Software development life cycle Submitted by: WISAM ALI

Submitted to: Prof. Dr. Wan Khairuzzaman Wan Ismail Technology Management and Innovation MRC 1043 Sem II 2009/10

International Business School Universiti Teknologi Malaysia

March 09, 2010

Table of Contents

Company Background Purpose of Study Objective of Study

Total Quality Management

Total Quality Management in Toyota

Toyota production system Innovation Process in Toyota Toyota Product Innovation Benefits of Toyota Innovations Positive Impacts of Toyota Innovation

The key reasons for Toyota success

4.0 Conclusion References

Introduction of Toyota According to statistics of automobile manufacturers, Currently Toyota is Japans largest automobile manufacturer. And in world ranking its the 4th largest company to manufacture automobiles. Toyota has factories in twenty six countries and distributers in 170 countries. It has total number of employs which exceeds 316,121 people worldwide. Toyota was founded in 1937. Toyota manufactures a wide range of automobiles, from luxury SUV to gas powered cars, pickups, vans and sports cars, Toyota deals in wide verity of cars. Since many years Toyota is manufacturing many models which are very famous in consumers, few names are camry, corona, corolla and Lexus. Toyota Company is very young in automobile industry as compared to giants like General Motors (GM) and Ford etc. Although having less experience, Toyota has manages to gain competitive advantage over their competitors and have captured a huge share in market. now Toyota has become one of the strongest and stable company in automobile industry. Toyota has gained leading edge over its competitors in the field of product development, vendor management, human resource and most importantly its manufacturing. According to a news network of Japan corporate, only in one year of 2007 Toyota has sold over 8.5 million of units. Unlike other, automobile manufacturing companies, Toyota believes in localization and collaboration with other manufacturers in foreign countries in order to be a leader in this field. Few of the major consolidates subsidiaries for Toyota are locates in North American, Latin America, Asia and Europe. Toyota has influenced the automobile industry in many ways. Besides being a huge economic entity, Toyota is famous for its less cost business steps by cost cutting initiatives. Also its highly influencing the cooperate philosophies which permeates through all layers of TM. Infect many automobile manufacturer companies are following the footsteps of Toyota and their innovation and marketing strategic based case studies

are taught and quoted across the world. Toyota is also known for its production system, Toyota Production System (TPS), and their innovative process of TPS has become the standard of efficiency for other players in the industry. Purpose of Study The purpose of this report is to learn about the innovation concept of Toyota and analyze the concept of their management integrated with their technologies. Also in this report, we will investigate the process of the innovative function of Toyota and how these processes are formulated within the organization. Objectives of Study Following are the objectives of this report; To study the innovative factors and innovative strategies of Toyota for their progress To identify and specify the role of innovation in Toyota To study the recent new innovation strategies that are adapted by Toyota to maintain their leadership to their competitors. Total Quality Management: Total Quality management was first introduced in 1950s and is considered as very essential management style. This field of management became more famous in 1980s when the technology grew with double rates. Effective TQM relies on strong internal team and external team building.

Total Quality Management provides the skills using which any organization can develop and maintain the quality in production level. This works horizontally in the management of any organization and it need a strong team work because this helps to avoid mistakes before the implementation of Total Quality Management Strategies. In horizontal management all the departments and all the employs of particular departments are included, where as all the supplier and clients comes under the vertical management of total quality management. Total Quality Management revolves around the implementation of plans for effective quality and effective productivity. This in turns raise the profits a lot and this give company a competitive up-lift. Total Quality provides the culture to an organization that tends to serves customers in more effective and beneficial ways. That satisfies the entire needs of client that are attached to product. Total quality management ensures the quality of product in all the process of its development and manufacturing. Defects are identified and remove at each operation of the process. To be effective and more productive the quality management should improve continuously upon by employees as well as management. Today total quality management has become a basic tool to management and a key strategy for success in service and public organization. Total Quality Management in Toyota: According to kaizen company philosophy, Economic success only comes when the customers are convinced of the quality of the product. At Toyota the quality of their product is the root cause of their success and their dominance factor over their competitors. Toyota always works towards the improvement and innovation in their process oriented efforts.

Their high quality in their product as well as in their management systems is considered exemplary today in production systems. Toyotas management philosophy which they are following from start is their lean manufacturing and Just In Time production. Toyota philosophy has four major components; 1. Long term thinking and planning 2. A well organized process for solving problems 3. Developing its people which adds value to the company 4. Recognizing that continuously solving root problems drives organizational learning

Toyota Production System Toyota production system, also known as TPS is the technology of production management which Toyota follows. This management of production was invented by Japanese and its technology with which Japanese companies have become leaders in worlds group of companies. Basic idea of this system is to keep the production line flowing continuously in order to flexibly adapt to demand changes. TPS does not mean to produce without looking at the customer requirement. It means to produce only necessary units in necessary quantity in a necessary time. This follows the Just in Time production methodology. Producing just the necessary in necessary time will automatically diminish the inventories of each production. That will as a result lower the excess of work naturally. This will improve the productivity of organization and will reduce the manufacturing and overhead costs at large extent. Just In Time production is sometimes also referred as orthodox way of production management. It is thought as a rational system. But when this concept is applied in reality, it removes the inventory management of finished product and unnecessary intermediate. However reducing its manufacturing cost is not the only goal of this system; there is few other goals which constitutes the primary objective. These goals includes Quantity control: This enables the system to adapt fluctuations in demand of product, in term of its quantity and variety Quality assurance: This enables the system to process product in such a way that only those products are passed to next process which are good in condition Respect for Humanity: This enable system to use human resource in a way that maximum output can be attained.

All goals combine to form a primary objective of the company and its ultimate purpose is its productivity. Toyota production system always strives to meet each of the above mention goals for its maximum production. Innovation Process in Toyota An important part of the TPS is its Just in Time inventory system, which all the Toyota manufacturing subsidiaries are required to inculcate in their production lines. Toyota production system provides the framework and philosophy to organize manufacturing facilities. JIT is root of TPS. JIT inventory system was first used by Henry Ford in year 1920s, however several years later it was adapted by Toyota in 1950s, and after Toyota adaptation it was refined to lift the level of efficiency. New modification of JIT, which Toyota applied brought great success to the company and due to this company has become world leader in employing Just in Time system. Just in Time production is all about having the product ready on shelf when it is required, thus removing the overheads to handle wide and huge inventories and save costs subsequently. Besides saving up the cost of inventories JIT also provide benefits for the engineering improvement to take place more frequently and more quickly as compare to other traditional systems of production. With not or very less stockpile in inventory, problem with the newly delivered items can be detect because they are used on the same time when they are delivered. This will lead to the high efficiency of the product. Kaizen is the philosophical outworking of continuous improvement in the TPS. Implementation of this philosophy delivers greater improvements. It makes the workplace environment more pleasant when kaizen philosophy works perfectly. This theory also teaches employees to do fast experiments by scientific methods.

Jidoka(Human Automation) is place where Toyota combines the most efficient elements of technology with the human intuition and passion. In production plant, assembling line are not planted in long pathways but the conveyers moves in U-shapes work cells. These production lines are designed to minimize the operation to complement JIT system with less movement, handling and inventories. Good machines better men and better machines good men are the skills of competitors of Toyota. But jidoka makes this sure that in Toyota TOP system best men works with best machines. These extraordinary blends of skills make Toyota successful when compared with its competitor. Besides the most effective blend of machine and labor Jidoka also encompasses other concepts of production which states that problem should be fixed only when it is occurred. This gives satisfaction to the end user. So in TPS if there any problem occurs in production line, it get fixed within the shortest period of time. Secondly, its one more school of thought states that person who is nearest to the production process should know about is and that person should possess the skills and knowledge to improve the output of the unit. Toyota Product Innovation Main driving force behind the Toyota motors corporation is its ability of innovation. Toyotas history, guiding principle, practices and foundation are guided by ideas of innovation. Toyota is producing some of the most innovations which has raised the Toyota motor corporation high and it has become one of the top ten most profitable companies in the world. Toyota is also achieving huge market share with its innovative ideas. With increase in the prices of gasoline and increase in environmental issues, Toyota has been shifting its focus towards E-cleaner cars. That is more environments friendly and uses alternative

sources of energies. This is strengthening Green Revolution. Hybrid cars of the cars what make efficient use of both and internal combustion engine and another source of energy, such as electricity. The emission produced by hybrid cars is 10% less than the emission produced by average petroleum or diesel powered cars. For this reason, Toyota built electric-petroleum hybrid car which contains both petroleum engine as well as electric motor. Electric motor is used when car is moving in slow speed but when car kicks higher speed, petroleum engine holds the control of car which saves fuel double them its saved in typical petroleum cars. To prolong usage of electric motor used inside car, the batteries of motor get charged when breaks are applied while driving. So even the friction force produced by break system is not wasted away and is utilized to charge batteries of electric motor. Electric- petroleum hybrid cars are in market since 1990s but it was not known until world witnessed Toyota Prius, in 1997. Toyota first ever mass-produced hybrid car. Success of prius was great and it surpasses all the expectations of Toyota as well. With trend of hybrid cars spreading worldwide, Toyota is now working to slash its production cost to make these hybrid cars more economical and affordable. Toyota has aimed to produce one million hybrid cars by 2010. This goal, if achieved, will be the first step into motor industry revolution. Benefits of Toyota Innovations: Benefits have been re aped my Toyota from the start due to its rapid changes and this being their method of innovation. Toyota Motors Corporation has become a motor manufacturing company which product is affordable by common man and are more reliable. This trust and loyalty of customers plus the dedication of their work has become many beneficial for Toyota since many decades. Toyota has gradually gained the major portion of market share of automobile industry. In 2000, market share of Toyota was 9.3% in USA automobile market, which has grown rapidly

in past few years and just in 6 years Toyota had managed to capture 14.6% of the market share of United States of America. In 1999, Toyota was worlds 4th largest vehicle maker company in the world, but it has not overtaken Volkswagen and Ford and has become 2nd largest automobile manufacturing company; they claim to beat No. 1 General motor in near future. From 2003 to 2005, Toyota has managed to reduce the cost of manufacturing for their engine for its award winning model of Camry. Toyota has reduced the cost to half of the previous amount. This increadible achievement is due to the influence of Kaizen. Over 300 engineers in Japan contributed to a simple way of cutting cost effectively. Positive impact of Toyota Innovation With glorious history of innovation, Toyota has made an impact to the people at large. From industrial point of view, Toyota has impacted automobile market worldwide at illustrious level; with its attractive scale of economy and its tremendous level of efficiency used in innovation technology of manufacturing automobile. Toyota has rightly have increased the competition in the automobile industry, specially for US giants like Ford and General Motors (these giants are quickly losing their market share to Japanese companies like Nissan, Honda and Toyota). This high scale, high energized competition results in the faster development of technology in automobile industry. An example of this is the push for GM to be more efficient in order to respond to the Toyota threat. As stated in Bloomberg market report, as an answer to Toyota threat, GM is aggressively improving and innovating their production techniques in order to cut production time Since Toyota has been nominated in fortune 500 companies, many other tier companies are paying more attention now toward the Toyota process of manufacturing and managing

technology (Especially companies with core competencies in manufacturing in automobile industry). Following Toyota many companies are now stepping forward to transform their approach to business as per JIT inventories system. In a way, it can be rightly said that Toyota has manages to increase efficiencies worldwide by popularizing the JIT system and giving it an aura of realization. The key reasons for Toyota success Successful brand Toyota has developed an image of trusty and reliability with low cost model of cars which offers best quality of technology, performance and for being environmentally friendly. Innovation It was the first car to be manufactured using the lean manufacturing system, known as Toyota production system. Which is fast and more efficient process which lead less waste and less inventories overhead. Toyota has also been on forefront by applying Just In Time(JIT) manufacturing system and smart automation Product Development key factor in the success in car market is new models which fulfill demands of customer, in return they get loyalty to Toyota brand. Toyota is developing a very positive image in society by producing cars will low few consumption and more greener and better proformance cars. Toyota was the first car manufacturer to market hubrid fuel car with the launch of Prius in 1997, ahead of competitors. Global Manufacturing Model Toyota has move to every corner of the world to become global brand of manufacturing of automobiles. Car manufacturing sites and facilities are expensive and it requires high fixed cost investment. Toyota has chosen those sites where factor costs are lower, without compromising on quality, and now Toyota is manufacturing its parts on

different sites and then assemble is on different sites. And these assemble units are spread on many different locations around the world. Utilization of technology Toyota is utilizing technology in businesses more then ever before, now ery few meetings held in Toyota corporation are face to face. Government across Europe are encouraging car-share policies as an alternative forms of transport. These factors are increasing the demand of new cars. Conclusion Toyota has become a worldwide brand now and its is well-known and famous automobile industry in worldwide. Everyone prefers to buy a car of Toyota brand. Not only because of its brand popularity of customer loyalty. Its because Toyota is the only company which provides the latest technology in automobile industry with very affordable price. Toyota provided excellent customer servie and innovative technologies. With innovation like hybrid products, Toyota has created a very positive impact on the society and proved to have potential being the pioneer into new eras of automobile manufacturers. Although its fixation on lower cost may at the same time bring negative influences with price being the top priority over quality and durability of its products. In spite of that we feel that the benefits that Toyota renders to society still are far overweight and more positive than negative. Toyota gained success in innovation and production of hybrid vehincles, on the same time it has combined licensing agreements with other manufacturers, increased government emissions regulation, and a full fledge saturated marketing compaign, hybrid automobiles will take over the US market very soon. Toyota is standing on right spot by being the pioneer of this hubrid techonolgy and will become global standard in hybrid fuel vehicles soon. With this lead in

hybrid technologies, Toyota is in an auspisios position and would soon beat General Motors and will become No.1 automobile manufacturer in the world in near future. In Toyotas management of technology we learnt a lot about how a firm can apply theoretical management skills into practical on the real situation. Toyotas organization and technology management methods work seamlessly with their marketing strategy in a way which has never achieved by organization of such a gigantic size, like Toyota References

Liker, J (2004). The Toyota Way:14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill. ISBN 0071392319.

Ren Haak ( (2006) Implementing Process Innovation The Case of the Toyota Production System , Management of Technology and Innovation in Japan. Springer Berlin

HeidelbergISBN978-3-540-25326-6.

http://www.toyoland.com/history Toyota History www.toyota.com