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Report on
The evolution of the Toyota Production System
Table of contents
Case study -The evolution of the Toyota Production System........................................ 3
1.0 Introduction............................................................................................................. 3
2.0 Identify and discuss the main issues........................................................................ 3
2.1 The matter of Mass production......................................................................... 3
2.2 Political matters................................................................................................. 3
2.3 Quality issues.................................................................................................... 4
2.4 Supplier-chain.................................................................................................... 4
3.0 Analyze fully competitive environment and Toyota’s capability and competence.. 4
3.1 Generally describe Motor Market Environment................................................ 5
3.2 The key competitors.......................................................................................... 6
3.2.1 Ford......................................................................................................... 6
3.2.2 General Motor......................................................................................... 6
3.3 Toyota's competitive in motor market............................................................... 7
3.3.1 TPS compared with the traditional mode of production........................ 7
3.3.2 Compared with the mass production mode, TPS take advantages as follows: 8
4.0 Customer relationship management......................................................................... 8
5.0 Evaluate the company’s strategy option................................................................... 9
5.1 Production system strategy............................................................................... 9
5.2 Management strategy...................................................................................... 10
5.3 Product strategy.............................................................................................. 10
6.0 Up-to-date the case study information.................................................................. 10
7.0 Recommendation for the Toyota............................................................................ 11
8.0 Reference............................................................................................................... 12
9.0Appendix -1............................................................................................................ 14
Case study -The evolution of the Toyota Production System
1.0 Introduction
According to this case study, at the beginning, the former of Toyota was a Toyoda Automatic Loom Works, Ltd. While the Toyota was found in 1933 with a small domestic company as the automobile division of Toyota Industries Corporation .Combining to the firm's management strategy, Toyota became a separate company in 1937.
2.0 Identify and discuss the main issues
2.1 The matter of Mass production
The mass production method was accepted by the method of manufacturing automobiles. Ohno Taiichi found the weakness of the basic-mass production system after visiting the U.S plant. Under this system, both various parts and stamping semi-finished products must be put in the storage firstly. All of those components were waiting for reprocessing to assemble. Therefore, the company needed a lot of warehouse to accumulate a large number of inventories. This was expensive in term of costs of warehousing and capital expenditure. There were a large number of defects in the mass production if the initial machine setting was going wrong. The worker’s job was relatively boring and single with a low responsibility for defects. The mass production is non-orientation customer preference. This basic- mass production system is not fit for the Japan domestic small market. Thus, Ohno Taiichi needed to develop a flexible system based on the mass production system.
2.2 Political matters
After the end of World War II, the United States occupied Japan. The Japanese economy implemented deflation and resulting of corporate without lending business. Toyota was serious in debt at that time; the company had to lay off a large number of workers and the results led to a serious Labor dispute and a 1950 strike. After a long negotiation, the Toyota gave the remaining employee two guarantees after cutting the 25 percent work force. The two kinds of guarantees were lifetime employment and getting company’s profitability bonus. This situation introduced a teamwork concept idea. In the early 1980’s political pressure, Toyota was reluctant to be accepted by the United Stated and Europe because of the local content regulation, importer quotas and trade barriers. Those reasons forced the Toyota to rethink its strategy.
2.3 Quality issues
Improving quality is necessary for the manufacturing automobile market. The Ohno Taiichi pointed out the quality of defects under the mass production system. Firstly, the workers had a little wariness of correcting errors because of the fixed at the end of the line. Secondly, there were enormous amount of rework defects. Thirdly, the defective parts would not be discovered until the final cars were tested. Combining the small production, the company has developed the Kanban system for the manufactory system to avoid this problem.
2.4 Supplier-chain
The volume production of Toyota increased in the 1950’s.Toyota wanted to avoid the capital expenditures and reduced the risk of sales slumped. The company did want to contract out their business to resolve the problem mentioned above. The firm built closed relationship with the supplier. This method really had an effective influence in Japanese. However, the company transplanted operation into oversee. There were oversea supplier chain network with serious quality problems. Toyota established the Supplied Support Center to change this situation in 1992. Through this center, eighty-ninth suppliers have been improving their parts.
3.0 Analyze fully competitive environment and Toyota’s capability and competence.
Since the 1990’s, the world's automotive industry has become the most typical product of globalization. Using global resources is an optimized allocation of sales in the international automobile industry to adapt to different environment and the demand of the market.
3.1 Generally describe Motor Market Environment
The industrial chain of auto industry extends on a global scale. Vertically, it is almost involving the various countries and regions of the world about the industry. Horizontally, the auto giants constantly merge and exquisite by cross-border to form huge automobile group. From regional zoon, European and American automobile production power strength remains strong since the market started early with a development and perfecting market mechanism, automobile industry constantly establishes toward mutual infiltration each other. Especially, the rapidly speed rise of the East Asia region and it has become the world's most comparable auto industry. Under this situation, the motor industries become more and more competitive.