Toyota Production System Review
The Toyota Production System (TPS) operating management style has become the gold standard in the automotive industry, and even though their strategy has been attempted to be duplicated, it has yet to be replicated. The main reason behind the failures of TPS imitators is that they fall short in developing a management strategy to align the goals and objectives of all the functional groups within the enterprise. These imitators get too caught up in cost-reduction strategic decisions rather than strategies which add the most value to the customer as well as their suppliers. Toyota has tighter supplier relations then their competitors by integrating production facilities and locations with their suppliers. This gives them a competitive advantage in both quality and cost over their competition. Finally, Toyota designs their products with their customers specifically in mind to help add the most value possible to the customer. Toyota is able to concentrate on a value added strategy by using the collaborative technique discussed in class. Toyota employs cross functional collaboration between departments to identify common goals and objectives between functional groups, as well as external collaboration between their suppliers. Toyota takes advantage of their collaborative agreements with their suppliers to not only reduce costs but also to increase quality standards to enhance the value for the customer. Toyota understands that it’s most important to get a quality product from their suppliers, in a timely fashion than it is to get the cheapest product possible, while many of their competitors are focused on just the opposite. With the current economic problems and the credit crisis severely crippling demand in the auto industry, American car makers are facing a big problem in producing a quality product cheaply. Although the Big Three automakers faced similar problems in the 1980’s and survived, they have to try to survive in a much more globally competitive industry.