MBA Summer 2010 Group 4C2 Colour

8/8/2019 MBA Summer 2010 Group 4C2 Colour

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(e. 1937)

HIGHLIGHTSToyota AA (1936)

Products market in more than 170 countries.

Production on 52 facilities in 27 countries.

Prius: - 2 years consistently voted TopCustomer

Satisfaction Car in the UK.

Y 1997: - About 2m Hybrid cars sold- 2009

Y 2008: - Worlds Largest Car ManufacturingCompany.

- Worlds Fifth LargestCompany.

Y 2006: - Innovative concept Eco Driveunleashed.

Y 2005: - Successful Lexus Brand cars wasintroduced in

the Japan market.

Y 2003: - Global Production Centre (GPC)stategy set-up.

Y 2002: - Innovated International MultipurposeVehicles

(IMV).

Contents Student

ID Ref. Page.1. Value Chain Analysis

Primary Activities A40101882-3Supporting Activities A4011715 3

2. Innovation in TMC A40232944

A4018370

3. Market-led and Product- A4021255

5Led Products of TMC A4014310

MovingForward

UpcomingToyota Avalon(2011)

UpcomingToyota EV (2010)

The Big TMutually beneficialrelationship and trustthat is placed betweenthe customer and the

The EmptySpaceGlobal expansionof Toyota'stechnology andunlimited potentialfor the future.


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4. Competitive Advantage A40106146

5. Intel R&D and Manufac- A40164927turing process compared A4015233

Support Activities

Primary Activities

[A] Primary Activities:(Researched by Student ID : A4010188) (Researched by Student ID : A4010188)

Inbound Logistics:

The key to success of Toyota Motor Corporation (TMC), commonly known as Toyota, the

part of Toyota Group, is consistent Localisationalongside Globalisation. The TMC hasemployed Lean Manufacturing andJIT Production techniques that has rational of

reducing wastages and costs of holding and storing the inventories. The required qualityand quantity of inventories are delivered on plant/site when they are needed to be used

on assembly line. Ultimately, this has resulted in improving value chain of TMCs supplierand cost base of inventories as the planning was made easy. This process was outlined

as a Toyota Wayand as of today all production plans globally follow Toyota Way2001aka Toyota Production System (TPS). Many leading corporations have tried to

adopt Toyota Wayof production processes, but, unfortunately, many failed to gain theadvantages of the system due to lack of fit with their suppliers and dealers systems.

Operations:

Toyota is a renowned international brand for innovation, quality and excellence sincemore than three decades. This success is achieved due to high precision engineering ofits innovative engines and careful assembling of parts and accessories to its dynamicrange of vehicles. Toyota is found using Kaizan(continuous improvement) and JikodaModelto stop and prevent defects. Most of the operations are done at local sitesinternationally by highly trained and skilled engineers and workers responsible fordelivering the final product. Where necessary, the TMC has affiliated/partnered itsoperations with the local companies to establish and grow its market share. Toyotabelieve in doing right first timeto ensure that the product has met its highest qualitystandard and to this end it provides extensive training to its employees at GlobalProduction Centres (GPCs) established in some international countries such as in USAand Canada where production is in large scale.

Outbound Logistics:

Toyota has effective quality control processes in place to ensure products have met theexpected standards before it leave plant. Vehicles are then transported in fleets of 30ftroad trailers, ships and sometimes by air across the globe to Toyotas sales office,dealers showroom or warehouse or to the retailers. Toyota ensures that their products


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are easily accessible and available in the market where there is a demand and apotential to grow.

Marketing and Sales:TMC manage their own showrooms where they first display their products, allow

selective customers to test drive and collect the feedback before mass launch. They havedivided their marketing strategies region wise to effectively promote their products in

individual markets in North America, Europe, Asia, China and Japan. Whatever theregion is, TMC does aggressive promotion and launch of their products through direct

and indirect effective advertisements by TMC, their dealers and partners through modernmeans such as TV adverts, brand/product dedicated websites, YouTube channel and by

traditional means through hoardings and standard newspapers. The products are firstlyintroduced to the market through participating in international exhibitions.

Services:

Toyota is well known for its high service standards through which it attract and retains

customers worldwide. It has dedicated sales, distribution and service centres for its highvalue individual brands and products such as Toyota, Lexus, Hino and Daihatsuthroughout the globe to reach and satisfy the quality expectations of the customers. In

past nine months Toyota has recalled 8 million cars and trucks in caution of possiblesafety hazard and customer defaults dictate that it highly value after sales service.

[B] Support Activities:(Researched by Student ID : A4011715)

Firm Infrastructure:

TMC has largest manufacturing facilities in USA and total of approximately 7.5m sq.ft. offactory floor worldwide. In 2008 TMC became the world largest car manufacturer

beating its close competitor GM Motors. The management has developed new ways ofproduction, training and distribution to face the challenges of the modern automobile

industry which is currently going through crisis. TMC is using industry renownedinformation technology solution to evaluate and improve its business processes that

helps them to reduce wastages, operate efficiently without holding inventory andproduce for huge market such as USA. The financial aid is provided and supported by a

special purpose company setup by TMC. Continental innovation, production, distribution,marketing and sales are managed by local companies under control of TMC, Japan.

Human Resource Management:

Toyotas objective is development of its workforce with the perception that trainedlabour can produce consistent quality of vehicles. TMC provides knowledge and language

skills training to its production employees and for other qualified employees a systematicin-house training course is structured. TMC believes in adding value to the society and tothis respect it has opened higher education technical institutes. From many campusinterviews employees are chosen to work for TMC. TMC also provides a direct careerchannel to apply for work via their websites. Once, employed, TMC takes utmost carethat their workforce is frequently and adequately trained to sustain the qualitystandards, pays sufficiently to motivate and retain employees and has effective policy forbenefits and compensation. This all efforts are to generate creative ideas fromemployees that could be implemented to achieve competitive advantage.

Technology Development:

Toyota understands and highly value technology as an important element to gain a

competitive advantage. Being a consistent innovator in bringing and using new ideas andtechnology, TMC has gained a cutting edge and a leading success in the automobileindustry where many of its competitors are currently struggling in the industry crisis.Apart from safety of its workforce and customers, Toyota has focused upon safety ofpedestrians and has concentrated its efforts to produce vehicles with Omni DirectionalCompatibility giving a 1900 rear view on a screen installed in a vehicle. Continuous
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research is carried on high safety of prospective drivers and passengers of TMC vehiclesfor death caused by head, chest or leg injuries.

Procurement:

TMCs procurement is mainly required for production, operations other service provisionsand property/site management. TMC make it purchases from its standard supplier withwhom it has created and maintained good relationships through negotiations andcontracts. TMC believes and practice fair competition, mutual growth based upon mutualtrust and contribute its global community through local procurement and production.

(Researched by Student ID : A4023294 & A4018370 )

The most significant thing to keep in mind is that the Toyota has a philosophical way ofthinking and it is not just about a series of processes or incentives or targets. TMC has adistinctive approach which defines innovation as an incremental process, in whichobjective is not to make huge sudden leaps, rather, to make things better on a daily

basis (Known as Kaizan costing in Japan which means continuous improvement).Soinnovation is taken as an everyday task for which everyone is held responsible andtrained to fashion it at a grass root level. Innovations such as Hybrid Synergy Drive,Toyota iQ and Toyota Optimal Drive has put Toyota in a strong position to lead themarket.

Hybrid Synergy drive:

At Toyota, they just do not talk about eco friendly cars, but instead they work to developtechnologies aimed at Zero Co2 emissions. Such Hybrid cars first came into the scene in1997 in the shape of Toyota Prius. Hybrid means two sources of power which are anelectric motor & combustion engine. In Conventional engines most of the energy is

wasted particularly when applying breaks, but in Toyota hybrid cars, most of the energyis recovered and stored in battery later reused at most appropriate time through anelectric motor. As of today, more than 2.3 million Toyota cars are sold worldwide thatuses this hybrid technology giving Toyota competitive edge over its competitors.

Toyota iQ:

Toyota iQ is the worlds smallest four seater car and is based on six degrees ofinnovation which made possible a creation of less than 3 meter long car yet with thespace for four seats. These innovations were focused upon:

The front Mounted Differential,

The centre take off steering gear,

The flat under tank fuel, Space saving air conditioning unit,

Asymmetrical dash board and

The ultra slim seat design.

Toyota optimal drive:

Toyota Optimal Drive is an entire range of new engines. This innovative piece ofengineering design allows transmissions to bring a step change in fuel economy andemissions across the Toyota range. Some of these new innovations are:

Enhancing performance without compromise on carbon footprint,

Stop and save engines that saves fuel in urban traffic conditions, Reduced weight and lower internal friction engines to provide optimised value control,

New 6 speed manual transmission and

Gearshift timing indicators.

By making such innovation on a daily basis, they have introduced a new philosophy TheToyota way to their entire overseas basis. It has resulted in a common conversation


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amongst business analysts that what can we learn from Toyota. By introducingenvironmentally friendly cars, Toyota showed its social responsibility all over the worldand succeeded huge market share.

(Researched by Student ID : A4021255 & A4014310)

Toyota has outlined in Y 2010 announcements that it is to provide new range of safe,

environmental friendly and high quality cars at affordable prices in coming years. Thisstatement suggests that Toyota is market conscious and pro active in terms of meeting

ever changing customers expectations. It does thorough market research beforedesigning or offering a product. This enables TMC to sustain their competitive

advantage.

For example, as part of Toyotas regional activities, they intend to increase localproduction of International Multi-purpose Vehicles (IMV) in emerging markets such as

China and India that are experiencing strong growth and mass demand for Toyotaproducts. TMCs increasing activities will enable them to respond to local demand in a

timely manner and with a wide range of products.

Also, the announcement delivered the intent of product-led approach, in which Toyotaproduce products or service is developed before Toyota can reasonably determine its

market. This approach generally is to be used for entirely new product categories. It islike holding the keys and then looking for locks to open.

Toyota has successfully unveiled concept compact hybridthat is price effective and fuel

efficient than current models which has successfully attracted and satisfied younger andless affluent buyers. Hybrid vehicles are cost effective as it consumes lesser fuel and

produce extremely low level of pollution leaving positive carbon footprints. High fuelcosts and environmental concerns have created the ideal set of conditions for

strengthening hybrid sales. Toyota also plans to introduce a battery-powered urbanminicar in 2012. These all examples suggest that Toyotas approach for marketing is

both product-led and market-led.

Toyota Operations Map in the USA
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(Researched by Student ID : A4010614 )

TMCs global competitive advantage is based upon a corporate philosophy known asToyota Production System (TPS)aka Toyota Way. The system depends in part on ahuman resources management policy that stimulates employee creativity and loyalty butalso on a highly efficient network of suppliers and component manufacturer. Toyotassuppliers and component manufacturer highly contributed their part in Toyotas successby aligning their systems and interests to that of Toyotas.

Toyota has created a culture where its competitive advantage lies in the hands of itsworkforce. Toyota has an intelligent and integrated human resources strategy thatcannot be bought or copied overnight. For competitors seeking to duplicate a well-trained, motivated and committed workforce will take almost a decade if not impossible.

Employee Empowerment in Toyota:

More than 700,000 improvement suggestions were made by its employees.

Which makes an average of 10 improvement suggestions per employee a year?

Over 99% of suggestions were implemented.

The companys approach to both product development and distribution is very consumer

friendly and market driven.

Although many car manufacturers have earned a reputation for building high quality car,they have been unable to overcome Toyotas advantage in human resource

management, supplier networks and distribution systems in the highly competitiveautomobile industry.

Examples:

1. Hybrid Synergy Drive (The worlds most

advanced automobile technology):The system offers a remarkably effective combination of petrol and electric power.

Hence, offering more power and performance, yet, it strengthens its position as most


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economical, innovative and ecologically responsible car in its clan.

Prius is the only car of its kind you can drive on electric power alone i.e. zeroemission.

It can travel up to 72 miles per gallon - thanks to Toyota Technology that hasoutperformed other cars of its kinds anywhere.

The prius does not need an electric supply to change its high

capacity battery. It simply charge by itself when it is driven.

EV mode: i.e. using electric power only Which means1. Zero emission2. Zero fuel

3. Zero engine noise4. Can drive up to 31mph and for 1.2miles electric only.

2. Solar powered ventilation (cooled by sun another Toyota first):Solar panel on the sunroof powers an electric fan that starts cooling the interior ofthe vehicle 10 minutes after parking. So, in hot weather, a refreshing cool car waitsfor your return.

3. 5-Star Euro NCAP Safety:

Prius won the NCAP 5-star rating because of the highest standard of safety is

throughout making it the UKs customer favourite as well.

Prius remarkably achieved 83% for overall protection performance.

Manufacturing:(Researched by Student ID : A4015233 )

Although the operating outcome of the TMC and Intel is totally different, one is motor

vehicle, the other is tiny little chip, the manufacturing processes of the two have somesimilarities. TMC can certainly adopt many Intels manufacturing strategy and can apply

them into their worldwide operation systems.

Looking at TMCs manufacturing stream, all the processes are divided into independentinternational operational unit (IOU) with overall control and organisational cultural flow

from the Head Office. From the rolled steel to a stunning modern vehicle, the IOU can be

located in different parts of the country likewise of Intels manufacturing plants aroundthe world. This enables the operations enjoying the advantage of different level of skilledworkers in relevant different technical areas.

Another applicable process of the Intel manufacturing operations idea that could be

applied is the methodology of copy exactly. The TMC can discover and implement theprocess rigorously as it has highly trained intelligent workforce. Implementation at grass

root level can find it way easily as Toyota has access to huge financial resources that itcan invest in training and standardising international production line/IOU. This will also

make transfer of employees, know-how and skills from one IOU to the other as a simpletransition.

By utilising its full capacity through copy exactly processes, the standardised and mass

quantities of products can be manufactured quickly and launched to meet the increasing

demands of the large market. Especially, for vehicles manufacturer identifying, defining,creating and satisfying the market demands is the key guidance for future productdevelopment and these could be done quickly by adopting Intels approach to

manufacturing.


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Research and Development:(Researched by Student ID : A4016492)

Likewise Intel, Toyota came up with the innovative and better range of its vehiclesthrough use of their intensive research and technology. This has helped Toyota tosustain competitive advantage and grow up to a extent where no one can outperformthem in the ever changing automobile industry.

Their research involved developing new sophisticated vehicles for different segments

globally considering what market needs and what best it can provide at the affordableprice. Toyota does thorough research before detailed development of new products isconsidered.

Similar to Intel, Toyota has research facilities, including homeland Japan acrosscontinents that does focused research to meet the geographical demands in USA,Europe, China and Asia Pacific. Toyota works in partnership with it dealers, suppliers andcomponent manufacturer for its product and market development. Toyota continuouslyimproves itself in regards of safety standards, environmental concerns, energy andresource efficient through research and development.

However, I strongly believe that Toyota has achieved success and a leading position in

automobiles industry because of its own innovative ideas and strongly established valuesand systems that give them a cutting competitive edge that are not required to bechange unless their strategy and operations model becomes obsolete.

Documents

MBA Summer 2010 Group 4C2 Colour