Operations Management - Toyota Manufacturing Automobile Corporation - Case Study Example

Student’s Name: Professor’s Name: Subject: Operations Management: Case study-Toyota Manufacturing Automobile Corporation Date: Introduction Operation strategy is defined as the total pattern of decisions aimed at shaping the long-term capabilities of an organization’s operations as well as their overall contribution to its general strategy. This is achieved through the alignment of market requirements with the operation resources of an organization. Therefore, ensuring high quality and speed in delivery of products, allowing flexibility in production to meet customers’ demands and offering a product or service at the lowest cost are the key performance dimensions for any operational strategy (Slack and Lewis 2008). Operations Management is considered to be vast based on its principles and functions and it is extensively applied in manufacturing industry, particularly in automobile industry (Mehok 2012). The study investigates the appropriateness of operations processes of Toyota Manufacturing Automobile Corporation. Toyota Motor Corporation or Toyota is an automobile manufacturer. It is a Japanese multinational organization with over 317,734 employees and sells 7.5 million auto-models such as cars, motor transport and SUV’s annually in different continents. Toyota has a supply chain processes and strategies that enable the organization to effectively manage their operations as well as achieve their objective of making the vehicles that have been ordered by customer within the shortest time possible and in the most efficient way. In so doing, Toyota also aims to deliver the finished vehicles as quickly as possible. The organization fulfils these objectives through their system known as “Toyota Production System (TPS) in which two major manufacturing techniques: Just in Time (JIT) and Jidoka are applied. Generally, Toyota manufactures cars that meet the needs of different categories of customers ranging from young to middle-aged individuals who take into account the economy of a vehicle. The organization is keen to respond to the dynamic needs of all customers who prefer reliability over luxury. The common competitors of Toyota in the automobile manufacturing industry include General motors, Honda, Ford and Volkswagen (Toyota Corporation 2013). The operations processes of Toyota Automobile Manufacturer The Toyota’s production process of continuous improvement requires that all tasks whether human or mechanical be defined in a precise manner and standardized. The main objective is to ensure maximum quality, eliminate wastes to enhance efficiency. It is notable that the foundations of Toyota Production System (TPS) are developed based on the principle of standardization to ensure a safe system of operation and a sustainable approach to delivering high quality products. As a result, the employees of Toyota seek to continually improve all their standard processes and operations as a way of ensuring maximum quality and enhance efficiency to eliminate waste (Toyota Automobile Manufacturing Corporation 2014). Through their production system approach, Toyota embodies a manufacturing culture that ensures continuous improvement. Therefore, the organization manages its operations processes by setting standards that help to eliminate waste by encouraging full participation of all employees. Basically, the Toyota Production System functions to reduce the timeline between when orders are received and the time it is finally delivered to the intended customer. This implies that the system aims to produce the best quality cars, at the lowest cost and within the shortest lead-time possible. Just in Time (JIT) and Jidoka (Building in quality and enhancing separation of man from the machine within work environment (Toyota Handbook 2015). Just-in-time JIT is a term that means to produce goods just-in-time specifically for use or sale. This Japanese manufacturing management technique was developed in the 1970s as a motivation to the Japanese encouragement to develop better and more efficient techniques that could to rebuild their economy after the occurrence of 2nd World War. It was during this period that huge defects were identified within the manufacturing system associated with inventory issues, product defects, high cost of production related to wastes and production delays. Therefore, JIT technique of production was adopted to ensure a defect free process of production by enabling to eliminate all sorts of activities that cannot add value to product or service, promote commitment to ensure a high level of quality and continuous improvement or efficient activity. Generally, the technique emphasizes on the need to visualize and identify activities that fail to add value on the operation or production process (Adeyemi 2010, p.145). The JIT concepts focus on producing and delivering the right parts, in the right quantity and at the right time by consuming the minimum resources. It is notable that the Toyota production system reduces inventory, and thus functions to prevent not only early production but also over production. The organization supports the idea that producing within a JIT manner surfaces problems quickly. This clearly indicates that reducing inventory in their system quickly exposes real problems that can disrupt the flow of their production process which in turn enables the Toyota organization to pay more attention on the need for improvement (Toyota Production System Handbook). The significant benefit of JIT technique its capability to increase the organization’s ability to compete sustainably with others because with the adoption of JIT organizations can effectively develop various optimal processes for their respective firms. However, despite such benefits the use of JIT technique as a production system is still minimal in today’s business world because of various operational and systemic deficiencies (Adeyemi 2010). Jidoka is the second operation process of the Toyota production system in which building in quality at the process and enhancing separation of man from the machine within the working environment is practiced. It is worthwhile to note that ‘Jidoka’ is a Japanese term that refers to automatic or automation but Toyota twists or radicalizes the word to mean human. By building in quality at the processes, Toyota production system focuses on processes that can easily make intelligent decisions as well as shut down automatically whenever there is an abnormal condition, problems or defects. This makes the whole system to stop functioning automatically in case trouble occurs to prevent defects from spreading downstream, prevents more injuries as well as minimizes machine damage. In addition, building in quality at processes enables the organization to adopt a better way of addressing the current condition whenever a problem occurs (Toyota Handbook 2015). Separation of man from machine is the second aspect of Jidoka operation process which suggests that in circumstances where the machine stops in the occurrence of a problem, humans should not just sit back and watch machines. This means that Jidoka gives employees or people tied to machine the freedom to utilize a more value added approach. Therefore, Toyota’s capability to separate man from the machine, not only indicates how the organization values and respects its employees but also an aspect of the organization’s efficiency to put the right measures in place to enable for even out of work to flourish (Toyota Handbook 2015). The appropriateness of the operations processes of Toyota Automobile Manufacturer Toyota Motor Company has a unique reduction system that ensures a continuous improvement as well as just in time approach to operations management. In addition, the company has focused on a decentralized structure that promotes all employee participation and encourages team working. It is worthwhile to note that the success of Toyota is more associated with the company’s capability to incorporate the concepts of supply chain and inventory management to create automobiles of high quality. As a result, Toyota has gained a sustainable competitive edge within the highly competitive and dynamic global automobile market. Therefore, it is relevant to mention that Toyota’s manufacturing system provides a unique way to problem solving, and thus enables the company to achieve a high level of productivity by continuously training its employees (Hamdan 2013). The Toyota Production System is useful in reducing the timeline between when orders are received and the time it is finally delivered to the intended customer. This implies that the system aims to produce the best quality cars, at the lowest cost and within the shortest lead-time possible. Just in Time (JIT) and Jidoka (Building in quality and enhancing separation of man from the machine within work environment (Toyota Production System Handbook). JIT is an appropriate system regardless of whether a company needs to do manufacturing or purchasing, provided orders are made more effectively by the customer to ensure zero inventories. This clearly shows that within a JIT environment the organization involved purchases produces materials only when they are needed. The underlying logic in the phrase JIT is to offer goods just in time as agreed earlier on when the order made by the customer. Therefore, it is relevant to mention that JIT production system surfaces the hidden problems particularly in the value chain, and thus minimizing the production waste of a given system (Kootanaee, Babu & Talari 2013). It is apparent that Toyota Motor Corporation has emerged as one of the world’s greatest automobile companies because of its Toyota Production System (TPS). Due to its unconventional manufacturing system, the Japanese giant company-Toyota makes the world’s best automobiles, develops new products the quickest way possible and at the lowest cost. A number of experts within the lean-manufacturing industry have supported the good quality of TPS. This is because of the conviction that managers perceive its integral role of ensuring Toyota’s success as one of the exceptional enduring truths particularly in an otherwise dark world. Over and above, Toyota has adopted and refined a continuous-improvement process known as Plan-Do-Check-Act (PDCA) that is commonly practiced throughout the business world. Therefore, the PDCA is appropriately applied in the Toyota Business Practices process through which the eight-step of this process creates an opportunity for employees to challenge a given status quo. The employees at Toyota implement this task by clarifying and breaking down the problem, setting targets and analyzing the root cause of problems as well as developing countermeasures, monitoring the results and processes so as to standardize the successful processes (Takeuchi, Osono & Shimizu 2008). Separation of man from machine is the second aspect of Jidoka operation process which suggests that in circumstances where the machine stops in the occurrence of a problem, humans should not just sit back and watch machines. This means that Jidoka gives employees or people tied to machine the freedom to utilize a more value added approach. Therefore, Toyota’s capability to separate man from the machine, not only indicates how the organization values and respects its employees but also an aspect of the organization’s efficiency to put the right measures in place to enable for even out of work to flourish (Toyota Handbook 2015). JIT-based Quality management involves inventory and quality control as well as product management functions that entirely requires combined efforts among the employees to improve the quality of their products or services. From the perspective of quality improvement, JIT makes the idea of quality as everyone’s responsibility that involves effective implementation of quality control measures. This means that the technique recognizes that workers are the most valuable resources of any organization, an idea that is highly considered in the Jidoka operation process of Toyota Organization that workers perform best when they are valued, encouraged and motivated to contribute positively to their organization only if allowed to make their respective decisions. It is during this moment that workers are able to assess the product quality at every successive operation. Similarly, JIT production system requires an organization to purchase parts in small lots that can consume less space and time, less people and facilities to accomplish the same task. It is apparent that small lots can be easily and immediately inspected to detect defects even during frequent deliveries to ensure higher quality and productivity. This is achieved through managing lower levels of inventory or scrapes, incurring lower inspection costs for raw materials to enable efficient detection of defects (Kootanaee, Babu & Talari 2013). Toyota through its separation of man from machine as a the second aspect of Jidoka operation process maintains that in circumstances where the machine stops in the occurrence of a problem, humans should not just sit back and watch machines. This provides the view that Jidoka gives Toyota’s employees or people who are tied to machine the freedom to utilize a more value added approach to addressing a problem whenever it occurs. Conclusion Based on the above discussions, it can be concluded that the Toyota’s production process of continuous improvement requires that all tasks whether human or mechanical be defined in a precise manner and standardized. The main objective is to ensure maximum quality, eliminate wastes to enhance efficiency. It is notable that the foundations of Toyota Production System (TPS) are developed based on the principle of standardization to ensure a safe system of operation and a sustainable approach to delivering high quality products. Therefore, it is apparent that employees of Toyota seek to continually improve all their standard processes and operations as a way of ensuring maximum quality and enhance efficiency to eliminate waste. Toyota has a supply chain processes and strategies that enable the organization to effectively manage their operations as well as achieve their objective of making the vehicles that have been ordered by customer within the shortest time possible and in the most efficient way. It seems not widely known that the Just-in-time approach to production that has currently gained nearly a universal acceptance in the manufacturing business world was first invented by Toyota organization. It is important to point out that under the Just-in-time operation process the crucial arbiter is often the customer because the activity within the system only takes place in response to the orders made by the customer. Therefore, production in the Toyota organization is rather pulled by the customer than merely being pushed by the capabilities or objectives of the production system itself. Jidoka as a system of designing equipment as well as operation processes to stop and demand attention to problems at their immediate occurrence is a central aspect driving the functioning of Toyota Production System. Recommendations Toyota Organization being a car manufacturer could enhance their customer satisfaction by adopting a level capacity strategy. This could be appropriately used on the specialist models that are assessed to have the current unfilled demand. It is also important for the management of Toyota to note that though level capacity strategies are cost efficient, however, they could lead to high stock obsolescence. This occurs particularly in volatile market needs of customers, a condition where the over capacity exists without recovering (Slack and Lewis 2008). It is important for the operations managers of Toyota organization to be well-informed that Just-in-time manufacturing and other related elements of their Toyota Production System, will work best and sustainably only if the entire system is considered as the main foundation for synchronizing each activity across every production sequence. Therefore, the organization should adopt a Continuous Flow Processing approach as their basic requirement of the Just-In-Time to enable Toyota to eliminate the stagnation of entire work in and between the processes. The organization will also be capable of handling out one-piece at a time of their production. It is vital that Toyota is practicing frequent conveyance because increasing their delivery frequency of various parts as a way of keeping the inventory at each process minimal requires them to do so. However, the organization should take into consideration that accomplishing this task without lowering the load efficiency of their vehicles requires them to do mix loading (University of Kentucky 2014). List of references Adeyemi, L.S., 2010, ‘Just-in-Time Production Systems (JITPS) in Developing Countries: The Nigerian Experience’, Journal of Social Science, Vol.22, Iss.No.2, pp.145-152. Hamdan, O., 2013, “Operation management, Toyota production system”, Retrieved April 20, 2015 from, Kootanaee, J.A., Babu, K.N & Talari, F.H., 2013, ‘Just-in-Time Manufacturing System: From Introduction to Implement’, International Journal of Economics, Business and Finance, Vol.1, No. 2, pp.07-25. Mehok, K., 2012, “What does implementing lean mean for your shop?’’ Retrieved April 21, 2015 from, Slack, N & Lewis, M., 2008, Operations Strategy, 3rd edition, FT, Pearson Education, Prentice Hall. Takeuchi, H., Osono, E & Shimizu, N., 2008, “The Contradictions That Drive Toyota’s Success”, Retrieved April 20, 2015 from, Toyota Automobile Manufacturing Corporation, 2014, “Toyota Production System”, Retrieve April 20, 2015 from, Toyota Handbook, 2015, Toyota Production System, Art of Lean, Inc. Toyota Corporation, 2013, “Toyota Production System”, Retrieved April 20, 2015 from, University of Kentucky, 2014, Lean Systems Program News-Toyota Production System (TPS) Terminology, Institute of Research for Technology Development, Kentucky. Read More