Assessing Production for Toyota North America

Planning/Assessing Production for Toyota North America

Executive Summary

The Toyota Production System (TPS) is an integrated approach to work design that was developed and implemented by Toyota. The key characteristic of this system is that it takes into account the interactions that occur between technology and the human counterparts, which include employees, suppliers and customers. At its core, the TPS is a direct reflection of Toyota's management style and practices.

The following summary will examine the TPS, including key terms that form the framework for the TPS, a comparison of the two most optimal locations, through the use of the weighted scoring model, for the selection of the North American plant which will be responsible for the production of the new Lexus RX330 line, an exploration of the production capacities through the use of decision trees, and provide an overall assessment of Toyota's current production strategy.

I. Critical Assessment of the Toyota Production System (TPS) Today

TPS Terms

1. Genchi Genbutsu- In essence means one has to observe a problem to fully understand it. One cannot simply rely on their second hand experience and second hand accounts of their experiences. For example, during hurricane Katrina, the Federal Emergency Management Agency (FEMA) initially heard second hand accounts of the damage and devastation experienced by residents of Katrina. FEMA was unable to thoroughly assess the state of emergency and issues at hand until members of the agency were actually sent to Louisiana. This is one reason why, managers should be required to have a hands on approach to fully address, and/or plan to rectify any situation.

2. Hoshin is similar to an organization's strategic plan to reach their goals in order to achieve their desired mission. Car dealerships may want to work towards faster inventory turnover, and this can be achieved by cutting the price of vehicles and/or offering special deals/discounts on specific types of vehicles.

3. Jishuken is a continuous improvement process which requires managers to take ownership of areas that need improvement, and work with fellow staff members to measure and assess the process. It is also part of a culture of excellence, accountability and responsibility.

4. Andon is a tool similar to a Dashboard that is used to track the progress of activities and aspects of the organization such as buying trends, volume fluctuations, and financial status. The use of a dashboard offers a glance or snapshot of the business at any given time. Information is drawn from several sources to identify relevant information which is specifically tailored to the employees and management, to better understand the organizational