Operation Management at Toyota - Case Study Example

Operation Management at Toyota Name Course Institution Date Background of operations Toyota Motor Corporation was founded in 1937 under the philosophy of just in time (JIT) production by Kiichiro Sakichi. A combination of JIT philosophy, the principles of Kaizen, and quality control, gave birth to Toyota Production System (TPS). Toyota Production System has been continually developed and refined for several decades, with its principles and management process finding application in other types of businesses. TPS has gained a global reputation in delivering measurable benefits interns of quality and efficiency in manufacturing (Toyota 2010). General Motors Company, Ford Motor and Honda Motor CO. are among the competitors of Toyota organization in the automotive industry. More than its competitors, Toyota Australia has achieved a milestone when it reached one million cars exports in 2012 which is a major milestone in the performance of the company. Other than vehicle exportation, the company’s new engine manufacturing factory has expanded the export market in Malaysia and Thailand thus strengthening the organizations export program and the general business strategy. This has also made Toyota Australia as the first Australian automotive to manufacture both hybrid and petrol engines (Toyota 2013). External factors affecting the organization The regulations and acceptable principles on emission are becoming tighter. Most countries are coming up with stringent measures on emissions. This trend will have a major implication on the production and strategies of the Toyota Company. The economic environment is also a major factor affecting the automotive industry. Weak economic growth in the automotive industry is anticipated to go down. Change in social attitudes towards enhancing a greener friendly environment has hit the Toyota Company and it’s imperative to uphold an image which encourages this social trend (Toyota 2010). The technological advancements signify that the organization has to frequently invest in research and development so as to remain competitive. Pollution and climate change represent the environmental factors affecting the organization. Pollution reduction in the process of production as well as the utilization of the final product can help reduce the negative impacts of climate change on the environment. The recent recall of 8.5 million cars globally has had a legal impact on the operation of Toyota Company. This has also impacted negatively on the brand image and reputation of Toyota (Toyota 2010). Transformation Processes and Evaluation of the Operations 2.1) Toyotas main operations Essentially, Toyota organization utilizes Lean production to search for waste and inefficiencies and do away with them. Things that do not increase functionality, quality or value that can be done away with are expelled from the manufacturing process. Constant development through the briefest, quickest course possible is a definitive objective (Chase, Aquilano & Kacobs 2003). Toyota Production System has enabled the organization globally to efficiently fulfill customers demand, by using real-time market demand in all the production activities. The system relies on finely tuned processes in the assembly line, utilizing only the quantities of materials required when needed (Toyota 2010). The system ensures that, all the work is predetermined in terms of content, timing, sequence and outcome. Employees follow the well-defined sequence for specific tasks. This enables them to identify any variance and address it immediately. Each worker is also made to understand what to do, who provide certain parts or tasks, when they are provided, and what to do. Employees request materials with a card specifying part number, quantity and destination. In addition to that, the path which products and services flow through is simple and specified. Their system also requires a specific guide to be used while conducting any improvement process. This ensures that the number of automotives produced is directly interrelated with the client’s demands (Toyota 2010). Toyota’s four V’s of operations management Slack et al. (2010) came up with the four V’s operational model that describes and organizes the management operations. The 4 V’s consist of volume, visibility, variation and variety. It is imperative to understand how various operations are positioned on this model. VOLUME: The volume is high due to the elevated repeatability in the transformational courses of action which produces a huge number of cars consistently and the systemization of the manufacturing plant where standard techniques are situated. This leads to the production of high quality car models which are even affordable at low prices. VARIETY: The Toyota Company has different varieties of car. The variety is high and this gives customers the option to choose in relation to their needs. The models are also numerous which are affordable upon the desires of the customer. VARIATION: The variations of the Toyota car’s model are high following a severe benchmarking procedure. The organization is manufacturing high models whenever there is a demand from the dealers. VISIBILITY: This is low due to the standardized transformational process. The time gap between when the car is delivered to the dealers and when it was produced, there is no contact between the producer and the customer. The products produced are standardized, hence they attract customers. Operation performance objectives Toyota is concerned with the satisfaction of its customers’ needs for fast, dependable cars at a reasonable price as well as assisting suppliers improve their services (Slack et al. 2010). The five performance objectives include: a.) Quality: this is the production of goods and services which are free of errors and satisfy the clients. Due to good quality vehicles, the success of Toyota Company keeps on improving. b.) Speed: This means the doing things in a fast way, reducing the time between when the order is placed and when it is available. The techniques applied by Toyota company are based on operation that minimizes the complexity of through the use of flexible and robust machines. Layout and flow rearrangement enhances simplicity improving the production speed. c.) Dependability: This means performing things within time for clients to obtain their goods and services as promised. The inclusion of just in time in the system of production in the production system of Toyota has allowed the organization to deliver products as promised. d.) Flexibility: This is the ability of an organization to change their products and the manner an organization carries its business in response to the dynamic environment. Toyota has been in a position high flexibility, manufacturing little batches of various models with minimal or no loss of quality or productivity. The company has produced a variety of products that the customers can choose from. e.) Cost: This is a major operation objective. Low prices attract the majority of clients and can be achieved through the production of goods at low costs (Davis, Aquilano & Chase 2003). The Toyota Company influences the cost of its goods and services so as they can be produced cheaply. To enhance this, the company has planned to move their manufacture of trucks and multipurpose vehicles on various nations globally. From within, the performance of the organization is assisted by good performance; the organization has managed to manufacture vehicles of high quality at prices which are reasonable. Process Design Main objectives of the key process design The Toyota’s management policy has developed from the organization’s origin. This has been reproduced in the terms of just-in-time production and lean production which was influential in developing. The managerial values of Toyota and business methodologies are collectively referred to as the Toyota way. The development of the lean production in Toyota is an indication of how operations management has been embraced within the organization. Lean production is a variety on the topic of productivity focused around improving flow; it is a case utilized in the present day, of the repeating subject in mankind's history to expanding proficiency, diminishing waste, and utilizing observational techniques to choose what is important, instead of uncritically tolerating prior thoughts. Lean production is frequently seen as an issue refined as management and managers are learning from their oversights and roll out improvements (Davis, Aquilano & Chase 2003). Flow layout Just-in-time assembling and different components of the TPS performs best when they are a typical premise for synchronizing movement all through the production process. This is a libertarian course of action in which each one methodology in the creation stream turns into the client for the first process and each one procedure turns into a general store to the accompanying procedure. Just in time philosophy is important as it allows the flow of materials throughout the process - continuous movement and flow. The flow does not stop until the product reaches the clients. Just in time is the flow of individuals as they work operations flow by layout design, information flow from the operations office to the production floor, the flow of the production materials in small planned and manageable amounts. This creates a continuous flow within the Toyota organization (Toyota 2010). Control and feedback mechanisms Through concentrated relations with suppliers, Toyota is able to make new information and to disseminate that information all through the quality chain. There are different micro level components set up for joint learning. Moreover, the organization supplier system is adaptable and sufficiently hearty to manage catastrophes that may arise. The organization has an International Advisory Board, which involve oversea counsels that plan to have notions and advices on administration issues from worldwide point of view. They additionally have differing qualities of gatherings and board of trustees to reflect and screen both administration and corporate exercises (Toyota 2010). Conclusion It is an error to attempt to simply copy operations management of Toyota. Outside gimmicks of the framework are only capable of being effectively applied focused around an intensive understanding of the standards included. The guideline of expanding profits through wiping out waste must be grasped by administration first and foremost, so that when the line needs to close down to establish the main cause of the predicament, in this manner getting rid of that waste a second time, administration will sustain the decision. References Chase, R.B., Aquilano, N.J and Kacobs, F.B 2003, Operations Management for Competitive Advantage, (10th edn.), New York, McGraw Hill. Davis , M., Aquilano, N and Chase, R 2003, Fundamentals of Operations Management, (4th edn.), New York, McGraw Hill. Toyota 2013, Sustainability Report, Retrieved 21 November 2014 from http://www.toyota.com.au/toyota/sustainability/cms/download/Toyota2013_FullReport.pdf Toyota 2010, Toyota Production System and what it means for business, Retrieved 21st Nov. 2014 from http://www.toyota-forklifts.eu/SiteCollectionDocuments/PDF%20files/Toyota%20Production%20System%20Brochure.pdf Slack, N., Chambers, S & Johnston, R 2010, Operations management, New York, Pearson Education. Read More