MBA Summer 2010 Group 4C2 B&W

8/8/2019 MBA Summer 2010 Group 4C2 B&W

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4. Competitive Advantage A40106146

5. Intel R&D and Manufac- A40164927turing process compared A4015233

Support Activities

Primary Activities

[A] Primary Activities:(Researched by Student ID : A4010188) (Researched by Student ID : A4010188)

Inbound Logistics:

The key to success of Toyota Motor Corporation (TMC), commonly known as Toyota, thepart of Toyota Group, is consistent Localisationalongside Globalisation. The TMC hasemployed Lean Manufacturing andJIT Production techniques that has rational ofreducing wastages and costs of holding and storing the inventories. The required qualityand quantity of inventories are delivered on plant/site when they are needed to be usedon assembly line. Ultimately, this has resulted in improving value chain of TMCs supplierand cost base of inventories as the planning was made easy. This process was outlinedas a Toyota Wayand as of today all production plans globally follow Toyota Way2001aka Toyota Production System (TPS). Many leading corporations have tried toadopt Toyota Wayof production processes, but, unfortunately, many failed to gain theadvantages of the system due to lack of fit with their suppliers and dealers systems.

Operations:Toyota is a renowned international brand for innovation, quality and excellence sincemore than three decades. This success is achieved due to high precision engineering ofits innovative engines and careful assembling of parts and accessories to its dynamicrange of vehicles. Toyota is found using Kaizan(continuous improvement) and JikodaModelto stop and prevent defects. Most of the operations are done at local sitesinternationally by highly trained and skilled engineers and workers responsible fordelivering the final product. Where necessary, the TMC has affiliated/partnered itsoperations with the local companies to establish and grow its market share. Toyotabelieve in doing right first timeto ensure that the product has met its highest qualitystandard and to this end it provides extensive training to its employees at GlobalProduction Centres (GPCs) established in some international countries such as in USAand Canada where production is in large scale.

Outbound Logistics:

Toyota has effective quality control processes in place to ensure products have met theexpected standards before it leave plant. Vehicles are then transported in fleets of 30ftroad trailers, ships and sometimes by air across the globe to Toyotas sales office,


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Compatibility giving a 1900 rear view on a screen installed in a vehicle. Continuousresearch is carried on high safety of prospective drivers and passengers of TMC vehiclesfor death caused by head, chest or leg injuries.

Procurement:

TMCs procurement is mainly required for production, operations other service provisionsand property/site management. TMC make it purchases from its standard supplier withwhom it has created and maintained good relationships through negotiations andcontracts. TMC believes and practice fair competition, mutual growth based upon mutual

trust and contribute its global community through local procurement and production.

(Researched by Student ID : A4023294 & A4018370 )

The most significant thing to keep in mind is that the Toyota has a philosophical way ofthinking and it is not just about a series of processes or incentives or targets. TMC has adistinctive approach which defines innovation as an incremental process, in which

objective is not to make huge sudden leaps, rather, to make things better on a dailybasis (Known as Kaizan costing in Japan which means continuous improvement).Soinnovation is taken as an everyday task for which everyone is held responsible andtrained to fashion it at a grass root level. Innovations such as Hybrid Synergy Drive,Toyota iQ and Toyota Optimal Drive has put Toyota in a strong position to lead themarket.

Hybrid Synergy drive:

At Toyota, they just do not talk about eco friendly cars, but instead they work to developtechnologies aimed at Zero Co2 emissions. Such Hybrid cars first came into the scene in1997 in the shape of Toyota Prius. Hybrid means two sources of power which are an

electric motor & combustion engine. In Conventional engines most of the energy iswasted particularly when applying breaks, but in Toyota hybrid cars, most of the energyis recovered and stored in battery later reused at most appropriate time through anelectric motor. As of today, more than 2.3 million Toyota cars are sold worldwide thatuses this hybrid technology giving Toyota competitive edge over its competitors.

Toyota iQ:

Toyota iQ is the worlds smallest four seater car and is based on six degrees ofinnovation which made possible a creation of less than 3 meter long car yet with thespace for four seats. These innovations were focused upon:

The front Mounted Differential,

The centre take off steering gear, The flat under tank fuel,

Space saving air conditioning unit,

Asymmetrical dash board and

The ultra slim seat design.

Toyota optimal drive:

Toyota Optimal Drive is an entire range of new engines. This innovative piece ofengineering design allows transmissions to bring a step change in fuel economy andemissions across the Toyota range. Some of these new innovations are:

Enhancing performance without compromise on carbon footprint, Stop and save engines that saves fuel in urban traffic conditions,

Reduced weight and lower internal friction engines to provide optimised value control,

New 6 speed manual transmission and

Gearshift timing indicators.

By making such innovation on a daily basis, they have introduced a new philosophy The


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Toyota way to their entire overseas basis. It has resulted in a common conversationamongst business analysts that what can we learn from Toyota. By introducingenvironmentally friendly cars, Toyota showed its social responsibility all over the worldand succeeded huge market share.

(Researched by Student ID : A4021255 & A4014310)

Toyota has outlined in Y 2010 announcements that it is to provide new range of safe,environmental friendly and high quality cars at affordable prices in coming years. This

statement suggests that Toyota is market conscious and pro active in terms of meetingever changing customers expectations. It does thorough market research before

designing or offering a product. This enables TMC to sustain their competitiveadvantage.

For example, as part of Toyotas regional activities, they intend to increase local

production of International Multi-purpose Vehicles (IMV) in emerging markets such asChina and India that are experiencing strong growth and mass demand for Toyota

products. TMCs increasing activities will enable them to respond to local demand in atimely manner and with a wide range of products.

Also, the announcement delivered the intent of product-led approach, in which Toyota

produce products or service is developed before Toyota can reasonably determine itsmarket. This approach generally is to be used for entirely new product categories. It is

like holding the keys and then looking for locks to open.

Toyota has successfully unveiled concept compact hybridthat is price effective and fuelefficient than current models which has successfully attracted and satisfied younger and

less affluent buyers. Hybrid vehicles are cost effective as it consumes lesser fuel andproduce extremely low level of pollution leaving positive carbon footprints. High fuel

costs and environmental concerns have created the ideal set of conditions forstrengthening hybrid sales. Toyota also plans to introduce a battery-powered urban

minicar in 2012. These all examples suggest that Toyotas approach for marketing isboth product-led and market-led.

Toyota Operations Map in the USA
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(Researched by Student ID : A4010614 )

TMCs global competitive advantage is based upon a corporate philosophy known asToyota Production System (TPS)aka Toyota Way. The system depends in part on ahuman resources management policy that stimulates employee creativity and loyalty butalso on a highly efficient network of suppliers and component manufacturer. Toyotassuppliers and component manufacturer highly contributed their part in Toyotas successby aligning their systems and interests to that of Toyotas.

Toyota has created a culture where its competitive advantage lies in the hands of itsworkforce. Toyota has an intelligent and integrated human resources strategy thatcannot be bought or copied overnight. For competitors seeking to duplicate a well-trained, motivated and committed workforce will take almost a decade if not impossible.

Employee Empowerment in Toyota:

More than 700,000 improvement suggestions were made by its employees.

Which makes an average of 10 improvement suggestions per employee a year?

Over 99% of suggestions were implemented.

The companys approach to both product development and distribution is very consumer

friendly and market driven.

Although many car manufacturers have earned a reputation for building high quality car,they have been unable to overcome Toyotas advantage in human resource

management, supplier networks and distribution systems in the highly competitiveautomobile industry.

Examples:

1. Hybrid Synergy Drive (The worlds most

advanced automobile technology):The system offers a remarkably effective combination of petrol and electric power.

Hence, offering more power and performance, yet, it strengthens its position as most


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economical, innovative and ecologically responsible car in its clan.

Prius is the only car of its kind you can drive on electric power alone i.e. zeroemission.

It can travel up to 72 miles per gallon - thanks to Toyota Technology that hasoutperformed other cars of its kinds anywhere.

The prius does not need an electric supply to change its high

capacity battery. It simply charge by itself when it is driven.

EV mode: i.e. using electric power only Which means1. Zero emission2. Zero fuel

3. Zero engine noise4. Can drive up to 31mph and for 1.2miles electric only.

2. Solar powered ventilation (cooled by sun another Toyota first):Solar panel on the sunroof powers an electric fan that starts cooling the interior ofthe vehicle 10 minutes after parking. So, in hot weather, a refreshing cool car waitsfor your return.

3. 5-Star Euro NCAP Safety:

Prius won the NCAP 5-star rating because of the highest standard of safety is

throughout making it the UKs customer favourite as well.

Prius remarkably achieved 83% for overall protection performance.

Manufacturing:(Researched by Student ID : A4015233 )

Although the operating outcome of the TMC and Intel is totally different, one is motor

vehicle, the other is tiny little chip, the manufacturing processes of the two have somesimilarities. TMC can certainly adopt many Intels manufacturing strategy and can apply

them into their worldwide operation systems.

Looking at TMCs manufacturing stream, all the processes are divided into independentinternational operational unit (IOU) with overall control and organisational cultural flow

from the Head Office. From the rolled steel to a stunning modern vehicle, the IOU can be

located in different parts of the country likewise of Intels manufacturing plants aroundthe world. This enables the operations enjoying the advantage of different level of skilledworkers in relevant different technical areas.

Another applicable process of the Intel manufacturing operations idea that could be

applied is the methodology of copy exactly. The TMC can discover and implement theprocess rigorously as it has highly trained intelligent workforce. Implementation at grass

root level can find it way easily as Toyota has access to huge financial resources that itcan invest in training and standardising international production line/IOU. This will also

make transfer of employees, know-how and skills from one IOU to the other as a simpletransition.

By utilising its full capacity through copy exactly processes, the standardised and mass

quantities of products can be manufactured quickly and launched to meet the increasing

demands of the large market. Especially, for vehicles manufacturer identifying, defining,creating and satisfying the market demands is the key guidance for future productdevelopment and these could be done quickly by adopting Intels approach to

manufacturing.


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Research and Development:(Researched by Student ID : A4016492)

Likewise Intel, Toyota came up with the innovative and better range of its vehiclesthrough use of their intensive research and technology. This has helped Toyota tosustain competitive advantage and grow up to a extent where no one can outperformthem in the ever changing automobile industry.

Their research involved developing new sophisticated vehicles for different segments

globally considering what market needs and what best it can provide at the affordableprice. Toyota does thorough research before detailed development of new products isconsidered.

Similar to Intel, Toyota has research facilities, including homeland Japan acrosscontinents that does focused research to meet the geographical demands in USA,Europe, China and Asia Pacific. Toyota works in partnership with it dealers, suppliers andcomponent manufacturer for its product and market development. Toyota continuouslyimproves itself in regards of safety standards, environmental concerns, energy andresource efficient through research and development.

However, I strongly believe that Toyota has achieved success and a leading position in

automobiles industry because of its own innovative ideas and strongly established valuesand systems that give them a cutting competitive edge that are not required to bechange unless their strategy and operations model becomes obsolete.

MBA Summer 2010 Group 4C2 B&W

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