The Toyota Production System (TPS) was developed between 1945 and 1970 and it is still evolving today. The 1973 oil crisis hit Japan at least as hard as it hit America and Europe. By 1974, Japan’s economy had collapsed to a state of nought growth. At Toyota Motor Company, although profits suffered, greater earnings were sustained in 1975, 1976 and 1977 than at other Japanese companies.
The widening gaps between Toyota and other Japanese companies opened the eyes of others in Japan to this phenomenon called the Toyota Production System and it began spreading rapidly in Japan. Toyota branched off of the Toyoda automatic loom company, founded by Sakichi In the 1930s, when the Japanese military started fighting in Manchuria, they used mainly foreign-made trucks. Unfortunately at that time worldwide depression made money in short supply for the Japanese government, and mass production of autos within Japan would both reduce costs and provide needed jobs, giving them control and independence.
In 1936, Japan established licensing for automakers in the country, demanding that a majority of stockholders and half the ownership, as well as the officers, had to be Japanese; in 1939, imports were practically halted. In this atmosphere, the Toyoda Automatic Loom Works began to experiment, with a prototype ready in 1935, and the sale of patent rights to a weaving machine providing much of the necessary funding for experimentation and tooling. Toyoda’s car operations were placed in the hands of Kiichiro Toyoda, Sakichi Toyoda’s son.
Many credit Toyota’s success to aspects of the Toyota Production System, established by Taichi Ohno and Shigeo Shingo from the late 1950s through 1970 (when it gained the name). It includes aspects of autonomation, just-in-time production, and continuous improvement, reducing both inventories and defects. The system is used worldwide, but is only one of the reasons for Toyota’s success. The Toyota Production System (TPS) is the framework and philosophy organizing the manufacturing facilities at Toyota and the interaction of these facilities with the suppliers and customers.
The main goal of the TPS is to eliminate waste found in the TPS: defects, overproduction, transportation, waiting, inventory, motion, and over processing. By this, Toyota was proficient to greatly condense cost and inventory using the TPS, enabling it to become one of the three largest companies in the world. Years of success still infiltrate the system and there are weaknesses identified that the TPS must overcome. The automotive press criticizes the products for bland, mass market appeal. They are faced with having weak entrance into the European sedan market. TPS is often criticized for their conservative use of technology in lower end vehicles.
The system has yet to introduce the production of a company defining “super power” vehicles, like the Firebird or Z28. They are very often criticized for reworking and replicating technology from other automakers and as of this time, Toyota is having a very difficult time entering into developing markets Since Toyota production system has been created from actual practices in the factories of Toyota, it has a strong feature of emphasizing practical effects, and actual practice and implication over theoretical analysis.
This system can play a great role in the task of improving the constitutions of the companies world-wide, especially those of the automobile industry. References Farr, Max. “Automobile Industry.” Hoover’s Online. Online. Internet. November 2001 J E Beasley (cited 7 July, 02). Just-In-Time. Available: http://www.ms.ic.ac.uk/jeb/or/jit.html Strategic Management , Sixth Edition, Charles W. L. Hill, University of Washington Gareth R. Jones, Texas A&M University