Toyota's Kaizen Experience

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Case Details:

Case Code : OPER006
Case Length : 12 Pages
Period : 1990 - 2002
Organization : Toyota
Pub Date : 2003
Teaching Note : Available
Countries : Japan
Industry : Automobiles

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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About Kaizen & The Toyota Experience

Under Ohno's guidance, Toyota adopted many operational practices that later became benchmarks for production practices across the global corporate world. It was one of the first companies in the world to adopt practices such as Kanban, Jidoka and JIT. However, Kaizen kept TPS, JIT, Kanban, and Jidoka working smoothly as an interlinked strategic operational plan. Some analysts even felt that Kaizen was the major contributor to the company's global success.

The founder of the Japan-based 'Kaizen Institute,' Masaaki Imai, defined Kaizen in his book, 'Kaizen - The Key to Japan's Competitive Success' as, "Kaizen means continuous improvement in the personal life, home life, social life and working life."

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

When Kaizen is applied to the workplace it means continuous improvement for - managers and workers. Thus, Kaizen involves everyone in an organization to make improvements 'without large capital investments.' It can be seen as a culture of continuous sustained improvement focusing on eliminating waste in all systems and processes. The Kaizen strategy begins and ends with people. With Kaizen, an involved leadership guides people continuously to improve their abilities to meet high quality expectations, low cost and on-time delivery, which in turn helps the organization gain a competitive edge...

The Modification

The modification began with the management deciding to allow plants to set their own annual production efficiency targets. The production divisions council, which checked the plants objectives occasionally modifying them, taking into account the company's profit targets, replaced the production allowance councils. After approval, these objectives became the Kaizen norm of each plant in terms of production efficiency. The method of determining the production efficiency was altered to make it less constrained as the standard time was fixed by measuring the time really required for worker's operations whereas earlier standard time was fixed on the basis of the best standard time marked in the past...


Exhibit I: Toyota - Business Results (Consolidated, US GAAP)
Exhibit II: Toyota Production Statistics

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