In the News

SWOT analysis for the future of Toyota and Uber

Penny Brooks

12th June 2018

Kaizen was the principle that drove manufacturing industry over the last few decades. Continuous improvement and relentless elimination of waste, through cutting costs and controlling quality, were at the heart of Toyota's manufacturing programme that was imitated throughout the world. Not just in manufacturing - Toyota also inspired Amazon founder Jeff Bezos to keep lowering prices through the elimination of defects, waste and costs. Now, car manufacturers are under threat from technology as consumers are more likely to use ride-sharing apps like Uber than to buy cars, and the traditional model of vehicle assembly may not be enough to maintain a business.

It makes sense, therefore, for Toyota to find ways of using their strength in the kaizen philosophy  to overcome the threat.The FT is reporting this move and here is an article that is great to use when considering operations management: Toyota and Uber are discussing ways of reapplying kaizen to improve the safety and efficiency of autonomous vehicles. Uber need to take this opportunity as well - the talks come in the wake of a deadly collision involving a self-driving Uber vehicle in March, which represents a weakness in their development plans.

“There will be increased frequency for maintenance needs for car-sharing services and autonomous vehicles,” Shigeki Tomoyama, the head of Toyota’s connected vehicle strategy, said in an interview. He recently visited Uber’s self-driving technology centre in Pittsburgh, and said “We feel there is a potential to make use of our strength in Toyota Production System to ensure maintenance is completed as quickly as possible.”

Toyota can use their skills in cutting costs and controlling quality in an era when fleets of self-driving vehicles will need to be operated as a service for consumers. Under company president Akio Toyoda, the company is reshaping its business model to become a provider of mobility services to consumers instead of simply manufacturing and delivering vehicles.

“The more advances are made in electrification and autonomy, the more Toyota’s strength will be demonstrated. In the [new] just-in-time era — everything will need to be connected through a lean operation,” he said at a news conference last month.

Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

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