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2014 | OriginalPaper | Chapter

4. The Toyota Way

Authors : Shang Gao, Sui Pheng Low

Published in: Lean Construction Management

Publisher: Springer Singapore

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Abstract

Toyota is worthy of in-depth study because the company is good at manufacturing (Liker 2004; Sobek and Smalley 2008). Every automotive insider and many consumers are aware of and familiar with Toyota’s stunning success in terms of its reliable products, high productivity and increasing profitability every year (Liker 2004). Toyota became the world’s leading auto manufacturer with approximately 15 % of the global market share in 2005. Toyota’s market value (US$177 billion in 2005) exceeds the combined value of General Motors (GM), Chrysler, and Ford (Morgan and Liker 2006). One reason for this success is the quality of Toyota products. According to the recent U.S. Vehicle Dependability Study published by J.D. Powers and Associates (2013), Toyota motor models earn seven segment awards for higher quality and less problems experienced by car owners. Moreover, Toyota is the most productive company, according to the Oliver Wyman’s (2008) Harbour report on the North American automobile industry. Toyota and Chrysler led the six largest multi-plant auto-makers in total manufacturing productivity, averaging 30.37 labour hours per vehicle (GM averages 32.29 h per vehicle, while Ford averages 33.88 h per vehicle). It is worth noting that Toyota fabricates and assembles a greater percentage of its vehicle parts with its own employees, while the big Three (GM, Ford and Chrysler) purchase many modules and subassemblies from suppliers, thus saving labour. Although productivity gains are essential to a company’s success, it is profitability that keeps the business growing. According to Oliver Wyman (2008), Toyota earned US$922 pre-tax profits per vehicle produced in North America in 2007. In contrast, Ford, GM and Chrysler lost US$1,467, US$729 and US$412, respectively.

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Footnotes
1
J.D. Powers and Associates is a global marketing information services firm, which is best known for its customer satisfaction research on new-car quality and long-term dependability.
 
2
Gary Convis is a managing officer of Toyota and President, Toyota Motor Manufacturing, Kentucky.
 
3
TMMK refers to Toyota Motor Manufacturing, Kentucky in the United States of America.
 
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Metadata
Title
The Toyota Way
Authors
Shang Gao
Sui Pheng Low
Copyright Year
2014
Publisher
Springer Singapore
Book
Lean Construction Management

Print ISBN: 978-981-287-013-1

Electronic ISBN: 978-981-287-014-8

Copyright Year: 2014

DOI
https://doi.org/10.1007/978-981-287-014-8_4