TOYOTA

Toyota is clearly a dominate leader in automobile manufacturing today. There are 14 principles are listed and compared with some of the strategies that United States automakers have employed, it becomes clear why Toyota has succeeded as it has. The 14 principles are known as the "Toyota Way" and are listed below:


1. Base your management decisions on long term philosophies, even at the expense of short term goals
2. Create continuous process flow to bring problems to the surface
3. Use pull systems to avoid over production
4. Level out the workload
5. Build in a method to stop and fix problems when they are discovered, this ensures quality the first time
6. Standardized tasks provide the foundation for continuous improvement and employee empowerment
7. Use visual control so no problems are hidden
8. Use only reliable, thoroughly tested technology that serves you people and processes
9. Grow leaders who thoroughly understand the work, live the philosophy and can and do teach it to others
10. Develop exceptional people and teams who follow your company's philosophy
11. Respect your extended network of partners and suppliers by challenging them and helping them improve
12. Go and see for yourself so that you completely understand the situation
13. Make decisions slowly by consensus, thoroughly consider all options; implement decisions rapidly
14. Become a learning organization through relentless self examination and continuous improvement

EFFICIENCY - the most fuel-efficient full-line automaker

PRECISION - won the most Total Quality Awards since 2001

LONGEVITY - in the last 20 years, 80% of Toyota sold and are still on the road today

DEPENDABILITY - highest rate in dependability among all automakers

SAFETY - Toyota's exclusive Star Safety System comes standard on every Toyota

INNOVATION - has more hybrids on the road than all other automakers combined

In 1936, Kiichiro Toyoda built an automobile company from a business that manufactured textile looms. Both firms were named after his surname. We've always wondered: Why the change from "d" to "t"?

When Toyoda decided to start building cars, he needed a name for his new venture. His first business, the humbly named Toyoda Automatic Loom Works Ltd., was founded in 1926 by his father, Sakichi Toyoda. Keeping with tradition, he decided to name his car company in the same fashion.

In order to drum up publicity, Toyoda held a contest to establish a logo for his new venture. Twenty-seven thousand people answered the call.

The winning design consisted of the word "Toyota" — no "d" — depicted in a stylized form of the Japanese katakana alphabet. The Model AA, shown above, was Toyota's first passenger car, and it became the first car to bear the new name and logo.

The change had a few advantages: "Toyota" offers a softer final syllable than "Toyoda," and it rolls off the tongue better for us 'Americans. Writing it in katakana takes eight brushstrokes instead of the d-word's ten, which was also fortuitous — eight is considered a lucky number in Japan, and the character's shape symbolizes future growth and prosperity. A theory also exists that the adjusted spelling served to insulate the car company from the loom manufacturer; if the car firm were to have failed, the thinking goes, the older corporation would have avoided damage. Lastly, the new name represented a convenient break from Japan's agricultural past: "Toyoda" means "fertile rice fields" in Japanese.

Although the original logo was gradually phased out of export use — American-market Toyotas moved to a simple, roman-type badge and then a stylized "T" — it was retained for the Japanese market. It still adorns the Toyota Motor Company's head office in Aichi.

By end of March 2010, Toyota Motor Corporation (TMC) announced financial results for the fiscal year ended March 31, 2010.

In 2005, Toyota produced one vehicle approximately every four seconds somewhere in the world, while at the same time, setting the benchmark for product quality. Toyota perennially wins national and international acclaim in all of the major automobile quality ratings. For instance, Toyota’s flagship LEXUS nameplate has earned the top spot in JD Power’s Initial Quality Survey for over 10 years running. On top of all this, Toyota is profitable; in fact, very profitable. Toyota set record profits 2003, 2004, and 2005 earning over $10 billion annually even while their North American competitors saw significant drops in earnings and losses.


But other companies have also been successful. What makes Toyota intriguing is that its success has been sustained over an extremely long time period by most business standards. From the ashes of World War II, Toyota initially struggled to maintain solvency, but rose over the following decades to become Japan’s leading manufacturer. As it grew, Toyota began seeking markets outside of Japan, and by the early 1980’s Toyota was well established in the US market, Toyota has grown each year for the last 50 years, and has not experienced a loss in net earnings since the early 1950’s. This is standout performance in an industry characterized by cyclical ups and downs.


Toyota is also intriguing because its business and management philosophy is unique, its approach to manufacturing exceptional and counterintuitive, its collective understanding of operational dynamics breathtakingly insightful. Toyota is perhaps most well-known for its production system, first documented in a detailed 80-page handbook published internally in Japanese in 1973. The first English publication on it appeared in 1977 by Sugimori, et al., as a high level summary. However, it wasn’t until the early 1990’s that the uniqueness of Toyota’s system became well-known with the publication of the book The Machine that Changed the World. In it, the MIT professors detail the strikingly robust, flexible, and efficient systems they observed in Japan, and dubbed it “lean manufacturing” for their ability to design, produce, and deliver higher quality products in volume with a fraction of the resources of their North American and European competitors. The manufacturing community learned later that the model of lean manufacturing was the Toyota Production System (TPS).


Toyota has been remarkably open in sharing its system with others, even establishing the Toyota Supplier Support Center to provide consulting assistance to US companies wanting to operate more efficiently, at no cost to the client. More recently, we’ve come to understand that Toyota’s uniqueness extends into many other areas as well, including product development and logistics. Cottage industries are sprouting in many arenas to provide assistance and training in lean tools and concepts, and putting them into practice. Lean applications that were once targeted primarily at high-volume manufacturing plants are rapidly finding their way into other sectors of the economy, including engineering, financial services, transportation and logistics, healthcare, food and beverage services, and government (including military operations). Toyota’s impact is being felt well beyond the automotive industry.

More than 50 years Toyota is the world's biggest car maker, earning top marks from experts and customers alike for quality and innovation. Some of the reasons for Toyota's success are:

Long term planning
Instead of responding to trends, fads, and quarterly numbers, Toyota looks far down the road and tries to develop products that will resonate for a long time. The best example is the Prius hybrid which overcome the fuel problem since the gas prices and fuel economy now a top concern.

Studious speediness
Although sometimes suppliers complain that Toyota takes forever to make a decision, it is usually because the company exhaustively researches all its options, then make sure all the major stakeholders agree on a course of action. Once Toyota decides to build a car, Toyota can move a product to market faster than almost all of its competitors.

An open mind
Toyota learned many from Americans, studying Ford Motor Co's production lines and the theories of management. That helped Toyota gain a foothold in the United States, the world's biggest car market, even though the company was an outsider whose home market of Japan was vastly different. After a decades, Toyota still show a knack for figuring out what customers want, sometimes predicting American tastes better than the Detroit automakers that supposedly have home-field advantage.

Obsession with waste
Toyota's "continuous improvement" ethos is legendary throughout industry, but Magee believes the real secret is a profound disdain for inefficiency, whether it's wasted time, excess material, or a scrap of trash on a factory floor. "At a lot of companies, if something's going well and it's profitable, they'll move on to something else, Magee says. "But if Toyota can attach a hood in eight minutes, they'll find a way to whittle that down to four minutes, then two minutes, then who knows...."

Humility
The company culture of Toyota emphasizes teamwork over individual stars. "Toyota executives don't see themselves as bigger than the company or the customer or the product, " Magee writes. "It's the most humble company I've been in." The plant manager in Toyota factories doesn't even get a reserved parking space, a perk that is practically universal among manufacturing companies.

In 1936, Toyota entered the passenger car market with its Model AA and held a competition to establish a new logo emphasizing speed for its new product line. After receiving 27,000 entries, one was selected that additionally resulted in a change of its moniker to "Toyota" from the family name "Toyoda." It was believed that the new name sounded better and its eight-stroke count in the Japanese language was associated with wealth and good fortune. The original logo no longer is found on its vehicles but remains the corporate emblem used in Japan.


Still, there were no guidelines for the use of the brand name, "TOYOTA", which was used throughout most of the world, which led to inconsistencies in its worldwide marketing campaigns.


To remedy this, Toyota introduced a new worldwide logo in October 1989 to commemorate the 50th year of the company, and to differentiate it from the newly released luxury Lexus brand. The logo made its debut on the 1989 Toyota Celsior and quickly gained worldwide recognition. There are three ovals in the new logo that combine to form the letter "T", which stands for Toyota. The overlapping of the two perpendicular ovals inside the larger oval represent the mutually beneficial relationship and trust that is placed between the customer and the company while the larger oval that surrounds both of these inner ovals represent the "global expansion of Toyota's technology and unlimited potential for the future."


The logo started appearing on all printed material, advertisements, dealer signage, and the vehicles themselves in 1990.

Toyota's management philosophy has evolved from the company's origins and has been reflected in the terms "Lean Manufacturing" and Just In Time Production, which it was instrumental in developing. Toyota's managerial values and business methods are known collectively as the Toyota Way.


In April 2001 the Toyota Motor Corporation adopted the "Toyota Way 2001," an expression of values and conduct guidelines that all Toyota employees should embrace. Under the two headings of Respect for People and Continuous Improvement, Toyota summarizes its values and conduct guidelines with the following five principles:


a) Challenge
b) Kaizen (improvement)
c) Genchi Genbutsu (go and see)
d) Respect
e) Teamwork

According to external observers, the Toyota Way has four components:
1)  Long-term thinking as a basis for management decisions.
2)  A process for problem-solving.
3)  Adding value to the organization by developing its people.
4)  Recognizing that continuously solving root problems drives organizational learning.


The Toyota Way incorporates the Toyota Production System.

Kiichiro Toyoda (June 11, 1894 – March 27, 1952) was a Japanese entrepreneur and the son of Sakichi Toyoda, founder of Toyoda Loom Works. His decision to take Toyoda Loom Works into automobile manufacturing would create what would eventually become Toyota Motor Corporation, the world's largest automobile manufacturer.

Kiichiro Toyoda become the president of Toyota between 1941 and 1950. Kiichiro Toyoda made the decision for Toyoda Loom Works to branch into automobiles, considered a risky business at the time. Shortly before Sakichi Toyoda died, he encouraged his son to follow his dream and pursue automobile manufacturing. He resigned from the company in 1950 due to flagging sales and profitability, passing away four years later.