Analysis of the Business Operations of Toyota - Essay Example

Analysis of the business operations of Toyota ID Number Analysis of the business operations of Toyota Executive summary Toyota company has one of the uniquest systems that focus more on on time management and the progressive improvement structure. Essentially, the manufacturing system at Toyota is grounded in the achievement of high productivity levels and also empowers their employees more by them to be part of the team that makes decisions within the company’s production system. This system has been able to yield employee participation and satisfaction, making them to work as part of a team that focuses on achieving the organizational goals for the company. Toyota has also been able to achieve competitive advantage within the highly competitive automobile industry across the globe by applying supply chain and inventory management concepts. The Toyota Prius is one of the products by Toyota that has helped the company to gain a competitive advantage because of its focus on providing greener energy solutions that the vehicle market desires. Additionally, Toyota also applies the lean philosophy of manufacturing that advocates for the minimization of any wastages and also focuses more on achieving cost reduction measures in order for the company to continue running efficiently. The Toyota Prius has been able to reduce costs because vehicle consumers have shifted from the conventional fuel powered vehicles that are usually affected by fuel costs. The company also solves its problems adequately by continuously training its staff on how to handle certain production challenges and also anticipate for such problems in future. With this, this essay will review and critically analyze the operations of the Toyota company with a keen focus on the Toyota Prius vehicle, which will also include figures that would illustrate the production process of the same. 2. Business operations The Production system of Toyota The production system applied by Toyota is highly standardized and it also effective because it eliminates wastages through the lean production and movement, which is one key principle in operations management (Eyob & Tetteh 2012, p. 225). Also known as the TPS (Toyota Production System), this philosophy tends to be customer oriented that have led to the adoption of the same strategy by other companies across the globe. This strategy is a flexible one and has helped in the running of daily activities at Toyota because of the outcomes that it seeks to achieve. According to Jayaram, Das & Nicolae (2010, p. 280), one of the desired outcomes that this process tends to have is that the company seeks to provide high quality vehicles to their consumers with the cost attached to them being as low as possible and within the shortest time. Secondly, the TPS also provides flexibility for the company to achieve profits, respond to the needs of the market by way of reducing costs and facilitating prosperity that is long term respectively. Lastly, the TPS applied by this company influences employee satisfaction, fair treatment of employees and also makes the employees to be job secure. Toyota considers the process of improvement of the quality of the vehicles they produce to be continuous by ensuring that their efficiency levels are high and that there is minimal wastage of resources (Alukal & Manos 2006, p. 21). One such product that has achieved this sort of efficiency is the Toyota Prius, which is an electric hybrid car that is fully green when it comes to the rate of carbon emissions. The first Prius was sold into the car market in 1997 in Japna and was launched into the world market in the year 2000. This process is what the company refers to as kaizen, which applies across all Toyota functions and activities across the globe. Kaizen is also the core of TPS as this ensures that both the mechanical and human aspects of the company apply the standards set so as to ensure that the production is of high quality, has minimal wastage while improving on their efficiency levels. As part of reducing wastage, Toyota Prius achieves improved efficiency by reducing fuel costs as Toyota company produces items that require the least manpower within the production process. The implication of this is that Toyota ensures that there is efficiency, beginning from the individual employee level to that of a whole plant in terms of plant operators. Moreover, Toyota employees have the responsibility of following the work guidelines and the standards set as part of their improvement process because it is obvious that those that fail to execute their duties as required are easily identifiable because of their workstations. Kaizen not only requires that Toyota employees adhere to the manufacturing process of the company and serving customers diligently, but it also stretches out to include serving the communities that Toyota impacts through one way or another. Accessed on 3 March from http://www.pharmamanufacturing.com/articles/2011/069/ On the contrary, the manufacture of Toyota Prius is based on the demands of the consumers markets, which in turn influences Toyota’s production levels, meaning that the company abides by the natural principle of demand and supply. Toyota coined the ‘Just In Time’ concept in production in which only what the market needs at the time of production is what the company will deliver meaning that the market needs dictate the production process (Amasaka 2007, p. 285). Toyota Prius is an illustration of a product that was developed as per the needs of the market that the company targets, that focus on green energy solutions. In essence, this Toyota model is the most preferred vehicle because of its application of the hybrid synergy drive which has an efficient power system. Interestingly, Toyota creates the linkage between the demands of their market and their production levels using the takt time analysis, which is a device that measures the sales rate against a manufacturing plants capacity (Sobh 2008, p. 100). More resources can only be allocated if the takt times is reduced, however, Toyota does not increase the workload on its employees when the demands of their market increase as this is highly likely to reduce their work efficiency. This means that Toyota only increases the number of employees within a production line in which each of them focuses on a workload that is manageable and tailored to their skills. Kanban is the other mechanism applied by Toyota in its production process where there is the regulation of production within the Just in Time concept. This gives a visual signal to employees through cards about the manufacturing work that needs to be accomplished and the time that this should be done, which is a concept applied in Toyota Prius production process (Alukal & Manos 2006, p. 165). The advantage that this system presents is that helps in maximizing value for customers and reducing waste because it avoids the repetition of already completed processes within production. Additionally, the Kanban system with Toyota Prius’ manufacturing process reduces paperwork and miscommunication among employees hence influencing efficiency, which is part of the company’s overall goal. Toyota’s engineers adopted this concept from supermarkets in which they only restock products as their inventories and not as per the supply of their vendors and has proved effective. Jidoka is the other concept applied at Toyota, which gives power to employees to stop the production process in the event that they notice an abnormality within the same (Alukal & Manos 2006, p. 164). Essentially, Toyoda Sakichi invented was the pioneer of this idea as he created a an automatic loom that was capable of stopping without human intervention if threads snapped. Therefore, for Toyota Jidoka is simply automation by applying the human touch. Toyota borrowed this approach from Henry Ford, which makes employees to be in more control over their work stations in the event that there is a hitch in the production process rather than waiting for management to make the decision as indicated on Toyota’s Website. In essence, this concept is needful as it helps in reducing wastage especially if the production line develops some faults that can lead to the manufacture of products that cannot be sold by the company or do not meet the quality standards. This explains why Toyota focuses on training its employees about the production process as they can be able to work as part of a team. Employees are able to make improvements to their work stations, but this occurs under the keen eye of the management as it is the overall approving body and charged with oversight roles. Retreived from http://leanmanufacturingtools.org/ 3. Two challenges facing the operations of Toyota One of the key challenges faced by Toyota and any other automobile manufacturers is the demand for vehicles that are fuel efficient, where pressure mostly comes from political and customer groups. With the awareness of carbon emissions being higher, this becomes a challenge for Toyota to keep up with this demand, which is likely to affect their already captured markets and conquering new ones. The other challenge that Toyota faces is the fact that many of the automobile consumers, especially in Europe, have opted to carpool or car share as a way of reducing household costs. Others use alternative modes of transport such as the subway in order for them to cut on the transportation cost with the ever fluctuating fuel prices. This has led to a decrease in demand for cars manufactured by Toyota lately and also for other automobile companies. 4. Proposed improvements to address the challenges identified Flexibility is a key component when it comes to meeting the demands of the market, but Toyota should make sure that it only implements technologies that have been thoroughly tested and proven so as to avoid disappointing their consumers in the process. This means that Toyota should not take the high demands attached to their products to flood the market with prototypes that have not been proven to be functional and making sure that they also apply up to date technology in the development of their products. Bibliography Alukal, G & Manos, A 2006, Lean kaizen: a simplified approach to process improvements, Milwaukee,Wis, ASQ Quality Press. Amasaka, K 2007, ‘Applying New JIT-Toyota’s global production strategy: Epoch-making innovation of the work environment’, Robotics and Computer-Integrated Manufacturing-ScienceDirect, no. 23, pp. 285-293. Eyob, E & Tetteh, E 2012, Customer-oriented global supply chains: concepts for effective management, Hershey, PA, Information Science Reference. Jayaram, J, Das, A & Nicolae, M 2010, ‘Looking beyond the obvious: Unravelling the Toyota production system, International Journal of Production Economics,vol. 128, no. 1, pp. 280-291. Sobh, T 2008, Novel algorithms and techniques in telecommunications, automation and electronics, [Dordrecht], Springer. Toyota Website, Toyota Production system. Available: http://www.toyota.com.au/toyota/company/operations/toyota-production-system [3 march 2015] Read More