Competition has gone global and the market and industry dynamics have necessitated the need for companies to make concerted efforts streamlined towards ensuring that high-quality goods and services are offered in the market at competitive prices. This has resulted in the adoption and implementation of several tools and strategies geared towards the attainment of the aforementioned goals. One of the strategies that have been soundly embraced by a multitude of companies is the adoption of new technologies that have led to a paradigm shift towards quality production at reduced costs.
Toyota Motor Corporation is a multinational motor company headquartered in Japan. It remains the world’s best automaker and controls not only the largest market share in the United States but in the rest of the world as well. This company has managed to achieve this feat because of its lean manufacturing techniques and adoption of innovative and new technologies. Founded in 1937 by Kiichiro Toyoda, Toyota Motor Corporation has effectively managed to turn technological management into a competitive weapon.
Two strategies that have been employed by Toyota over the years are lean manufacturing and the adoption of new technologies. This has effectively enabled it to attain a competitive advantage through cost leadership, differentiation and focus. The principles of lean manufacturing were first adopted by Toyota and the Toyota production system (TPS) is what is today generally referred to as ‘lean manufacturing’. It can be defined as “a business system and a generic management philosophy with a systematic approach to eliminating waste through continuous improvements” (Womack & Jones, 1996).
The historical background of the lean manufacturing techniques can be stemmed back to the era of Fredrick Taylor, who was the architect of the basic principles for improving mass production. The theme was picked up in the 1920s by Henry Ford who implemented many revolutionary manufacturing tools aimed at improving productivity in the automotive industry. The Toyota production system (TPS) was the end product and this was seen as a form of operation that would ‘eliminate wastes and allow production to flow in a continuous manner without interruptions’ (Macduffie, 1997).
The ‘lean manufacturing’ paradigm has shifted and is nowadays being employed and implemented in many sectors in the US economy as a lot of companies seek to improve the quality of products, reduce production costs, attempts to be first in the market and respond in time to customers demand (Macduffie, 1997). The principles of lean manufacturing are centered on creating continuous improvements and developing a steady fast culture that is customer-oriented and which engages employees so that there is reduction in the intensity of time, materials and capital. The fundamental focus is on the systematic elimination of non-value-added activities and waste from the production process (Johnson & Wemmerlov, 2004). Here, ‘waste’ is viewed as ‘any use or loss of resources that does not lead directly to the creation or production of a commodity that a customer desires’. According to (Macduffie, 1997), “these ‘non-value adding’ practices may constitute up to 90% of a company’s total activities.”
The effective management of technology not only remains a lethal and effective tool for competitive advantage but also a source of reduction in the costs of production. The adoption of sophisticated technology for flexible body welding remains one of the most appreciated technological management Toyota Motor Corporation has adopted to date. The motor Industry has remained highly competitive and Toyota could not be left behind. According to Pavitt (1990), the drive towards seeking the economies of scale pushed Toyota to automate its welding process. This was important to Toyota because high levels of competition in the motor industry. To remain competitive, there was the need to explore various strategies in the adoption of new technologies capable of satisfying the customers’ needs and demands while at the time taking the advantages of the economies of scale.
To date, technological advances and innovative tools are being adopted in every step of an entire process, from customer service to supply chain management with a central view of taking advantage of the economies of scale. Selective approach to the introduction of this new technology was thoroughly analyzed and carried out. This is buttressed by Probert and Gregory (1995) in stating that Toyota adopts anew technology only after a rigorous experimentation process that takes into consideration the operational culture and cutting edge technology.
Pavitt (1990) explains this adoption approach by Toyota that describes the process of technology evaluation and testing to ensure its value addition before it is finally implemented. In the adoption of sophisticated technology for flexible body welding, Toyota had to look into added advantages and new opportunities brought forward by this new technology. The next line of approach is to involve the application of a pilot area to study the technological management and process and its improvement on the workers.
The adoptions of both lean manufacturing practices and technological advances have seen the realization of objectives that fit into the overall mission of the company. This has led to cost reductions in the manufacturing, differentiation of products from those of competitors and focus on capturing and retaining the market.
References
Johnson, K. and Wemmerlov, S. (2004). Efficacy of Lean Metrics in Evaluating the Performance of Manufacturing System. Milwaukee: University of Wisconsin.
Macduffie, L. (1997). New Industry Specific Quality Certification. Quality Progress, Vol. 35, Issue 6.
Pavitt, K. (1990). What we know about the strategic management of technology? California Management Review, Vol.52, No.3, pp.17-26.
Probert, D. and Gregory, M. (1995). A process model for the management of technology: mapping techniques and sectoral characteristics, Proceedings of the International Association for Management of Technology Conference, Aston, pp. 431-438.
Womack, J and Jones, D. (1996). Lean Solutions: How Companies and Customers Can Create Value and Wealth Together. New York: Simon & Schuster.