Toyota outsourcing and offshoring analysis - Essay Example

India and many other countries and has recreated its management philosophy, work methods and adherence to productivity. This paper examines the methodology behind the off shoring and outsourcing that the company has introduced and also discusses how these practices follow the theories of Dunning and Hymer. Fang (2003) has suggested that the famed Toyota Production System (TPS) that was established by the famous Taiichi Ohno has been applied to all aspects of the outsourcing model. The authors have defined Off shoring as the relocation or creating afresh, the infrastructure and processes from one country to another.

Off shoring may be utilized for the transplanting of production, services, backend services, call centre operations, help desk support and other business functions. Outsourcing is the process of procuring core and non core business function and services from suitable vendors. The term outsourcing includes parts ad spares manufacturing, procurement of raw materials, finished goods, apparel, automobile components, outsourcing of intellectual work such as market research and others. According to the Paul (et all, 2005), when Toyota decides to offshore manufacturing base in another country, it either opens a fully owned company if the rules of the foreign country permit or it may decide to take a partnership with a like minded partner who values the principles of Toyota manufacturing company.

Other than recreating the manufacturing process by buying machines and testing equipment, the company extends the TPS model to cover other areas such as maintaining a flat corporate structure that empowers individuals to strive for excellence, hiring practices that favour the young and inexperience but who can be moulded to easily adapt to new trends, teamwork where each member helps the other in achieving goals, establishing two way open communications where people are urged to speak about their problems; non-monetary awards