Toyota Kaizen

it answers the questions f toyota kaizen case study In the early 1990s, the Japanese automobile major, Toyota Motor Corporation (Toyota) was facing acute labor shortage. The emergence of high wage jobs and a shortage of young workers due to the low birth rates in Japan in the previous two decades were the primary reasons for this. The number of women and aged people was increasing in the country's labor pool. These people avoided heavy manufacturing work.

Toyota's strong focus on improving productivity and production efficiency over the decades had created strained work atmosphere as the workers were reportedly over burdened. This led to an exodus of young workers from the company. In 1990, around 25% of newly hired young workers left the company in their first year itself. To deal with the labor shortage problem, Toyota employed many temporary workers in the assembly plants. The ratio of temporary workers in the workforce soon reached more than 10% - some work groups had around 75% temporary workers. Further, according to analysts, Toyota management's focus on increasing production efficiency by achieving higher production levels with less number of workers resulted in increased stress for the workers. This also played a major part in the worker exodus. Toyota's problems increased with by the global upsurge in car demand during 1987-1991 because of which the demand for labor shot up. As high wage jobs were easily available to the limited pool of young male workers, many Toyota workers began to leave the company.

To handle the crisis, Toyota radically changed its production management and human resource management practices. The company decided to change its working conditions to attract high school female graduates and workers over forty years. Toyota realized that it would have to rely on Kaizen for modifying its existing assembly lines to attract workers.

BACKGROUND NOTE

Toyota's history goes back to 1897, when Sakichi Toyoda (Sakichi) diversified into the handloom machinery business from his family traditional business of carpentry. He founded Toyoda Automatic Loom Works (TALW) in 1926 for manufacturing automatic looms. Sakichi invented a loom that stopped automatically when any of the threads snapped. This concept of designing equipment to stop so that defects could be fixed immediately formed the basis of the Toyota Production System (TPS) that went on to become a major factor in the company's success.