Operations and Principles in a Changing World - Assignment Example

Operations in a Changing World Table of Contents Table of Contents 2 Part I 3 What is the current strategy of the organization and how is this reflected in its operations practices? 3 Part II 6 How the strategy and operations management practices identified in part 1 are likely to change over the next few years, also be sure to reflect on the recent turbulence in financial markets and the rise of China and India as economic superpowers. 6 References 9 Bibliography 11 Part I What is the current strategy of the organization and how is this reflected in its operations practices? Operations management can be defined as the process of planning, coordinating, organising, and controlling of conversion of inputs like raw materials, labour, processed components, time, facilities, equipments, knowledge, and skills into outputs like products, services, experiences and information. Toyota is world’s leading car automobile manufacturer in terms of sales and production. Toyota is a follower of strategies like Just – in - Time production and lean manufacturing in the operations management (Becker, 1998). The company was the developer of these strategies. Toyota follows a strategy of continuous improvement and respects people. Toyota also follow a method of assembly line which is an array of sophisticated techniques of information system which supports and enables their business procedures that in turn helps them in eliminating waste from production, reduction in stock up of inventory and helps in continuously improving the production system. Toyota prides itself in its values like challenges, kaizen or continuous improvement, respect, teamwork, and Genchi Genbutsu (go and see). These are all guiding values for Toyota. ‘The Toyota Way’ method comprises of 14 principles and has four components with in it e.g. it describes a process of problem solving, long term thinking as a part of decisions by the management, adding values to the growth of the organisation by the development of its people, the way also identifies that continuous solving of the problem in the core area compels learning in the organization. Toyota as an organisation tries to operate on a strategy of green manufacturing and greener operations (Toyota, 2010). In the greener operations endeavour, Toyota has instituted plans relating to environmental policy like reducing energy usage, water consumptions, reduction in waste, cutting on greenhouse gas emission, and identifying materials from the resources that are renewable in nature. Recycling is also a strategy that is followed in Toyota. The main purpose of this endeavour is eliminating waste from production to a level of zero. This will help in preventing the land from getting industrial waste and also save the earth from pollution. These initiatives in business have contributed to Toyota’s success and have placed them in as the leading maker in automobile sector. The green manufacturing initiative by Toyota is also a relevant and path breaking effort on the part of the organization. In this process, the operations and practices of Toyota are constructed by following this method. In the green manufacturing process, the environmental commitment plays a vital role in the executions of the operations in Toyota. The full life cycle of Toyota’s product are manufactured under the greener manufacturing process. The processes involved in manufacturing like design, production are all part of this initiative. The entire operations are constructed keeping in view the ultimate motivation of disposal waste from production in a safer way to prevent the environmental damage. The reduction of waste in their manufacturing processes is conducted by following 5Rs policy like refine, reduce, recycle, reuse, and recover energy. By using these initiatives, Toyota has been able to do their operations in an energy efficient manner. Toyota was the discoverer of the strategies like Just in Time (JIT) and Lean manufacturing in their operations management. The JIT process is based upon the strategy of improvement in the business at a certain amount so that the inventory carrying cost can be reduced. The JIT process depends upon Kanban, a process which is used in JIT to signal a need for an item. The process of Kanban helped Toyota to achieve a great improvement in their processes of productions and also operations. The JIT process is based on inventory reduction which helps in saving the available space in warehouses. JIT process comprises of a key component called lean manufacturing. JIT process provides a tremendous benefit in reducing the setup time, coordination between supplier and the company, multi-tasking employee benefit, improvement in flow of goods. Lean manufacturing is a critical component of operations in the JIT process (Johnston, 2001). The process puts maximum emphasis on creating value for the consumers of the product produced by Toyota with a minimum amount of waste in the process. Toyota production system used this process at first with great result from it. The autonomation procedure, by using the principle of Jidoka, also was a part of Toyota Production System as well as lean manufacturing. The automation by Jidoka helps in preventing defective products as well as eliminating the chance of producing additional amount. Therefore, it helps in quality control and also using the JIT and lean manufacturing mechanism. Part II How the strategy and operations management practices identified in part 1 are likely to change over the next few years, also be sure to reflect on the recent turbulence in financial markets and the rise of China and India as economic superpowers. The operations management practices like JIT, Lean Manufacturing, Jidoka, Kanban that are used in Toyota are going to play a major part in future organizations. Also, the operational initiatives by Toyota like greener operations and greener manufacturing are huge motivator for companies worldwide. Similar processes are being thought of by many companies at the present scenario. The reduction of industrial waste and saving valuable resources from evaporating from the surface of earth are big concerns for the society at large as well as the global industry and the business sector. Therefore, Toyota’s innovative ideas like JIT could play a major role in every organizational setup and their manufacturing process. The JIT process helps in reduction of inventory in the warehouses of the companies. The saving of raw materials could make the world greener for our future generations. The lean manufacturing process is also extremely important part of JIT. The JIT process in future could help in bringing more collaborative relationship among the suppliers and the organizations as the quick delivery of products, mainly raw materials, are essential for successful implementation of JIT. The entire supply chain management of an organisation could be benefitted from using the JIT process (ICMR, n.d.). The turbulence in financial market also was a big factor in global business environment. Toyota felt the downside of the financial crisis by loosing around US $ 4 billion due to this crisis. They were severely affected by this situation. The JIT process could play a role a saving a certain amount of money from a business organisation. Therefore, it can help in the times of financial crisis. The JIT will help in boosting the organisational growth on a much faster rate in future as the use of it will increase in many of the organisations. Organisations in future are going to be benefitted by the quick response system used in Toyota. The faster response time, better product quality are the main benefits that are going to help any organisation in future as the operation management techniques are going to change along with the need of the organisation. The JIT approach is mostly used in the automobile industry.  Many other industries of various products and sizes are presently applying the idea of JIT and lean manufacturing along with green initiatives in their manufacturing.  JIT implementation could also change the industrial hierarchical structure as used in Toyota (Frazter, 2004).  They have been hugely benefitted by it as the organisation will be using their manpower resources as a part of industrial development as seen in the Toyota Way. Operations management strategies could play a vital role in the countries like India and China as they are developing as an industrial and global super power. In spite of widely different political systems, China and India are insistently continuing economic liberalization for the purpose of growth. So far, the strategic pathways for economic improvements are extremely different. China’s strategy is deliberate and methodical, but India’s is more of opportunistic and chaotic (Konana, n.d.). JIT and lean management provides different types of benefits to the organisation like decreasing in the set up times, improvement of goods flow, enhancement of employees’ morality, more productive workforce better supplier relationship as well as consistent scheduling. In both the emerging economic superpowers, India and China, JIT system is not limited to the business organizations only. But they also use the process in other sectors like that of hospital, education system among others that helps the countries to attain global leadership. Therefore it can be said that the JIT approach will help these two emerging superpowers to become even stronger with the use of these strategies. References Becker, R. M., 1998. Lean Manufacturing and the Toyota Production System. SAE International. [Online] Available at: http://www.sae.org/topics/leanjun01.htm [Accessed June 9, 2010]. Frazter, S. C., 2004. JIT Manufacturing “Just-in-Time”, Ball State University. [Online] Available at: http://www.bsu.edu/web/scfrazier2/jit/mainpage.htm [Accessed June 9, 2010]. ICMR, No Date. Toyotas JIT Revolution. Future of JIT. [Online] Available at: http://www.icmrindia.org/casestudies/catalogue/Operations/Toyota%20JIT%20Revolution-Operations%20Case%20Studies-Excerpts.htm [Accessed June 9, 2010]. Johnston, S. J., THE ESSENCE OF JUST-IN-TIME: PRACTICE-IN-USE AT TOYOTA PRODUCTION SYSTEM MANAGED ORGANIZATIONS - How Toyota Turns Workers Into Problem Solvers. Harvard Business School. [Online] Available at: http://hbswk.hbs.edu/archive/2646.html [Accessed June 9, 2010]. Konana, P., No Date. Comparing India and China Growth Strategies. McCombs School of Business. [Online] Available at: http://www.mccombs.utexas.edu/faculty/prabhudev.konana/indiachina.pdf [Accessed June 9, 2010]. Toyota, 2010. Greener Manufacturing. Operations. [Online] Available at: http://www.toyota.com/about/environment/operations/green_manufacturing.html [Accessed June 9, 2010]. Bibliography Bright Hub, 2010. Toyota and JIT Manufacturing. Project Management. [Online] Available at: http://www.brighthub.com/office/project-management/articles/72086.aspx?p=2 [Accessed June 09, 2010]. Duvall, M., 2006. What Is Driving Toyota. Baseline. [Online] Available at: http://www.baselinemag.com/c/a/Infrastructure/What-Is-Driving-Toyota/ [Accessed June 03, 2010]. Kaizen Institute, 2010. The KAIZEN Management System. Consulting Services. [Online] Available at: http://www.kaizen.com/competencies/consulting.html [Accessed June 09, 2010]. Liker. J. K. The Toyota Way: 14 Management Principles from the Worlds Greatest Manufacturer. McGraw-Hill Professional, 2004. Ōno, T. Toyota production system: beyond large-scale production. Productivity Press, 1988. Shim, J. K. & Shiegel, J. G. Operations Management. Barrons Educational Series, 1999. Read More