Toyota Motor Corporation Innovations - Case Study Example

Toyota Motor Corporation Innovations Toyota Motor Corporation Toyota Motor Corporation (TMC) was established in 1937. At that time, it was detached from Toyoda Automobile Loomworks which manufactured weaving machinery. Sakichi Toyada was the leader of the Toyoda Automobile Loomworks at that time. Sakichi’s son Kiichiro Toyoda invented Toyota Motor Corporation. Toyota Motor Corporation is a powerful leader in the motor industry today. Innovation at Toyota Motor Corporation The business case focuses on the Toyota Motor Corporation. Toyota Motor Corporation is one of companies that have strongly moved towards organizational innovation in the recent years. It has always built better vehicles with improved fuel consumption efficiency, making its vehicles most sorted after in the world. Innovation refers to coming up with unique ways of doing things or improving on the current or existing ideas to increase organizational competitive edge. The only way to remain relevant and focused in the current business competitive landscape is to find out better ways of doing things as well as developing better products as compared with the competitors (Jolly & Design Council 2003; Stennes, 2004). Innovation is all about value addition, opportunity seeking and exploitation as well as the impact beyond technology. According to May (2007), Toyota is a double threat to several companies in the automobile industry. This is because the company does not believe on the idea that innovation is practiced by the chosen few, but a daily (routine) task that must be practiced by everyone in the organization. Toyota’s approach towards innovation has been lauded by most users who find great satisfaction because it has resulted in improved vehicles. The vehicles that are being manufactured use less fuel and produce less emissions to the atmosphere as compared to vehicles that were produced earlier. Continuous improvement of its vehicles has made the Toyota Motor Corporation to be considered as one the finest manufacturer and a good innovator in the world. Its success is largely dependant on both its production skills and technical innovation impressed by the company upon its employees. Toyota Company workers understand that it is not all about the cars being produced in the company, instead its success results from a unique creative process which starts with a seven digit number, which is one million. One million refers to the number of new ideas implemented every year in Toyota Company. These ideas are generated from every level of the organization right from the factory to the company’s suites. May (2007) claim that it is possible for companies to have an environment that promote innovation on daily basis. Toyota Motor Corporation innovation is born out of the 3c’s. The company’s 3c’s refers to creativity, challenge, and courage. Creativity is one of the key elements of innovation but it is insufficient in most companies and undertakings. Revolutionary and evolutionary creativity can create long lasting impression on both the products and employees of the company. In the real world, both revolutionary and evolutionary ideas are required to bring out enduring success. Every day challenges faced within and outside companies provide an opportunity for organizations to improve their processes and products, and become heroes as they obtain greatness when they solve problems bedeviling the world (Herbold, 2007; Roosen & Nakagawa, 2008; Schneider & McDonald, 2006). Innovation may not be realized without courage. Courage involve acceptance of the impossible challenges and the readiness to sacrifice so much to be able to turn a dream into a reality. Toyota Motor Corporation has three major principles which drive innovation. The principles are the Art of Ingenuity, quest of flawlessness and the rhythm of fit. Ingenuity refers to an individual connecting with his or her own work. Through ingenuity images of cleverness, resourcefulness, initiative, originality, inventiveness, creativity and skill are created resulting in innovation. Every individual in the company is faced with great pressure to innovate. The major rule under ingenuity is to find or discover and practice better way to do things. This can be attained through individuals following various ways possible to innovate and perfect processes. Ingenuity involves challenging resistance thoughtfully and rejecting status quo intelligently. In addition, an individual must adopt organizational efficiencies to be able to take new ideas and various methods to acceptance and implementation stage. Secondly, quest of flawlessness is road to innovation. Success in innovation results from the company’s ability to explore and implement better ways of doing things. This involves attaining low cost and low risk. Innovation at Toyota Motor Corporation was driven by the quest to attain perfection at every given level in the production process. Key departments and the whole company are always striving for excellence. According to Meeus and Meeus (2006) perfection is reached at when there is completely nothing to take away rather than in a situation where there is nothing more to add. At Toyota Motor Corporation perfection is as a result of excellence, accuracy and flawlessness. Perfection lowers cost of production because wastage is eliminated. Lower cost of production translates to lower prices of the end product. The company has improved its current products, processes and services results from its inflexible desire for perfection. The third principle that promotes innovation in the vehicle leading manufacturer is the rhythm of fit. Innovation may seem obvious to many but realizing it is not very easy. It requires individuals to be firm in their current activities while at the same time having a clear vision of the future. It calls for systems thinking rather than programs thinking. In addition, it requires well selected social environment which inspires and out rightly promotes creativity. Esty & Winston (2009) admit that there are several obstructions which hold back business innovation and throughout history. However, Toyota Motor Corporation has managed to sensitively overcome them. The company constantly swings for fences. Swinging for fences involves taking higher risks in order to expect better rewards. The leading vehicle manufacturer does not celebrate when it beats its competitors in the motor industry but rather values production of best products. Strive to produce the best vehicles to meet the current environmental and consumer demands has enabled the company to remain focus and innovative in all its processes. Such an approach set a centre stage for enduring innovation. The company is getting clever each dawn. It has learned to tailor its products to consumer’s specificities across all the market segments (Griffin, 2007; Schermerhorn, 2009). When an organization submits to competitor’s challenges or certain needs of few customers rather than concentrating in the entire market, the end result will be production of products which customers avoid. Toyota Motor Corporation has been successful in its production because it knows how to solve problems that confronts them. If companies solve their problems frivolously, it is possible to create products which differ with the core values of the organization because the company conducts their production in a hurry. In 1997, Toyota released its Prius, a passenger car which was the first to be equipped with the hybrid system. Since then, Toyota has always been on the top in this area as sales of cars that are equipped with hybrid system have increased gradually. Toyota innovations Toyota Motor Corporation created and nurtured three key innovations which gave birth to Prius. Prius was one of the most important cars in the company as it became popular because the technology used to develop it reduced fuel consumption and lowed the rate of emitting pollutants to the environment. Therefore, it solved the problems of environmental degradation and reduced the rate of depletion of fuel and oil which are non renewable resources (Yim, 2007). The three areas of innovating Prius were hybrid system, new perspective towards vehicle expansion and product development methodology. First, hybrid system was technological and product innovation that best describes company’s achievement in the current century. Toyota Motor Corporation was the first manufacturer in the world’s automotive industry to introduce a passenger vehicle equipped with hybrid system into reality (Morgan & Liker 2006). Moreover its success came up with the tangible product which was best known as Prius. The new technology that was practically innovated was referred to as Toyota Hybrid System (THS). This technology has been extended to various Toyota models such as the Previa and the Lexus. According to Liker (2006), Prius development is dated back from a certain project known as Global 21 (G21) in 1993. This project came up as in response to specific issues which included exhaust emission and depleting oil resources. These issues motivated the company to seriously consider it corporate responsibility of promoting safe and clean environment in the global arena. Second innovation in the Toyota Motor Corporation is the new perspective towards vehicle expansion. This second innovation was of great importance in vehicle development. In 1993, Toyota Company had already established its solid product pyramid, having its luxury cars well placed at the top and the popular ones remaining at the bottom. The key focus of Toyota Company in the development of new vehicles in 1993 were features, performance and dimensions, while at the same time ensuring that the company kept consistency with other models in the market. In contrast, in developing the Prius, the company did not put the existing product line into consideration. The concept of the vehicle was completely new. This is illustrated when vehicle designers and the engineers prioritized creation and development of the most comfortable seating positions for passengers when formulating the package. New concepts of 600mm from the ground level and ensuring there was upright driving posture came up with Prius. The chosen height of 600mm has been defined as an appropriate height for passengers while getting into or even alighting from a vehicle. In addition, the upright seating position is conducive because it enables drivers to have good visibility while driving with minimal exhaustion. The Prius successful did away with the initial concept that it was appropriate to have sitting position fairly low in vehicles which have sunken interiors. The third innovation developed by Toyota Motor Corporation is product development methodology. When companies are faced with tough issues which cannot be settled by the current methods, they have to introduce new methodologies. Before the end of 1995, Toyota Company formally came up with the decision to make the Prius a commercial reality. However, marketing was fixed to start on December 1997. At time however, the hybrid system was still under research. Hence the company had to run multiple processes such as element technological development, vehicle body design, and production technology development concurrently. This decision came up to attain commercial realization of the Prius within the shortest time possible. As a result, the company pursued simultaneous engineering techniques through its Resident Engineer (RE) structure. Resident Engineer (RE) structure required the designers to be relocated temporarily to the companies’ production facilities while undertaking the model development. Maxton & Wormald (2004) asserts that to improve on the quality and performance of product’s design, the designers utilized the discussions and experiences obtained from the production site. The development of the Prius improved on this idea through implementation of reverse RE whereby production engineers were stationed in the division of development engineering. Reverse RE’ process helped the company to resolve several technical issues proactively. The company facilitated previous considerations of design drawings, overlapping front end and post processes expansion, and collaborating with the company’s engineers outside their areas of proficiency. Finally designers, development engineers, design engineers and production engineers were separated into mixed teams to enable them perform various projects concurrently. The outcome of the efforts spend was great accomplishment. Prius became a commercial reality up within fifteen months since inception. Conclusion The Prius development project boosted the image of Toyota Motor Corporation and brought new product development in the vehicle industry. The direct benefits involved formation of the Prius product and the technology well known as the Toyota Hybrid System (THS) which has been used successfully in other models (Bradley, 2009). In addition, Toyota Motor Corporation is committed to ensure the number of models which are equipped with hybrid stem is increased in the near future. The company’s engineers appreciated their own technical abilities after successfully working on the Prius development. They gained confidence on the possible future innovations. Prius earned Toyota Motor Corporation innovative reputation and competitive edge as compared to other vehicle manufacturers. Toyota Motor Corporation is perceived as one of the companies that are environmentally conscious. References Bradley, M 2009, Prius, Marshall Cavendish, New York. Esty, D & Winston, A 2009, Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage, John Wiley and Sons, New York. Griffin, WR 2007, Fundamentals of Management, 5th edn, Cengage Learning, New York. Hage, J, Meeus, M, & Meeus, M 2006, Innovation, science, and institutional change, Publisher Oxford University Press, Herbold, R 2007, Seduced by Success: How the Best Companies Survive the 9 Traps of Winning, McGraw Hill Professional, New York. Jolly, A & Design Council 2003, Innovation: harnessing creativity for business growth, Kogan Page Publishers, London. Liker, J 2004, The Toyota way: 14 management principles from the worlds greatest manufacturer, McGraw-Hill Professional, New York. 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