RUNNING HEAD TOYOTA PRODUCTION 1
DMBA620 PRODUCTION PROJECT
REVIEW OF TOYOTA MANUFACTURING & PRODUCTION
APRIL 8, 2018
Group #1
Team Members (listed alphabetically by last name):
,TOYOTA PRODUCTION 2
Executive Summary
Founded by Sakichi Toyoda, in Japan over 75 years ago, Toyoda has sustained its commitment to
produce safe, quality vehicles while also managing to exceed against competitors and while also
ensuring the safety of the environment. Toyota is known for its variety of vehicles, however, the Lexus
brand (which was produced in 1989) has advanced throughout multiple generations and is what kept
the company maintained during trying economic times.
The Toyota Production System (TPS) was the primary lean manufacturing production system of
its kind. The system considered social factors along with technical to develop management policies and
philosophies geared toward boosting efficiency and waste reduction. TPS uses Japanese words and their
definitions as guiding principles throughout the conduct of operations. These words include, but are not
limited to, Kaizen, Kanban, Muda, Just-In-Time, Gengchi Genbutsu, Jishuken, Yokoten, and Poka-yoke.
TPS has proven to be successful for Toyota over the years within the elimination of waste; yet, several
individual processes such as the usage of parts and inventory have served as constraints. The relevancy
of the system has served as another hindrance, and also the shortfalls of TPS have spurred its evolution
to lean manufacturing programs in which are familiar with today; competitors like Fiat and Hyundai, for
instance, have developed their own versions of the TPS.
In its mission to satisfy the Luxury SUV market, Toyota intends to introduce its new Lexus RX 330
line to North America thereby expanding and increasing its product base. The corporation is considering
two sites in North America for its manufacturing plant: The United States and Canada. An analysis has
been requested to aid in the decision-making process. A decision matrix analysis with weighted scoring
will be used to assess manufacturing plant factors that affect efficiency and effectiveness. Our team
found that the Canada (TMMC) plant would serve as the better location, with an overall weighted score
of 110 while the other plants TMMK, TMMI and NUMMI offered 100, 80 and 86 respectively.
Optimization and capacity calculations also favor the Canada plant with a sales price per unit of $38,000
, TOYOTA PRODUCTION 3
and an operating profit of $9,000, taking into consideration a high- demand scenario of producing of
30,000 units. Weaknesses and limitations for the Canada plant are faced in areas such as capacity
planning, efficiency and other social factors (for example, labor unions); however, the potentially high
profit margins would sufficiently justify the risks.
Toyota’s production in North America has far surpassed its expectations, with North America
taking over as the company’s global auto export hub, exporting vehicles to 19 countries worldwide; yet,
Toyota’s investment in North America may have proven costly as emerging markets in China become a
threat.
DMBA620 PRODUCTION PROJECT
REVIEW OF TOYOTA MANUFACTURING & PRODUCTION
APRIL 8, 2018
Group #1
Team Members (listed alphabetically by last name):
,TOYOTA PRODUCTION 2
Executive Summary
Founded by Sakichi Toyoda, in Japan over 75 years ago, Toyoda has sustained its commitment to
produce safe, quality vehicles while also managing to exceed against competitors and while also
ensuring the safety of the environment. Toyota is known for its variety of vehicles, however, the Lexus
brand (which was produced in 1989) has advanced throughout multiple generations and is what kept
the company maintained during trying economic times.
The Toyota Production System (TPS) was the primary lean manufacturing production system of
its kind. The system considered social factors along with technical to develop management policies and
philosophies geared toward boosting efficiency and waste reduction. TPS uses Japanese words and their
definitions as guiding principles throughout the conduct of operations. These words include, but are not
limited to, Kaizen, Kanban, Muda, Just-In-Time, Gengchi Genbutsu, Jishuken, Yokoten, and Poka-yoke.
TPS has proven to be successful for Toyota over the years within the elimination of waste; yet, several
individual processes such as the usage of parts and inventory have served as constraints. The relevancy
of the system has served as another hindrance, and also the shortfalls of TPS have spurred its evolution
to lean manufacturing programs in which are familiar with today; competitors like Fiat and Hyundai, for
instance, have developed their own versions of the TPS.
In its mission to satisfy the Luxury SUV market, Toyota intends to introduce its new Lexus RX 330
line to North America thereby expanding and increasing its product base. The corporation is considering
two sites in North America for its manufacturing plant: The United States and Canada. An analysis has
been requested to aid in the decision-making process. A decision matrix analysis with weighted scoring
will be used to assess manufacturing plant factors that affect efficiency and effectiveness. Our team
found that the Canada (TMMC) plant would serve as the better location, with an overall weighted score
of 110 while the other plants TMMK, TMMI and NUMMI offered 100, 80 and 86 respectively.
Optimization and capacity calculations also favor the Canada plant with a sales price per unit of $38,000
, TOYOTA PRODUCTION 3
and an operating profit of $9,000, taking into consideration a high- demand scenario of producing of
30,000 units. Weaknesses and limitations for the Canada plant are faced in areas such as capacity
planning, efficiency and other social factors (for example, labor unions); however, the potentially high
profit margins would sufficiently justify the risks.
Toyota’s production in North America has far surpassed its expectations, with North America
taking over as the company’s global auto export hub, exporting vehicles to 19 countries worldwide; yet,
Toyota’s investment in North America may have proven costly as emerging markets in China become a
threat.
