the top in such short time. The problems maybe are not part of the TPS, but rather other factors.Too big growth of the company in the 21st century. The central lead management dont allow flexibility in tackling problems. Another issue it that problems become oftentimes more obvious with the increase of quantity and this will result in much more negative situation which cant be handled or will be exploited by competitors. The complexity of cars is attributing factor to have more problems and this cant be solved by the managers. Of course TPS can be blamed in some way. It support standardisation in task and processes and when there is problem with one thing, that problem deliver everywhere where standardization is used.And finally a problem expe rienced by almost all big companies all over the world slow response to problems, because of the amount of bureaucracy that comes with complex management in big organizations. 3. Toyota managerial problems The management of Toyota today are not very successful, after the big vehicle recalls there was a serious lack of admittance by Toyota CEO Akio Toyoda that something is wrong at that was most prominently seen in his press conference about that matter where he stated cogitate me, Toyotas car is safety.But we will try to make our product better. Another big problem for the management is the dysfunctional organization structure and a secretive culture. After a problem experienced in Europe and this problem could have affected North America there was unattackable no communication between the different branches of the company. 30 Instead of admitting that there is a problem Toyota denied that there are any problems with their cars. III. Conclusion As of middle 2012 Toyota is once again the leader in the automotive world.Although the problems that plagued the company for 2 years reduced their output, profits decreased substantially and the company run into was severely damaged which led to the company losing a big sum of money and trust with their consumers, they managed to get out of the problem with relative ease. The company also realized some important things from all this 1. They could not want to be a global leader and keep all the power in the hands of the headquarters in Japan. Even though they claimed that they are delegating management to other parts of the company around the world the crisis showed something different.When a lot of the production is happening outside Japan they couldnt afford to still maintain all the power in Japan. 2. They must create friends in order to advance even if they have millions of customers. The crisis left them with no real allies and protection. 3. Toyota learned that it must maintain its story every minute. Clai ming that they are the best dont help. Consumers want to see and experience that in the real world not just through ads and statistics. 1 Wikipedia, Toyota 2 Tim Higgins Jul 26, 2012, Bloomberg, http//www. bloomberg. om/news/2012-07-25/toyota-extends-global-sales-lead-over-general-motors-vw. html 3 Wikipedia, Akio Toyoda 4 Wikipedia, Toyota 5 Christian Science Monitor, http//www. csmonitor. com/USA/2010/0129/Toyota-recall-update-dealers-face-full-lots-anxious-customers 6 BBC, http//www. bbc. co. uk/news/business-20321594 7 BBC, http//news. bbc. co. uk/2/hi/business/8493414. stm 8 Mike Milikin 8 Nov. 2012, Green railway car Congress, http//www. greencarcongress. com/2012/11/tmchybrids-20121108. html 9 Wikipedia, Fujio Cho 10 Reference for business, http//www. referenceforbusiness. om/biography/A-E/Cho-Fujio-1937. html 11 Bloomberg Business Week, http//investing. businessweek. com/ question/stocks/people/person. asp? personId=646436&ticker=TM 12 Bloomberg Business Week, http//invest ing. businessweek. com/research/stocks/people/person. asp? personId=1828739&ticker=TM 13 Toyota Global 14 Toyota Global 15 Environmental & genial Report 2003. Toyota Motor. p. 80. 16 Strategos-International. Toyota Production System and Lean Manufacturing. 17 Toyota internal document, The Toyota Way 2001, April 2001 18 Strategos-International.Toyota Production System and Lean Manufacturing. 19 Ohno, Taiichi (March 1998), Toyota Production System Beyond Large-Scale Production, productivity Press 20 Brian Bremner, B. and C. Dawson (November 17, 2003). Can Anything Stop Toyota? An inside look at how its reinventing the auto industry 21 Ohno, Taiichi (March 1988), Just-In-Time For Today and Tommorrow, Productivity Press, 22 Magee, David (November 2007), How Toyota Became 1 Leadership Lessons from the Worlds Greatest machine Company, Portfolio Hardcover, 23 Liker, Jeffrey (2004). The 14 Principles of the Toyota Way An Executive Summary of the Culture Behind TPS. University of Michig an. p. 36 24 Liker, Jeffrey(2004). The 14 Principles of the Toyota Way An Executive Summary of the Culture Behind TPS. University of Michigan. p. 35 25 Liker, Jeffrey (2004). The 14 Principles of the Toyota Way An Executive Summary of the Culture Behind TPS. University of Michigan. p. 36 26 Liker, Jeffrey (2004). The 14 Principles of the Toyota Way An Executive Summary of the Culture Behind TPS. University of Michigan. p. 7 27 Liker, Jeffrey (2004). The 14 Principles of the Toyota Way An Executive Summary of the Culture Behind TPS. University of Michigan. p. 38 28 Liker, Jeffrey (2004). The 14 Principles of the Toyota Way An Executive Summary of the Culture Behind TPS. University of Michigan. p. 39 29 Liker, Jeffrey (2004). The 14 Principles of the Toyota Way An Executive Summary of the Culture Behind TPS. University of Michigan. p. 40 30 Wall Street Journal, http//online. wsj. com/article/SB10001424052748704820904575055733096312238. html