01-07-2013, 02:06 PM
COST REDUCTION STRATEGIES OF TOYOTA
COST REDUCTION.pptx (Size: 80.98 KB / Downloads: 67)
INTRODUCTION
Toyota motor is one of the Japanese biggest vehicle manufacturers, and one of the most widely known companies, in the world today.
Toyota motor was invented by kiichiro toyoda in 1937.
Revenues of 18.9 trillion yen.
It has the employees approximately 300000.
Toyota production system was “just in time” philosophy, was a key factor in the system’s development.
Toyota production system began to be adopted by the automotive industry across the world.
Toyota’s production system improved in the late in 1950’s.
Toyota has became the largest manufacturer in Japan with over 40% of market share.
Toyota launched its first small car in 1947.
The operation outside Japan started in 1959.
Toyota manufactures automobile in 25 countries all over the world, and sold in more than 160 nations worldwide under under the brand name of toyota.
Cost reduction strategies
Just in time
Eco factory and friendly concept
Reducing material cost
Good supply chain management
Value innovation
Common platform
Just in time
The key cost reduction strategy of Toyota is “just-in- time” philosophy.
This is the producing only precise quantities of already ordered items with the absolute minimum of waste. This method is adopted by the automotive industry across the world.
This is to reduce the inventory cost.
Eco factory and eco friendly concept
Toyota also use plant which is designed with eco factory concept to maximize the output with the minimum input by creating a highly optimized manufacturing process. To reduce process steps.
Eco friendly concept
They also use water brone paint and water recycling systems that recycles 40% waste water into the process.
Reducing material cost
Toyota worked hard in product development with various initiatives to reduce cost and unnecessary features from parts and systems in the vehicle.
Using light weight material.
Toyota cut the price of its car parts by 30%.
It improved the quality of their small car by keeping their cost low
To cut the price of individual parts.
Toyota saved $9billion for five years of using this strategy.
Value innovation
Toyota another cost cutting strategy “VI” for value innovation, which seeks to lump some of the tens of thousands of components in car into modules and systems.
Engineering values and value improvement programs were helpful to save in millions.