The Operations Management Topics to the Contemporary Business Environment - Case Study Example

Evaluate the Utility and Relevance of Any One of the Operations Management Topics to the Contemporary Business Environment Table of Contents Introduction 2 Literature Review: Utility and Relevance of the Production System to the Contemporary Business Environment 3 Critical Analysis: Production System of Toyota 6 Conclusion 12 References 13 Introduction Production/operations management is the application of the production system that accelerates the value-added services in a well-controlled manner. Eventually, production management within an organisation ensures the transformation of the inputs into the final qualitative products. In accordance with the traditional view, the manufacturing management was recognised to ensure economic benefits with regard to the labour specialisation (New Age International, n.d.). This essay intends to discuss the importance and relevance of the production system within an organisation. Besides, the essay also intends to discuss the utility of the production system within the contemporary business environment of Toyota Motor Corporation. Literature Review: Utility and Relevance of the Production System to the Contemporary Business Environment Ragnarsøn (2000) highlights the vital role pertaining to sub-contracting related to the production system. He further conveys the importance of sub-contracting role and the replacement of the traditional view pertaining to the production management. In this regard, it can be further ascertained that the traditional production system i.e. mass production has been replaced by information society, where flexible production is in process. Ragnarsøn (2000) surveyed the application of the flexible production system. In order to fulfil the demand of the altering perspectives of the customers as well as the increased competition of the modern day organisations this production system is applied (Ragnarsøn, 2000). Schramm & et. al. (n.d.) conveys that production system design is regarded as one of the core activities regarding the production management. The application of the production system mainly facilitates to transfer the production strategy into advance decisions. Structural complexity reflects the underlying project structure. Uncertainty has been regarded as the most important reason for generating complexities within the projects. In addition, teambuilding management has been highlighted as a key constituent that greatly promotes the establishment of ‘work-crews’ and divides the responsibilities among them (Schramm & et. al., n.d.). In accordance with the view presented by Ali (1997), production system mainly lays emphasis on the sub-system along with the equipment design. In this respect, the operational efficiency is measured by evaluating the outcomes with that of the set goals. According to Kumar (n.d.), production system entails the managerial decisions that assist in the designing of the product process being executed for deriving the final product. In the view of Toczek (2010), application of the effective production system ensures cost control along with improved quality. In order to maintain quality at a reasonable cost, few skills necessitate the framework. On further note, Bullinaria (2005) focuses on related important elements of the production system. He considered production system as the knowledge database that utilises the derived information for attaining the desired goals pertaining to the annual turnover. According to the survey conducted by New Age International (n.d.), it is revealed that there are certain issues presented within the operations management. Application of effective production system ensures higher productivity and profits. Production system entirely depends upon the production design as discussed by Kay (2009). In accordance with Agha & et. al. (2009), the application of the production system ensures the development of the industrial operations. Johnson (1993) has reflected upon the significance of the production planning along with productivity methodologies for moulding the manufacturing facility. With regard to the utility and relevance of the production system, Kootanaee & et. al. (2013), discusses the concept of Just-in-Time. JIT concept within the production system stands out to be an important factor. In the similar note, PourAsiabi & PourAsiabi (2012) throws light on the concept and importance of JIT. The application of the structured approach pertaining to the production system is a significant medium for improving the organisation’s manufacturing capability as discussed by Arinez & Cochran (2000). Apart from deliberating the production system structure, the authors also discuss the system architecture that helps in the initiation of the accelerated and effective production process. The system architecture incorporates the entire process that entails the vendors of sourcing materials, production design and process and the tentative time for the delivery of the final goods. Implementation of effective production system ensures quality and quantified deliverables that result in profits maximisation. In the similar context, Ballard & et. al. (n.d.), have deliberated upon production control techniques that are essential in the production system. The inclusion of principles with respect to the production control ensures the reduction of the wastage with respect to the material being used. The underlying principles include in-depth planning, team work during the decision-making process, removal of constraint within the production process along with deriving lessons from the breakdown among others. These principles ensure proper flow of the work process within the production system. Fioretti (2008) states the importance of the production function. The organisations sustainability depends upon the execution of effective production function. In this regard, it has been further ascertained that the production functions help a company to fulfil the requirements of the customers. For accelerated production quantity and quality, efficient product planning is required. This results in increasing ‘returns to scale’. Similar view has also been given by Tan (2008). With respect to the production function, the author discusses about the Cobb-Douglas function. This concept is widely used for representing the relationship that exists between the raw materials and the finished products i.e. input and output. Apart from this, another important aspect of the production system is the product development and the designing of production system. This ensures proper execution of the entire process and assists the company in gaining sustainability in the competitive market scenario as discussed by Tolio (2008) and Bellgran & Säfsten, (2009). They further stressed upon the virtue of manufacturing flexibility as an important factor in the production process. With the ever-changing demands of the customers and the influence of globalisation, it has made it necessary to include latest technologies and maintain flexibility with the new methodologies for sustainability. Critical Analysis: Production System of Toyota In order to derive an understanding regarding contemporary business practices related to production system, a critical evaluation has been made of Toyota Production System (TPS) which is deemed as one of the leading and globally acclaimed production systems. Within the periphery of Toyota Production System (TPS), the manufacturer has shown an outstanding level of performance. The distinctive practices within Toyota i.e. Kanban cards along with quality circles have been widely accepted and applied within other organisations as well. Kanban is the operating method, which is used by TPS to increase the productivity. In this regard, Kanban as the operating method incorporates within it three elements. These three elements are deriving information, transferring the information and production information. An in-depth analysis of TPS reflects the process and development of its production system. It has been observed that TPS underlies few basic rules that assist in the execution of the effective production system. On the basis of first rule, it highlights the specification of the work pertaining to content, timing along with outcome. The next rule is the connection between the customers and the suppliers. Subsequently, it has been determined that the connection being established must be direct, which will based upon receiving responses and sending of the requests. Moreover, the next rule reflects the pathway of the products and the services. It has been ascertained that the selected pathway must be simple in its form and direct. The last rule followed by TPS is decision with regard to the improvement of the operational methods (Spear & Bowen, 1999). In accordance with TPS, it has designed certain countermeasures to combat the operational drawbacks along with increasing the productivity. Unpredictable downtime as the countermeasure reflects the mechanical breakdown of the machinery. Besides, safety stock is used to meet the requirements of the customers. Time-consuming set up is another countermeasure being adapted by TPS, with a view to provide the final products immediately on time. It has been observed that the suppliers usually face challenges pertaining to supplying of products during the breakdown of the machinery. The suppliers produce final products corresponding to large batch sizes. This further mitigates the problem of shortage during emergency need due to machinery breakdown (Spear & Bowen, 1999). In keeping with the prior goals of TPS, it essentially enables to provide qualitative products and services to the end customers. On further note, TPS ensures the development of the employees’ potential, which is based on the mutual respect, cooperation and trust. TPS further ensures reduction in the cost by eliminating wastes along with maximisation of profits. Moreover, TPS further helps in the development of standards pertaining to flexible production. The entire process being involved in TPS has been represented by a pictorial diagram given below (Art of Lean, Inc, n.d.). TPS (Art of Lean, Inc, n.d.) TPS model was primarily built upon two vital pillars of the production system i.e. Just-In-Time (JIT) and Jidoka (quality). JIT concept mainly focuses on the production as well as the delivery of the right part, appropriate amount and perfect timing while using the resource. However, this particular system has been known to reduce the inventory thereby, preventing early and over production. Furthermore, it has been observed that the production system under the JIT method exposes the underlying problems very easily. In accordance with TPS, by reducing the inventory the real problems can be determined easily. Another important pillar of the TPS is Jidoka, which is fundamentally considered for quality control. On further note, with regard to Jidoka, there lie two vital elements; one is quality assurance during the production process and the next is the segregation of the man from the machine. TPS is the concept that reflects continuous improvement. The four basic pillars of TPS are elimination of wastes, quality, cost and productivity (Art of Lean, Inc, n.d.). As affirmed that TPS stands upon four basic pillars, these vital elements have been briefly discussed in this segment. Elimination of wastes is a necessary part in improving the production quality and deriving effective TPS. In this respect, it has been further determined that there are a few types of wastes that create hurdle in TPS. Scrap, over-production, waiting, conveyance, motion, inventory and processing are a few types of wastes pertaining to TPS. The next pillar of TPS has been regarded as quality. Production of qualitative products frames an important factor within any manufacturing organisation. It has been observed that the customers tend to decrease their consuming power, if quality of the products deteriorates. Subsequently, it is acknowledged that quality frames an important constituent for meeting the requirements of the customers. The chain for the quality improvements can be determined by following the diagram given below (Art of Lean, Inc, n.d.). Quality Chain Diagram (Art of Lean, Inc, n.d.) Cost is considered as another pillar of TPS that replicates the concept of cost reduction. In accordance with the concept pertaining to cost reduction, it has been observed that a product’s selling price greatly associates with the decisions of the customers. On further note, in order to maintain stability and profit margins, it is necessary to eliminate wastes and ensure reduction in the costs incurred. Apart from this, productivity has also been considered as one of the base pillars of TPS. It can be considered that productivity is important within any organisation for sustainability. It has been determined that in order to accelerate the productivity of an organisation, it is necessary to implement TPS in an effective manner. Besides, safety and morale also frame important aspects of TPS. In recent scenario, implementing workplace safety has been considered as an important method of improving the operational standard of the organisations. In many organisations, it has been observed that numerous accidents have occurred due to the unorganised environment. Morale is the factor that greatly contributes to the creation of positive workplace. It has been determined that personal identity is essentially a reflection pertaining to the work experience and integrity among others (Art of Lean, Inc, n.d.). Conclusion Toyota Production System has been identified to focus on the improvement of the manufacturing process. TPS as a method has been greatly adapted by various organisations for increasing their productivity. The basic elements of TPS ensure effectiveness of the manufacturing process. In fact, it has been observed that equipment frames an important part for the maximisation of profits. In this respect, the essay further reflects that breakdown in the manufacturing system hampers the entire reliability of the production system. The importance of production system within Toyota has underlined the virtue of efficient production process management for eliminating wastes and ensuring production effectiveness. Customers are the most important factor for any organisation to sustain within the competitive market scenario. In order to meet the requirements of the customers, it is necessary to provide them with qualitative products. The four basic pillars of TPS assist in the development and improvement of the production system of the organisations. Elimination of wastes, cost, quality and productivity are the base elements of TPS. Moreover, the concepts such as Just-In-Time and Jidoka have been determined to be universally acclaimed by a number of global companies upon the successful execution by Toyota to rest a decisive competitive advantage. Just-in-Time has enabled Toyota to reduce inventory stock requirement which in turn has facilitate to reduce operational overhead costs. References Art of Lean, Inc, No Date. Toyota Production System Basic Handbook. TPS Handbook, pp. 1-36. Agha, M. H. & et. al., 2009. 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Academia, pp. 1-13. Spear, S. & Bowen, H. K., 1999. Decoding the DNA of the Toyota Production System. Harvard Business Review, pp.1- 106. Toczek, H., 2010. Using a Production System to Control Costs and Improve Quality. Anfp, pp. 33-36. Tan, B. H., 2008. Cobb-Douglas Production Function. Docentes, pp. 1-7. Tolio, T., 2008. Design of Flexible Production Systems: Methodologies and Tools. Springer Read More