NEW PRODUCT DEVELOPMENT: THEORY AND CASE STUDY OF TOYOTA

New product development: theory and case study of Toyota



New product development: theory and case study of Toyota

ABSTRACT

This paper asserts that problem identification and problem solving processes can be integrated into work processes by imbedding tests that evaluate system-performance. These tests are imbedded in individual work activities, in the connections that link those who provide a product, service, or information with those who receive it, and in the overall construction of pathways over which products, services, and information take their final form. These tests make it unambiguous when, where, and by whom problem solving is necessary, and, as an integral part of collaborative work, these tests help improve processes and deepens process knowledge, allowing an organization to be increasingly adaptive, both when it experiences operating difficulties and in determining how to exploit best market opportunities. These immediate tests are possible if work designs are specified before work is performed, and these immediate tests have most value if each indication that a problem has occurred is followed immediately by root-cause analysis and structured problem solving.

This paper builds upon observations made in the manufacturing sector to draw lessons applicable to more general management concerns of delegating/task partitioning, coordinating, and task execution. This paper shows how the specific tools of the Toyota Production System ('TPS') such as pull-systems, kanban cards, and andon cords are artifacts of a general, comprehensive approach to managing collaborative work systems that allows frequent, fine-grained problem identification and improvement in overall organizational structure, coordinative mechanisms, and task-performance. Therefore, this paper phrases Toyota's practices in terms of solving problems of work delegation, coordination, and execution.

KEYWORDS

Toyota Production System, Rules-in-Use, organizational design, process improvement, new product development

Table of contents

ABSTRACT2

Chapter 1: Introduction5

Research Context7

The Literature's Explanations Of Toyota's Operations Based Advantage8

Rules-Based, Adaptive Routines as the Source of Toyota's Advantage9

Chapter 2: Literature Review10

SWOT ANALYSIS11

Strong brand image12

Lean manufacturing12

Just in Time13

Product Innovation21

Product customization22

Suppliers22

Weaknesses23

Lack of demand analysis23

Inadequate manufacturing facilities location23

Bad racing participation image23

Design- manufacturing and testing faults24

Opportunities24

Hybrid models in Mexico24

Changes in the US consumer behavior25

Toyota: environmental friendly manufacturer26

High gasoline prices…an opportunity for hybrid models26

Toyota as a retailer of “green polyethylene”27

Threats29

Predictions of a downturn in the economy will affect car sales31

Chapter 3 methodology39

Chapter 4: Discussion41

Overview Of Design Specification, Testing, And Improvement44

Material Flow between Two People44

Customer-Supplier Connections for Assistance At Toyota Plants46

Other Specified, Self-Testing, Activities Connected Into Pathways50

Pathway Specification and Self-Diagnosis51

Connections52

Activities52

Recap: Toyota Production System Rules-In-Use55

Chapter 5: Conclusion62

References66

Bibliography71

Chapter 1: Introduction

In reaction to a race to 'best practice' -- as reflected in initiatives such as TQM, JIT, re-engineering, and 'lean manufacturing' -- Hayes and Pisano (2004) encouraged managers to re-focus on achieving strategic fit by configuring production systems 'through a series of interrelated and internally consistent choices [that reflect] the priorities and trade-offs in its competitive situation and strategy'. This had to be grounded in 'a collection of evolving capabilities … which provide the flexibility needed to embark in new directions'. This admonition fit well in the organizational theory, i.e., Lawrence and Lorsch (1967), and operations management literature, ...