TOYOTA STRATEGIC CAPABILITIES

TOYOTA STRATEGIC CAPABILITIES

Background of the Auto industry

            The auto industry under consideration is Toyota Motor Corporation. Being among the premier auto-manufacturing industries in the global environment, it offers a vast variety of automobiles from mini-vehicles to huge transportation vehicles. It was generateed in 1957 by Kiichiro Toyoda, son of Japan’s “King of Inventors” Sakichi Toyoda (Toyota, 2005). As part of the brands of Toyota, the auto industry, likewise holds the brands of Lexus, Daihatsu as well as Hino. All of these brands have been able to market over 6 million units from January to September of the year 2005. The auto industry has been able to manage and handle over sixty plants all over the world which generates as well as generateed the Lexus and Toyota vehicles along with its component parts.

 

Strategic Capabilities

            The country of Japan is the centre of the operations of the auto industry.  For instance, in Japan, there are a total of twelve plants within the Toyota City as well as the other parts of the Aichi Prefecture. Likewise, there are also manufacturing firms in Kyushu, Hokkaido, and Tohoku. On the other hand, the auto industry has over fifty manufacturing firms overseas. Outside Japan, manufacturing plants are located in twenty-six countries and regions. The auto industry uses their kind of quality and standard automotive frameworks. In terms of the capabilities of their designers, Taiichi Ono (1978), Toyota’s production system (TPS) was generateed so as to go up against the fixed mass production arrangement of Western car manufacturers and makers, whilst satisfying the local demand outline necessitating an expanded small-lot creation. The organisation started work on this system just about 1950 and had generally finished it by the mid part of the 60s. It was, nonetheless, merely in the advent of the first oil crisis of 1973-74 that the adaptability of the system was noticeably improved and started to be a focus for attention from other organisations (Ono, 1978). Throughout the high-growth 1960s Japanese car factories grew to be extremely automated, but individual production lines needed moderately static amount of staffs despite of the actual production levels. Toyota was not an exemption in this reality. As it encountered a diminishing market, the auto industry tried to invent production lines which could operate with a bigger or lesser labor force in keeping with the actual workload, preserving sensibly high efficiency even at a condensed rate of production.

            Part of the strategic capabilities of Toyota includes the strategic capabilities of the supply chain.  The pattern and organisation of a supply chain is perceptibly a comprehensive topic, concerning inter-dependencies between research and development, marketing and production roles, creating considerable courses of goods and technical, market and financial information. The geographical arrangement of a supply chain relies on location-precise and relational components (Levy, 1995) Location-precise components, like wages and resource accessibility; generate the most favourable location for every action in the chain when accounted separately from the rest of the chain. Relational elements manipulate the cost of incorporating actions in the chain and rely on the connection involving one action and the rest of the chain.

The determinant about the first four stated features rely openly on the staffs’ intellectual capabilities by this means causative to the rehumanisation of assembly work by means of instruction for several duties (multi-skilling) and setting off their “thinking” capability not only as assembly personnel but at the same time both as on-line quality examiners and upgrading planners. The flexible production frameworks thus no longer cares for the staffs purely as “brawn workers” who merely acquire instructions under the Fordist-cum-Taylorist frameworks. In its place, it utilises them as “brain workers” who are able to understand operational dilemmas on their own, proposing methods of resolving them, and enhancing their own work practices.

In terms of strategic capabilities approach, more executive power is thus handed over to the staffs. Shimada (1988) depicted the new frameworks as a shop-floor operation of “humanware”; Aoki (1990) understood it as a dynamic employment of “the information-procedureing ability” of staffs; and Koike and Inoki (1990) envisioned it as “white-collarisation” (i.e., professionalisation) of blue collar personnel. In a word, flexible production is therefore an anthropocentric (more willingly than technocentric) method of sorting out and managing manufacturing movement. It reinstates, supports, and uses the intellectual capability of staffs.

At the same time, the auto industry also works to enhance the organisation and efficiency of its staffs through the generatement of the Global Production Centre within the Motomachi plant, Toyota City. The centre presently trains 2,400 staffs over a three-year period on an original curriculum. (Annual report, 2005) According to Cho, the centre aspires to develop “tough, multi-skilled global human resources”. (Cho, 2004) Furthermore, the centre provides staffs with a wide-range of knowledge and capabilities that will allow them to transfer professional know-how to managers and subordinates at local production sites as well as attain self-reliance and competitiveness. This procedure is integrated within the Toyota production system. Each strategic capabilities approach is used to ensure that the auto industry will be able to maintain high quality and satisfying products for its target market.

 

Reference

Aoki, Masahiko. (1990) “A New Paradigm of Work Organisation and Coordination. Lessons From Japanese Experience.” In The Golden Age of Capitalism: Reinterpreting the Postwar Experience, edited by Stephen Marglin and Juliet Schor, 267-293. Oxford: Clarendon Press.

 

Cho, F 2004, ‘Toyota Motor Corporation: Information meeting in New York’, Toyota, Available at [www.irwebcasting.com]. Accessed on [28/06/06].

Koike, K., and Inoki, T. (1990). Skill Formation in Japan and Southeast Asia. Tokyo: University of Tokyo Press

Levy, D. (1995) International Sourcing and Supply Chain Stability. Journal of International Business Studies. 26(2)

Ono, Taiichi. (1978) Toyota Seisan Hoshiki (The Toyota production system). Tokyo, Daiyamondo.

Shimada, Haruo. (1988) Humanware no Keisaigaku (Economics of Humanware). Tokyo: Nihon Keisai Shimbunsha.

Toyota (2005), Toyota in the World Databook. Available at [www.toyota.co.jp/en/pdf/toyota_world/2005/chap5.pdf]. Accessed on [28/06/06].

 

 

 

 

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