Just-In-Time and Toyota - Essay Example

Just-In-Time and Toyota s 25 March, Outline Introduction of Toyota Business Competitive Priorities of Toyota Just-in-Time Lean Management Conclusion Reference List Introduction Effective Operations management plays a crucial role in the success of each company’s performance. Nowadays management has become more an art than a science. Managerial strategy includes ability to work with people properly and effectively in order to achieve organization’s goals and incentives. Management consists of rational assessment of different practical situations and systematic choice of tasks, detailed elaboration of strategies for goals achievement, distribution of resources, rational design, organization, direction, coordination, and control of actions along with motivation and adequate remuneration of employees. Though there are a lot of various kinds of business, the main principles of effective management are applicable in 90 per cent of all cases. The differences in managerial practice are mainly connected with the way these principles are implemented. Operations management is not only a concrete system of parameters and indicators, which it depicts, but also it includes a character and peculiarities of professional managerial thinking. In other words, it is a performance that is related to the process of elaboration, usage and improvement of production systems based on which consummate products and services of the company are produced. The ultimate purpose of effective operation management is the building of managerial system that is able to ensure implementation of necessary actions and procedures in order to receive market result out of the functioning of each organization. Description of Toyota business One of the brightest examples of successful operation management is Toyota Motor Corporation. It is the largest Japanese automobile corporation that also offers financial services and has several supplemental business directions. The headquarter is located in Toyota, Japan. The company takes the eighth place in the Fortune Global 500. The company produced cars, trucks and autobuses under such brand names as Toyota, Lexus, Scion, Daihatsu, Hino. The company sells about 9 million cars annually gaining total net revenue of more than $2 milliards (75 Years of Toyota, 2012). Assimilating relatively new trend of electromobiles, Toyota Motor tests «Toyota Plug-in HV» i Japan, USA and Europe, which is considered to affect environment less perniciously than the cars with hybrid engine. Toyota is a company with diversified and active business position that all the time searches for the ways of development. Hence, in 2007 Toyota supplies own engines for the Williams team in the races of Formula 1 (75 Years of Toyota, 2012). Competitive Priorities of Toyota The major competitive advantages of Toyota Company are fairly considered high quality of products, wide lineup, effective marketing and accurate cooperation with dealers. High quality of repair and maintenance services is ensured only with the help of the most modern equipment that allows to diagnose any vehicle systems and repair of any complexity. All cars sold by the company are warranted for 3 years or a path of 100 thousand km (whichever comes first). To control the quality of services of dealerships in each of the centers, there are the Technical Division for staff and the Customer Care Center. Employees of these departments monitor the quality of services all the time. Additional services of Toyota Center include: • services for all types of car insurance, the choice of insurance company; • pre-sale service; • exchange of a used car for a new system for trade-in; • toning and protection glass, installation of attachments and more electricians; • provision for advance payment; • the service of test-drive; • cozy cafe and car wash; • childrens corner; • system Trade-in, when the old car is taken to offset the new surcharge. The Toyota Company is characterized with 14 principles of management (Toyota Production System). They are the following: 1. Making management decisions, including the long-term, even if it is detrimental to short-term financial goals. 2. The process as a continuous stream helps to identify problems. 3. Using "pull" scheme to avoid overproduction. Organization of the work of production requires the consumer to get what they need at the right time and in the right quantity. 4. Aligning the amount of work. In order to create the right lean production and achieve better quality of service, it is necessary to align the production schedule not always strictly following the sequence of placed orders. 5. Stopping production if the quality requires. 6. Common tasks and delegation of authority employees are the basis for continuous improvement. 7. Using visual control so that no problem is left unnoticed. 8. Using only reliable, proven technology. 9. Fostering leaders who thoroughly understand the business and its philosophy and are able to teach other employees. 10. Educating exceptional people and teams who practice corporate philosophy. 11. Respecting partners and suppliers by challenging them and helping to improve the job. 12. Understanding the situation requires thorough inspection. 13. Making decisions slowly, carefully considering all options. 14. Making the company a learning organization due to detailed analysis and continuous improvement. Just-in-Time and Lean Management The Toyota Company has established the system aiming to reduce or eliminate the activities that consume resources and do not add value, which consumers are not willing to pay for. Today, this system is known as Toyota Production System, the principles and tools of which are reflected in its American version that is called Lean Production. Lean manufacturing strives to implement approaches and methods that help in reducing all possible costs and increasing productivity (Monden, 2012). These tools are focused primarily on the production of the company. The Toyota Production System fulfills consumer demand efficiently combining all production activities with the real needs of the market. Just-in-time manufacturing processes depend on the setting in the arrangement of sequence using only such amount of material that is required. The essence of the JIT system is reduced to the rejection of production in large quantities. Just-in-Time is the concept of production management which aims to decrease the inventories (Kootanaee, Babu & Talari, 2013). In accordance with this concept, the necessary components and materials arrive in the right quantity to the right place at the right time. Application of JIM improves production efficiency by reducing losses. Task scheduling as well as typical scenario in many types of businesses must constantly respond to the demand. Toyota Production System responds to this reality of life by developing an approach that can solve the problem in a cost effective manner. Just-in-time offers a smooth and an optimized process with carefully planned and gradually running cycle operations at the request of the movement of goods. It reduces the cost of wasted time, materials and opportunities. The staff can concentrate on their tasks without interruptions, which leads to an increase in quality (Kootanaee, Babu & Talari, 2013). This system gave growth in productivity and Toyota was able to diminish storage costs. Delivery of goods in general carried out so that the company could vary the scale of production in the range of 10%. In addition, Toyota began to acquire shares in the companies-suppliers. For any organization that aims to compete in the market, an important advantage is to provide consumers with the necessary and quality products at a lower price in the shortest time. JIM makes it possible to achieve through the implementation of the following objectives: Zero defects Zero time installation pieces Zero inventories Zero unnecessary operations Zero waiting time Conclusion The efforts of the staff in the Toyota Production System are concentrated on those activities that do not add value to the product from the point of consumer’s view and, therefore, do not increase the incremental cost for the company. High degree of organization processes completely avoids unnecessary costs and competes successfully in todays market (Monden, 2012). The key factors of the Toyota’s success include the support of managers at all levels of the organization, adequate allocation of resources, building long-term, trusting relationships with suppliers, proper change of the organization’s corporate culture along with the change in the flow of processes and principles of the organization’s production. Reference List 75 Years of Toyota. (2012). Retrieved from http://www.toyota-global.com Kootanaee, A., Babu, N., & Talari, H. (2013). Just-in-Time manufacturing system: From introduction to implement. International Journal of Economics, Business and Finance, 1(2), pp. 7-25. Monden, Y. (2012). Toyota production system: An integrated approach to Just-in-Time. Boca Raton: CRC Press. Read More