Compare and contrast Toyota’s manufacturing system with a conventional mass-production system. The conventional mass-production system advocates that by producing a limited product line in massive quantities, companies can reach efficiency as well as gain economies of scale. However, this can create a large amount of extra costs such as the warehouse rents for the excess inventories. Moreover, the extreme division of labor and long production runs increase the probability of getting defects, which will eventually lower the profit of a company. Toyota, on the other hand, applied mass production system differently in order to minimize the loss mentioned above. Firstly, auto parts were produced in small batches instead of a large amount on the purpose of reducing extra inventory costs. During this process, Toyota successfully reduced the stamping time from days to minutes, which increased the efficiency and decreased the manufacturing overhead. Also, due to the reduction in quantity, Toyota was able to expand their product diversity. Secondly, the labor division changed under this new manufacturing system. Workers were no longer responsible to a single task; they were asked to work together and seek out the errors during the production process. In that way, the inspection costs would be lower. The group work allowed workers to gain experience and skills; in other words, this is beneficial to the intangible assets of Toyota. Toyota’s manufacturing system is more cost-effective compared to the traditional one because with this system, Toyota managed to achieve high quality products with less costs.
Please join StudyMode to read the full document