Toyota is a world renowned name, a brand dominating in the automotive industry, and multinational corporations based in Japan. The company was founded by Kiichiro Toyota at the end of the day in 1937 as a spin-off of his father’s company Toyota Industries to create automobiles. After some ups and downs Toyota started spreading its business around the world; especially when went to produce small size cars at early 70s. It became popular in USA as well as in Europe established its supremacy in automotive business as it offered car in reasonable price. In 1982, Toyota Motor Co. and Toyota Motor Sales in a single company are merged into Toyota Motor Corporation. According to the annual report 2010, with a severe business climate, vehicles are sold around 7,237,000 units, improving revenue by 1,690 billion yen. In 21st century, except producing vehicles Toyota runs a number of non-automotive operations such financial services for purchasing and leasing vehicles, property development, web based vehicle information networks, marine and aerospace businesses. It is listed on all Japanese stock exchanges as well as New York and London stock exchange.
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Define the concept of operations management and explain the role and importance of operations management in your chosen organization. Critically examine how operations management enables your chosen organization in achieving its strategic goals and objectives.
‘Operations’ is one of the most significant parts of the organizations that involve all activities required to produce and deliver goods and services to the customers and clients. It is obvious to say that all organizations have to undertake operations functions because they produce goods and services. Sometimes, however, we get puzzled in identifying operations, as few do not make differentiate between ‘operations’ and ‘operational’. “There is clearly a distinction, now well accepted, between ‘operations’ and ‘operational’. The former is concerned with the management resources for the creation of products and services. The later implies short-term, detailed and localized decisions. Thus, operations management is not necessarily operational management.” (N. Slack, 1999). To maintain operations activities, every organization procure resources, convert them into outputs and distribute them to their intended users. We, though, do not find difference in what way operations related people defined operations management.
>>> OM is the way organizations produce goods and services. Everything you wear, eat, sit on, use, read, knock about on the sports field comes to you courtesy of the operations managers who organized its products. Every book you borrow from the library, every treatment you receive at the hospital, every service you expect in the shops and every lecture you attend at university – all have been produced. (N. Slack et al, 2002).
>>> Richard (2000) described the operations management in such way, the field of management that specialized in the physical production of goods or services and uses quantitative techniques for solving manufacturing problems.
>>> Dr. Stephen (2003) said, operations management refers to the design, operation and control of the transformation process that converts resources into finished goods or services.
>>> Operations management is about the management of the processes that produce or deliver goods and services. (A Greasley, 2008).
>>> Operations management is defined as the planning, scheduling, use and control of the activities that transform inputs into finished goods and services (J. Bicheno and B. Elliott, 1997).
Figur1: Process of Operations Management
Management process is the main body dealing with the production. Productions and services are important to the efficiency of business processes, monitor resources used to meet customer demand and expectations. Managing the use of government resources in the company’s profits through efficient use and management of resources and goods produced little management to customer satisfaction. In simple term, the process is managed to transform inputs into outputs.
As the innovative and leading automobile company, Toyota’s basic principle is to precede economic atmosphere and give the society a sustainable development and reliable products by ensuring quality and innovation. To support this mission it still focuses on the future of the automotive industry to determine how best to position the company. Toyota aims to achieve long-term, steady development in harmony with the environment, global economy, and the communities they serve, as well as the stakeholders and shareholders. Announcing recent global vision, it continues improving lives all over the world through the safest and most reasonable ways. Moreover, to show respect its commitment, Toyota aims to exceed people expectations and also to be awarded with a smile.
Figure 2: Toyota visionary management: The tree metaphor
Toyota’s management philosophy is ‘to contribute to sustainable development through manufacturing and provision of innovative and quality products and services that lead the time (Toyota Annual Report 2010). According to the President Akio Toyoda, “since its foundation, Toyota’s unchanging mission has been to contribute to society by making safe and reliable vehicles. This will continue to be our priority.” He also added, though the company experienced some crisis last couple of years, “I have defined fiscal year 2010 as the year when Toyota makes a fresh start.” So, if the manufacturing process and management could meet this objective. For instance, the first inventory system ‘Just in Time’ (JIT) for Toyota is to keep inventories as low as possible. For employees, the Toyota group, the common goal of sales to increase market share and encourage staff.
Toyota administration has prioritized to maximize long term shareholder value. Also being a corporate citizen responsible goal, too. Therefore, Toyota is trying to build “good relations with stakeholders, including shareholders, customers and business partners, local communities, and the team” (Toyota Annual Report 2010). Ethical awareness is also recalled because they believe that the key to effective governance. Without conscience never be used to provide, without regard to system success.
Operations Management at Toyota:
Operations Management process is essential for the organization and now works in the day. During the analysis of business operations and we must do two levels of data collection: the company itself and secondary analysis to support research on society and industry. Management processes and other issues to help us walk through the steps of secondary research, find the target company reviewed its internal processes and market place. Toyota uses various methods to raise the yen to remain competitive in the labor market. They are both looking at the building as being of major importance to improve the system of Jet. A recent study has renamed the system, such as lean manufacturing system. So-called inferred from this system is that it can be put into five groups of five
zeros. There are the five zeros, and paper, zero, zero inventory, zero defects and without delay and interference is zero. What are the five zeros, the fact that
Conservation plans and inventory to a minimum but also project a simple and clear, reliable and flexible, and save them in a series of both quality and speed of design and manufacture of real time, as the beginning of the final product. It is, essentially, trying to put in place to dispose of waste and the complexity of its operations. To get closer to achieving those objectives must be other components involved in the scheme under the door and it is the overall quality and commitment of the total population. It should be done using methods of quality planning, quality control and quality improvement. As we learned cannot work without the use of Jet MRP to work together to some extent. In addition, by reducing the number of Kanbans used in the amount of stock used between workstations automatically disabled. This enables Toyota to make a symbolic war on waste.
We understand the need to replace the Japanese and implementing Just in Time (JIT), Total Quality Management (TQM) and the principles relating to the review of all it takes for the ability to compete not only on the market, but really, now one of the most important companies in the automotive market. Toyota made in this country, using the techniques mentioned, and if applied correctly, they should keep in mind for a long time.
Critically examine the importance of effective quality management in achieving the goals and objectives of your chosen organization. Identify and discuss the success of the existing quality management processes in the organization in achieving the strategic objectives.
Quality Management in Toyota:
Because of consumer demand for high quality products and services by focusing on quality management of large organizations, it is shown that the quality is to be an integral part of maintaining long term relationships with customers, and a tool to attract new customers as an agent to reduce costs. It will focus on providing world class quality management standards, enabling the organization to be more focused on the customer and the market, and the presence of increased competition and accountability of employees.
Quality improvement approach
As soon as the implementation of TQM to succeed, it is necessary to ensure that performance continues to create a culture to include the internal and external customers. These clients have entered the final outcome of the product or service and so will the organization respond to customer needs or concerns. Toyota is using different approaches or methods to improve quality and standards, but over time, Taguchi methods, statistical process control and quality assurance. It is about time that quality has improved and now have another method, such as six are known Kaizen, Six Sigma and business process re-engineering, to name a few.
Toyota customers are most important to the company, and in order to complete customer satisfaction, it is always concern of ensuring that all customers receive the highest level of service and easy access to the report of any investigation. Toyota customer relations department, in all corners of the world are responsible for providing assistance to clients on issues, concerns, experiences and maintain a positive relationship, communicating with customers, including telephone and e-mail, fax and e-mail or in person.
Toyota Production System (TPS)
It is established that TMC operates the production control system for many years to continually improve standard and to make a vehicle according to the customers in the fastest and most effective to provide a car as soon as possible.
Figure 4: Toyota Production System
Toyota Production System (TPS) is made of on two concepts:
*** Jidoka (control, contact the person), means that the device is safe to stop at the end of normal processing. It also means that the device detects a problem on its own initiative to stop and prevent defective products from being available. Therefore, it will only send products that meet quality standards for the following operations on the production line. Since the machine stops automatically at the end of treatment, or when a problem arises, and be expressed through the “Andon” (Council of the issues presented), operators can continue to work confidently in the exercise device other, and easily determine the cause and avoid their problems.
*** “Just in time”(JIT) which means that each process produces only what is needed next in a continuous stream. Production of high quality products is done efficiently through a full end waste, and inconsistencies and unreasonable demands on the production line.
Figure 5: Toyota Just in Time
Principles of Toyota Production System (TPS)
Reduce preparation Times: All practices and extravagance in the unit because they do not add value and work-related equipment.
Extension of objects produced in large series of results on the cost of preparing a huge capital cost of high speed machines with high grade and larger stocks, and the time and the biggest cost disadvantage: a small batch. .
Toyota workers organized their teams and gave them training and responsibility to do more specialized tasks: participation and empowerment of employees
Quality at the Source: To eliminate product defects, it must be discovered and corrected as soon as possible. Workers are in a better position to find fault and fix it immediately, so that responsibility is assigned.
TMC established a basic charge of maintenance, as it is able to detect failures: equipment maintenance.
Pull production: the costs and time to do inventory, Toyota has developed a production method of the withdrawal of the amount of work done each step of this process is dictated only by demand for materials immediately after phase.
Ability to join Toyota treats its suppliers and partners as part of the Toyota Production System (TPS). And suppliers are instructed to limit the number of times, and inventories, defects, car accidents, etc.
TASK – 3
(i) You are required to plan a strategic quality change aimed at improving organizational performance in the chosen organization. Your plan should be action oriented, detailed with SMART objectives. The resources, tools and systems required to support the business processes in the quality change process should be clearly identified and discussed.
(ii) Discuss the implications of planned strategic quality change in your chosen organization.
(iii) Recommend a suitable system for monitoring such a change.
Toyota has a clear edge quality, involved in a number of recalls in recent years. In 2009, Toyota announced its first annual net loss of around 500 billion yen in the six decades. Between 2004 and 2007, Toyota has recalled 9.3 million vehicles and the large number of total annual production. In 2010, recalled about 8 million cars including 180000 units in UK, Toyota’s two proudest names; Prius hybrid and high-end Lexus marque, which were accidentally stuck accelerator pedal into the carpet, which led to the sudden acceleration.(The Telegraph, 8 Feb,2010) In addition, some experts said that errors, not only with mats, car gas system but Toyota sticks caused the accelerator at high speed, causing accidents. Reference was made in 2010, 230000 vehicles in the U.S. for the same reason. Also the famous sticky accelerator pedal to recall the following reasons: ECU faulty steering column, air bag failure, engine sludge, accidents and other programs, body rust, etc. as a result, Toyota has suspended the delivery of thousands of new car as the crisis over defective accelerator pedals threatens the engulf the company. (The Times, Feb 4, 2010)
Figure 6: The Online Impact of Toyota’s recalls dating
Other manufacturers have similar problems with their cars, but none of them put on the market as a Toyota vehicle. Since 2006, Toyota hired 850 engineers and opened two of the quality of institutions in North America and Europe to strengthen the “Toyota way” of their employees in these areas. The “Toyota Way” set of guidelines and principles of conduct to ensure quality production process, conceived in 2001 at the Toyota site and production facilities abroad
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Way to change
Toyota is trying to do everything possible to solve this problem as getting back its long period reputations. Toyota spends a lot of money considering what that really proves that Toyota cares about its customers and has the hope of bouncing back shortly. The company must understand that the state alone to solve the problem of quality. To reflect the problem Toyota calls Hansei (it means to acknowledge your own mistake and to pledge improvement) which root is deep problem solving – the pinnacle of the Toyota way. (Harvard Business Review, Feb 12, 2010). The way to prevent potential future failure, it is given that car owners receive a fixed car, and wash their cars and fuel tanks filled to the top of ours, after its establishment. According to surveys, people still like Toyota. They say that if the defects in their cars, Toyota will take care of their own. Who knew that Toyota Motor Corporation was profitable last year, and which amount is in 2010, an attempt to save its customers who have made the company profitable for the previous 60 years. President said, “TMC is aiming for an auto industry first by reaching annual sales of 10 million vehicles by 2015 even as it acknowledges that overly rapid growth was at the root of its recall fiasco” (Los Angles Times, March 9, 2010). The company forecasts profit will be raised to 48% in this fiscal year.(Business week, May 11, 2010)
SMART oriented steps in Toyota:
During 1940s and 1950s many educational engineering publication started discussing the merits of specific and measurable goals or objectives through SMART acronym. But the credit of popularization it goes to Blanchard and Hersey who used the term SMART in their book ‘Management of Organizational Behavior in 1988. SMART is an acronym that helps to write objectives. The objectives can be for managing performances, developmental purposes and even sometimes in personal evaluation. In recent time, many organizations are using SMART to set goal and appraise their performances or management environment. SMART means
T= Tangible/ Time bound.
Along with other evaluation theories Toyota also uses SMART acronym to set its goals and objects. The company has already set its goal of rising vehicle sales to 10 million by the year 2015. However, to reach the objects the most popular vehicle brand takes the measures by collecting date, changing demand, people requirement to their favorite company, finding the problems and weakness out and also upgrading its production process. It always respect to its customers as well as employees who are the life blood of the company.
Toyota team, in order to prevent, images from sliding further focusing on quality. The company must monitor the reform process and quality design, engineering and manufacturing. Company has aggressive global expansion slowed by focusing on quality rather than quantity. It is clear that the famous Toyota production system concepts such as JIT, Kanban, Kaizen Jidoka and maintain foreign Pokayoke plant during the manufacturing process. There was a lack of high-skilled manufacturing jobs and those who do not care about quality problems in everything. Toyota is to improve its facilities to provide all members with highly qualified individuals who would wait until the system of trade preferences is strictly enforced.
Figure 7: Toyota problem-solving process
Toyota’s innovation process
The system of trade preferences is the basic philosophy of providing facilities for Toyota. An important part of the system of trade preferences is the only system time (JIT) inventory, which is required for each manufacturing facility to convince Toyota production lines. It was realistic and Jet technology was first used by Henry Ford back in the 1920s. However, it was adopted by Toyota in 1950 and refined at a high level of efficiency; it makes a world leader in the recruitment of JIT. It is the principle of the existence of documents in hand, just as undesirable, to eliminate the need for, and especially on inventory management costs. Besides A smaller capital held in inventory systems with Jet, and also greater flexibility for installation and improvement of model also features much more quickly, the lack of spare parts stock to be issued; problems may Some parts also have to find more effective because they are used to deliver once.
Toyota product innovation
Toyota proved its commitment to environmental protection by creating in 1992 Toyota Environment Committee, chaired by the President of TMC, Mr. Katsuaki Watanabe himself. The Committee shall meet at least twice a year, and discuss issues such as emissions, fuel consumption and noise reduction itself. With crude oil prices and increasing environmental awareness in all regions around the world, Toyota has moved their attention. Hybrid cars are cars that make effective use of all internal combustion engines and alternative sources of renewable energy such as electricity. The harmful emission from hybrid car is more than 10% of those produced by an average of petroleum or diesel car.
Results innovations Toyota
Since many changes implemented as part of Toyota’s innovative style has seen significant benefits to the institution in general. Based on materials of various magazines such as Fortune and Bloomberg market, we see that Toyota has gradually acquired most of the car market with their products get a reputation for being cheap and reliable at the same time. The market share of 9.3% (USA) in 2000, Toyota has increased exponentially in the past six years to capture 14.6% of the U.S. market today.
Implement the strategic quality change you have developed in your chosen organization. Using relevant examples, discuss how you will cultivate a quality in the organization. Implement and monitor the strategic quality change you have planned.
Measures taken by Toyota
After experiencing a bad situation, the world renowned automaker is attempting mount to come back strongly by commencing inevitable measures to make sure improvement in safety and security. Though its engineers worked hard and soul to fix the problems and find out the solutions examining every accident, complaint gave by customers, keeping continuous communication with journalists and other automotive companies. Toyota invited some experts from outside were also to give independent appraisal. Seeking counsel from outside could be a good step for the automaker due to constant criticism received during crisis moment and rising question of transparency its taking measures for solving the problems created in its productions.
The leading automotive vehicle company takes some measures to solve the problems facing in any situation. Initial step is that all works must be speechified so that it is to do staffs and to all about everyone responsibility. There is no occurring hamper in operating activities in the middle stage of works. Then the question of relationship of customer and suppliers that is direct; no medium plays among them due to communicate each other instantly. It is ensured in both inside and outside. The methods of productions and services are simple and clear so that the clients come to know easily whom to contact in experiencing technical as well as quality problems. The last one is to follow the method determined by the company to solve problems. It entails defining specifications, establishing hypothesis, constantly testing them and evaluating the outcomes. President of Toyota, Mr. Akio Toyoda said, describing of his directly involvement to clarify the standing point of the automaker company to people, “as for our series of quality problem, I, personally played a direct role in explaining to the US congress, to members of media around the world, and, to, most of all, our customers, what kind of company we are and what kind of values we held”
Using the scientific method as a foundation, Toyota developed the most significant communication system called A3 that gives those who engaged in solving the problems to easy access to the key point very quickly. The problem solving principle is too simple and not on the basis of new technology but on its respected customers who are always considered the heart of Toyota. It does not differ in recent recall breakdown; first measure taken by the automaker is to get opinions from the clients as well as the complaints of the productions and services. The experts critically take into account questions uttered from people and also continue communication to the journalists hold the spokesmen of society. On the basis of review and opinions, company is taking the immediate measures to change its technologies used in producing vehicles, admitting it fault and definitely with the promise of giving compensation for victims. There was no hesitation to return back its productions got technical problems, though the automaker had a bitter experience a hug loss amounting about 300 billion yen. With a dreadful production recall, Toyota was able to earn profit increasing to 323 billion yen in last year which a large part came from US selling market. And Europe was not out of it.
To minimize the thickness problem in accelerator pedal complained by the customers, Toyota EU division increased the online tools to communicate continuously with its customers and buyers. An online vehicle identification checker number was developed so that they were instantly got access to test if their cars were affected. Toyota EU was everyday received about 40000 news through ‘toyota-europe.com’ opened specially for its customers and stakeholders.
Figure 8: Toyota recall situation on EU
External division of the company continued spending a great deal of time by directly engaging with its clients and stakeholders, especially with media to receive their opinions and advices, and also share views with each other to find out the solution immediately.
To be the number one Toyota always needs in the automotive industries to looking for new markets. The company should be able to identify the markets and what it can get hegemony over them. Automotive market is very interesting. World time, you can see how cars like Toyota, expanding their activities in emerging markets. Toyota is expanding in major markets in the economies of China and India. The two largest economies and more and more car manufacturers strive to capture a significant share of these markets. Other vehicle selling markets now continue growing hybrid market. With high oil prices and environmental concerns growing, the key to Toyota’s hybrid market to become number one automobile.
Critically evaluate the outcomes of the strategic quality change implemented in the organization and provide relevant recommendations for future improvements to achieve the overall goals and objectives.
Proposals for changing the quality of Toyota’s strategy
In future, the oil shortage and the demand will be searched for the company for innovation intensive. Like electric cars. It can be an accelerator problem. Toyota would have to accept new innovations like solar cars on compressed natural gas car to overcome the threat of future oil. It is cheaper and less polluting, and available everywhere. The other type of security system and auto theft a big problem and can capture more market. Bio-diesel plant, which can be extracted from the leaves of fuelï€® Full control computerized machine
Improvement in packaging design
Packaging offers big environment impact throughout its lifecycle. Toyota uses every year 110 million parts of both reusable and disposable packaging over through its part of logistic operations that has a bad impact on environment as well as company’s economical position. TMC engineers have the duty to play significant role in both environment and economy. But due to lack of accurate knowledge about the matter, they cannot carry out their responsibilities properly. That is why it is an inevitable for the company to arrange training and employ more skilled people to meet its words for protecting environment.
Toyota always feels proud uttering customers and clients are the life blood of the company, and also admit for them it is now where Toyota is. They Continue supporting the company and never give up, especially in series of products and services crisis the main moral back up found from them. Though TMC continuously shows respect to them by trying to provide quality and standard services. It also offers some financial facilities such alliance with the insurance company providing insurance services to its customers (such as the NRMA)
Computerized inspection vehicle joint venture with computer strategic research and development cooperation with key actors. There is more concern in Asia and the Russian market the most dynamic markets Motorcycles and power products in North America. The Institute should be open for training until the minimum production level for the development of new technologies Car of the men and women in terms of shapes and forms expanding market for sports car to attract younger generation. Enhance virtual manufacturing, and CAD and CAM technology to reduce production costs to manufacture new products.
Over time, and monitor long-term commitments for the payment of cash or net profit before making any investment or savings to reduce debt. Toyota will be the dominant leader in the automotive industry in 2010. Companies are buying smaller, such as Toyota, Hyundai to be stronger in 2010 and with a series of problems for the last few years; the leading automaker has not kept back from its financial target. Its market share constantly increases all over the world, though little down trend has been shown in America and EU recently. Toyota fixed its new goal to regain approximately fifty percent of automotive market share by 2015.
While Toyota remains one of the world’s largest automakers, like other organizations, it continues to critical business challenges. This could lead to development of the Toyota production system and the Earth Charter, which will help to address the strategic problems and Toyota foundation for rebuilding. Application of the Toyota production system requires an incredible amount of detailed planning and control. With the development of this system, consumers can identify the identity of reliability that Toyota has to offer in their products. By applying the Toyota Production System in action, it is suggested that Toyota should create relationships with customers to meet customer needs promoting Toyota products. This will reduce the demand and sales offered by other competitors. Development of the Toyota Earth Charter is to assist in environmental impact reduction. Using this model, there are two advantages to society may arise, increase sales and reduce environmental pollution. Result was above expectations in May Toyota, but as profitable as now, Toyota has to maintain focus on a hybrid market sector to meet their expectations for the future
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