Operations Management in Toyota Motor Manufacturing UK Assembling Unit, Derbyshire, East Midlands - Report Example

OPERATIONS MANAGEMENT IN THE TOYATA MOTOR MANUFACTURING UK (TMMU) ASSEMBLING UNIT, DERBYSHIRE, EAST MIDLANDS Introduction Operations management is a central aspect of corporate strategy. It involves the institution of the best processes and procedures to ensure that a company is able to provide the best results from the processing of inputs from the external environment into outputs that is to be sold to the market. The aim of this paper is to undertake a critical analysis of the production system of Toyota with an emphasis on the Derbyshire Assembling Unit. In order to attain this end, the following objectives will be explored: 1. An analysis of the inventory system of Toyota assembling unit; 2. A review of the supply chain management process by documenting the supply chain system that links up to the assembling unit; 3. An evaluation of the delivery system and its alignment to the performance objectives and corporate strategy of Toyota assembling unit; 4. An analysis of lean production systems and innovative methods and systems utilised by Toyota in attaining competitive advantage through assembling. The fundamental methodology of dealing with this process will involve an individual observation and analysis of the operations management systems and structures of TMMU. Aside this analysis, the paper will focus on interpreting the fundamental elements of the Toyota Production System and its implications to corporate strategy. The observations made by visiting the site of manufacturing will be complemented by a critical review of authoritative sources like other books and secondary sources that have sought to interpret the Toyota Production System. Operations Management and the Assembling Unit of TMMU The assembling unit of TMMU is central and vital to the production of high quality cars for TMMU. The operations management processes seek to use the best and most optimal methods and processes for the attainment of results. “Operations management is the activity of managing the resources which produce and deliver products and services. The operations function is the part of the organisation that is responsible for this activity. Every organisation has an operations function because every organisation produces some type of product and/or services” (Slack et al., 2010: p4). Bamford and Forrester (2010) identify that a firm takes inputs from the external environment, processes it internally into output which is made available to consumers outside the firm. This can be reconciled with Slack et als statement that operations management is about how to deliver products and services at the best quality for the optimal results. This involves the identification of the best and most appropriate methods of maximising output from a given level of input. Thus, Toyotas assembling unit forms a critical part of the operations management system and process of the company. It utilizes various techniques of putting together parts of cars to produce the cars that are sold by the company. The operations management function of a firm is interlinked to different sections and segments of the organisation. This is because production and operations form the core of the operations of businesses. And hence, there is the need for businesses to have various processes and procedures for the operation of the firm. Figure 1: Operations Management of TMMUs Assembling (Source: Slack et al, 2010, p6) The Toyota assembling unit is central to firms operations and affairs and it involves connection with the marketing function and what markets demand and expect. Product development is based on operations because once there is the development of a product, the assembling function changes appropriately. Accounting and HR are both connected with Toyotas assembling unit. Accounting and finance focuses on profitability and utilisation of assets. And with that, Toyota will have to measure profitability in relation to production costs and revenue from production. The Human Resource management function focuses on training workers to improve outputs in production. Information systems is about taking information about the movement of materials in and out of the operations unit. Operations management is therefore a central function that seeks to attain the optimal results from the different aspects of running the operations function (Greasely, 2013). It involves the gathering of inventory and the processing of inventory for the best results in order to attain competitive advantage and retain customer satisfaction (Johnston et al, 2012). A firm like Toyota is known around the world for the assembling and sale of high quality cars for consumers around the world. The Japanese car manufacturer uses the most sophisticated techniques to analyse the external environment and gather parts, some of which are produced in-house and others produced externally. Toyota Motor Manufacturing UK (TMMU) is a branch of this global car manufacturing leader. And Toyota Motor Manufacturing UK (TMMU) uses its processes and procedures to manage operations and produce according to the global standards but with consideration for the local conditions in the UK. Operations Philosophy of TMMU The fundamental operations philosophy of Toyota seeks to promote the highest quality at the lowest cost and within the shortest lead time possible. This is to be achieved through two main concepts and targets: 1. Elimination of waste and 2. Continuous improvement The model of TMMUs assembling unit is integrated into the core strategy. And this involves the use of various methods to eliminate overproduction, waiting time, processing, waste of inventory, waste of stocks and the creation of defective products (Bellgran and Safsten, 2009). The elimination of waste is a strategic idea and this is meant to cut down on the cost of production and maximise outputs and profitability. The idea of eliminating waste is connected to the Kaizen method which seeks to attain continuous improvement. In other words, in every situation where there is some kind of waste, there is the need for the firm to learn its lessons and improve its operations and affairs continuously. Kaizen means changing for the better. And this is done by breaking down work, questioning every single detail and developing new and improved methods to attain the best and most notable results (Kato and Smalley, 2012). Through this, there is the application of new methods and new knowledge in order to improve results and enhance operations and affairs. TMMU Inventory System & Supply Chain Management System to Assembling TMMU utilises the Just-In-Time system of sourcing for raw materials and inventory (Bellgran and Safsten, 2009). The Toyota tradition involves a philosophy that seeks to eliminate waste of over-production and waste of time and waste of stock held amongst other things (Bellgran and Safsten, 2009). This implies that TMMU has a plan to prevent the store up of working capital in inventory. This leads to the waste of time and money which are not properly invested and this leads to slack. The Just-In-Time method involves ordering products and services just as and when Toyota needs it. Thus, when a department or unit needs any form of raw materials or products, they order it from reliable suppliers. These suppliers are entities in the industry and have been in the industry for years. Hence, there is a long-term trust and relationship that exists between TMMU and the suppliers. Thus, where there is the need for inventory, these suppliers are called upon and without wasting any time, they deliver goods and services immediately and this is used to deal with the production process. The essence of the just-in-time method is that it prevents delays (Ono, 2010). This is because every situation and every cycle in production is given an exact period and time within which the unit must produce it. Hence, when applied appropriately, there are no delays or limitations and production continues unabated. Once the production of one stage is done, the production system of TMMU is designed in such a way and manner that the WIP moves directly to the next stage in a JIT system. This ensures that there is no need for the keeping of inventory. Rather, there is a continuous usage of inventory as and when they are needed. Thus, the inventory system of TMMU is steeped in a connection with reliable suppliers. These reliable suppliers are connected electronically to TMMU and they get to know and see the stock levels of TMMU in real-time and can they deliver the moment there is the need to restock the TMMU plant (Clarke, 2006). The inventory system of TMMU is one that makes use of information technology and information systems. This information technology system and structure connects the internal operations system of TMMU to suppliers. This enables them to transmit instant information to the suppliers. The suppliers also have knowledge of the reorder levels and the reorder time. They therefore provide a quick response to TMMU as and when the reorder level is met and there is the need for restocking. Verkerk (2010) identifies that the inventory model of TMMU is one that is based on continuous flow. This is because the flow line is one that is based on the flow of inventory from one stage of the production to another. Thus, where there is a limitation on the upline or the production system, there is bound to be issues with the next stages and the next processes of the production line and this leads to idle time and slow flow of production. Figure 2: The Toyota Production System and the Assembling Plant The figure above shows that the Just-In-Time process, known as Heijunka is focused on what is needed and what is required in terms of amounts. It is provided exactly where it is needed and when it is needed. This prevents holding costs and the lock up of capital or slack. Delivery System and Strategic Linkage of Operations Management in TMMU The delivery system of TMMU is based on the philosophy of the complete elimination of waste through the use of a just-in-time manufacturing system (Verkerk, 2010). This is steeped in the fact that the company seeks to use a lean manufacturing system known as the Jikoda which involves the automation of activities with a human touch (Verkerk, 2010). Jikoda means the firm will have to use computers and other machines. However, in the process, there must be the input of human beings and other members of the team who will continuously monitor the production process and ensure continuous improvement. This use of human input in the Jikoda system is important because TMMU utilises a continuous flow production system. Thus, the firm will need to ensure that every part and every unit of the Toyota operations management process is accurately operating. Where there are issues, it must be identified and dealt with. This will improve the production system and process and enhance the operations and ensure continuous work flow and the elimination of idle time and other forms of waste. The Genchi Genbutsu system is a Japanese word that means “go and see for yourself” (Hindle, 2008). This is important because the fact that the just-in-time method of doing things ensures that there is the need for close monitoring and controls. In cases where there is the need for reviews or modifications, the genchi genbutsu method can be employed to ensure that there is real-time and real-life monitoring and control to report issues and make it known to the top management for some degree of improvement and the betterment of the process. The Genchi Genbutsu method is known as management by walking around and this is a system whereby management will not only control affairs by sitting at the office. Rather, they have to take a proactive hands-on approach by going to the place and documenting and dealing with issues that relates to production. This ensures the implementation of timely solutions that leads to the improvement of the system and the prevention of breakdowns and shut-downs. Through Genchi Genbutsu, TMMU is able to connect strategic targets to the operations unit. This is because the manager gives the operations close monitoring and link it to the actual strategy. Where there are issues, they can be dealt with and through this, targets set by the strategic level management are integrated into operations and the operations manager is made responsible for the attainment of these targets through real-life operations. Innovative Methods – The Toyota Way There are there main approaches that TMMU utilises to ensure that their operations management system at the assembling unit adapts to changes and issues that exists in the external environment. They include several pointers and matters. Challenge As a strategic policy, TMMU accepts that there is competition from other UK car manufacturers. This means that they will have to adapt methods and approaches that they can use to resolve issues and matters in operations and the completion of activities in their assembling plant. This include the use of an emergent strategy where complaints and challenges are identified and integrated into the production system for continuous improvement (Marksberry, 2012). Kaizen “Kaizen continuous activities include cost reduction activities that require changes in the way the company manufactures existing products” (Monden, 2012: p257). Kaizen involves the breakdown of work and the questioning of details where there are issues and matters (Kato and Smalley, 2012). Where there are issues there is the development of a new and improved method and this is applied to attain better results in the operation of the entity. Kaizen is involved and connected to the standardisation of work and the breakdown of work into different components and units (Verkerk, 2010). This include the creation of a standardised process which forms part of the workflow. The implementation of the standard process is such that the best and most innovative methods and processes survive. Where there is the need for the modification of the production process and system, the management of the firm come up with a method and process of improving it and this becomes the new standard of production and doing things. The standardisation of work is based on the theme of utilising minimum inputs with the view of attaining maximum output. This involves the consolidation of improved and better methods of dealing with issues at all time. In other words, the successful and better ways of dealing with issues are instituted and this becomes the normal way of doing things and dealing with issues and matters. The standardisation process also revolves around the need to produce high quality products and services and this is done against the backdrop of maintaining the minimal lead time. This implies that there must be the utilisation of better issues and matters in a way and manner that will ensure continuous improvement and consistent betterment of the process. Small Lot Size There is the need for the TMMU operation unit to implement the smallest lot size as possible as it enables the firm to resolve issues and deal with matters and problems quickly and efficiently (Lu, 1989). The operation process will involve the emphasis on facts and circumstances or issues. This will lead to dealing with important issues and matters that needs to be changed in a quick and timely manner. More significantly the lot size must be accurate and it must deal with matters and issues in an appropriate and proper manner (Frendendall and Hill, 2007). Maintenance In the quest for continuous improvement, there is the need for the TMMU operations unit to continuously maintain and modify their operations and matters (Frendendall and Hill, 2007). This enables TMMU to deal with matters and problems quickly and get the system running continuously. Without that, the firm will have breakdowns and system failures that will add up to waste. Thus, maintenance is an important and vital aspect of production and continuous production improvement and enhancements. This enables TMMU to remain operational and extremely productive. Respect for People TMMUs work environment is one that has an enhanced and entrenched respect for people in the workplace (Marksberry, 2012). Every effort is made by staff members to ensure that they understand each other and work hard to build trust and respect. This enables the workers to bond and build a strong relationship. This helps the TMMU to deal with their tasks and activities in a good and positive manner and also attain improved results when dealing with new and unconventional matters and situations. Teamwork TMMU also works through the consolidation of the power of teamwork and the contribution of different people with various levels of skills and competencies. TMMUs operation system is one that enhances and optimises the skills and contribution of the different parties and different stakeholders in the operation of the firm and its affairs (Marksberrry, 2012). Conclusion Toyota Motor Manufacturing,. UK is a major car manufacturer in the UK. It utilises elements of operations management that is common with other Toyota manufacturing units around the world. The fundamental idea of TMMU is to eliminate waste and to seek continuous improvement at its Derbyshire assembling unit. This is to be done through the use of various approaches and philosophies in managing production and operations to attain the best results. In terms of inventory, TMMUs assembling unit utilises a system through which they get stocks just-in-time. This means TMMU does not keep stocks and this cuts down on the cost of operations and the cost of carrying out their activities since there are no costs of holding stocks and there is no lock up of capital. This is based on the creation of a long-term relationship with suppliers and this trust is built over the years and enhanced and promoted with time. TMMUs strategy is achieved through the attainment and usage of a continuous production process and system at its assembling plant. This is done through the maintenance of their flow system and this system is critiqued and evaluated regularly for issues and matters. This is done through the us of management-by-walking-around. This involves a humanistic integration of controls by managers to ensure that the machines and processes are working in the right way and manner. Where there are issues and problems, TMMUs managers find ways of dealing with the issues and providing solutions to them. This allows the company to modify and integrate the elements and aspects of the firms strategy into its operations. In order to maintain their cycle of continuous improvement, TMMU has a tradition of accepting that there is challenge and in order to deal with the challenge and competition, there is the use of the Kaizen method which seeks continuous improvement. This involves the standardisation of improved and enhanced production systems and processes. Kaizen is achieved through the accurate work breakdown systems and structures which accurately address the manufacturing needs. And this is kept as small as possible to ensure the best and most appropriate results. There is also continuous maintenance of the activities of TMMU and this is supported by an atmosphere of teamwork and respect for people. References Bamford, D R. and Forrester, P. L. (2010). Essential guide to Operations Management: concepts and case notes. Hoboken, NJ: John Wiley & Sons Bellgran, M and Safsten, E. K. (2009) Production Development London: Springer Clarke, C. (2006) Automotive Production System and Standardisation London: Springer. Frendendall, L. D. and Hill, E. (2007) Basic Supply Chain Management New York: CRC Press. Greasley A (2013). Operations Management Hoboken, NJ: John Wiley & Sons Hindle, T. (2008) Guide to Management Ideas and Gurus London: Wiley Johnston R. Clark, G., and Schulver, M. (2012) Service Operations Management: Improving Service Delivery London: Pearson Kato, I. And Smalley, A. (2012) Toyota Kaizen Methods: Six Steps to Improvement New York: CRC Press. Lu, D. J. (1989) Kanban at Toyota Portland, OR: Productivity Press. Marksberry, P. (2012) The Modern Theory of the Toyota Production System New York: CRC Press. Monden, Y. (2012) Toyota Production System New York: CRC Press. Ono, T. (2010) Toyota Production System: Beyond Large Scale Production New York: Productivity Press. Slack N., Chambers S. and Johnston R. (2010). Operations Management London: Prentice Hall Verkerk, M. J. (2010) Trust and Power on the Shop Floor London: Eburon. Read More