Toyota Company: Lean Operations and Production

Introduction

In the past two decades, lean production has significantly become sophisticated, making it easier and economical for people to carry out efficient production businesses across the world. Two major driving forces for this concept are advances in balanced input-output ratio and efficiency in business operation within optimal resource use.

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The driving forces of this concept have broken down many physical barriers to lean operations and production, which used to limit the optimal performance in companies. The propelling factors for the increasing interconnectivity in lean production and operations of businesses are the availability of low-cost highly-skilled human resources, proper quality monitors, efficient production, and operations tools.

Also, accounting instruments have significantly reduced the transaction cost of carrying out businesses. Entrepreneurs have always sought the means of maximising the output and reducing the costs to zero. In the 21st century, in the realm of globalisation and technological breakthrough, the philosophy of the lean production model was the key tool for achieving the above-mentioned goal. Lean operations model, traditionally identified as the philosophy aimed at minimising the number of production costs, provides such an opportunity and, as a result, is a common practice nowadays (Dolgui and Proth 218).

Designed and suggested by Toyota, the principle of lean operations model is obviously a product of its time. Its very existence is predetermined by the technological breakthrough of the era and the existence of the information society. Without the principle of lean operations model, modern companies would not be able to exist in the environment of the global economy. Thus, this reflective treatise attempts to explicitly review the concepts of lean operation and production as tools for improving companies’ performance with reference to the Toyota Company.

Importance

The significance of a lean operations model for present-day entrepreneurship cannot be overrated. If it has not been for the introduction of the aforementioned principles, the idea of a narrow job specification and, therefore, the premises for a consistent increase in the quality of the end product would not have emerged. Moreover, lean production has also made it possible to improve the strategies adopted for accounting.

It is essential that lean operations model helps in making efficient use of every single resource available; thus, the output-input ratio of a company may rise considerably with the adoption of the principle in question (Starr 15). The element of flexibility will make the internal business environment for a company sustainable since the establishment will be flexible to the changes in the supply and demand of the production factors.

Lean operations and production are vital in a business environment. Reflectively, the concept of leanness defines the feasibility of a company and its solvency within a specified period of time. In contemporary society, the term sustainability refers to the ability to survive within a profitability model.

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In a business environment, the sustainability of lean production and operation are affected by forces in the market, decision science, corporate structure, and real financial management. Therefore, a business organisation that has placed stringent measures and strategies aimed and monitoring expansionary modules within feasible levels is likely to operate within the optimal and most profitable business environment when the concepts of lean operations and production are balanced (Dolgui and Proth 114).

As a matter of fact, lean production and operations management is the backbone of a promising company since they determine survival and productivity in terms of the flow of operations and streamlining overhead costs. Reflectively, companies “must rationalise their processes with the aim of cost reduction, rather than using cheap materials or processes at the expense of quality” (Starr 31). Besides, the models verify risk preparations before informed decisions are made, especially in a competitive environment. This procedure is necessary for monitoring decision science and distribution of risk elements and forecasting into future swings in the economic climate market.

In order to effectively implement a sustainable lean production and operations strategy, the management is to balance both the short-term and long-term considerations towards decision making. Management that ensures long-term obligations are fulfilled in a proactive manner to ensure that short-term desires are achieved. Lean operations consider mostly the role played by resources invested in technology, continued innovations in the production of new products, and results of intensive researches in the market to identify fresh market niches.

Customer satisfaction is the focal point of the Toyota Company in attaining a competitive advantage in the market above other players as part of the leanness strategy (Bowman 13). Specifically, lean operations and production systems are employed in the Toyota Company to monitor and increase productivity at minimal error margins. This is possible because this model of operations management system allows for operational competitiveness as it cuts down unnecessary overhead costs from waste and under-utilisation. Besides, it monitors wrongful use of resources or misappropriation in a production segment since each process must be accounted for.

Managers leading production implementation strategies may record dismal performance due to lack of insight to integrate micro-decisions alongside the macro decisions made if the concept of lean production is not balanced within the operation-production needs. Therefore, the success of Toyota’s operations management system is directly dependent on soft artful skills, such as creativity and communication, besides technical aspects such as management principles in its lean operations model.

Moreover, the aspect of localising labour and factors of production has played the most important role in the operations management strategy for the company in fulfilling its lean production and operations strategy (Starr 33). Under lean production and operations, decisions made should be dependent on available resources such as investment portfolio, infrastructure, personnel size, experience and efficiency, for specialised high skill assignments requiring specific qualifications. These results would provide an in-depth estimation of the distribution of probability for future expected returns.

Lean operations, therefore, can be deemed as rather important in the global market. They are connected very closely to the JIT (Just in Time) principle, which allows for a connection between organisational management and business practice. This makes a company’s performance more efficient and sustainable, irrespective of the environment of operation (Medina-López, Alfalla-Luque and Arenas-Márquez 39). In the process of balancing the act, a quality operations management system should be capable of applying the scientific skills in an artistic manner through informed and perfectly framed use of soft skills to address technical aspects of production management.

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Objectives

Among the key objectives, which a company integrating the principle of lean operations model uses into its production process, including the goal of reducing the amount of costs for the production process, logistics (including transportation), promotion campaign, and the delivery of the end products. However, apart from a drop in financial losses, a rapid growth in the quality and the amount of goods produced is also included into the key objectives of accompanying with lean operations as its basic strategy (Dolgui and Proth 119).

The topological structure of a lean production system consists of communication and operations management coordination which help in determining efficient performance and optimal resource use. Basically, this concept stresses on optimal use of production resources and customer satisfaction within accepted standards of moral obligation on the forefront, while the stakeholders are at the bottom of the triangle. This is implemented with the view of long term benefits. For any organisation to be successful in leanness, it should be ready to make use of information and knowledge. Basically, within this objective, the continuum of increasing the value of quality in operations will be informed by data, information, and knowledge (Bowman 17).

The ever changing environment in business has continued to offer some assistance on how human resource managers consider employees in their companies (Dolgui and Proth 121). The initial step towards actualisation of a quality lean operations management system involves research and creation of an informed and practical business monitoring channel. As a matter of fact, lean operations management strategy actualises a business vision.

Within the business vision and production management, the aspect of quality in operations management embraces the aspects of business processes within the company from acquisition of raw materials, handling and purchasing, and shipping after packaging. Besides, the system monitors financial constrains and progress of each of these segments. The consideration of efficiency is based on the contributions it makes towards ensuring that the organisations continue to gain a competitive advantage in the market (Starr 41).

Through numerous researches conducted, results have continued to show that lean production and operation are critical in long-term organisational functionality, especially in the implementation of short and long term projects aimed at capital structure expansion. The importance of lean operation is the assurance that contributions to organisational culture and human resources have an influence on the lean organisational productivity and business performance. In line with the main objective to determine the forecast density closest to actual value, it is of essence to investigate the principles of relative performance of different competing forecast densities as part of the lean operations system (Dolgui and Proth 119).

For consistency, the parameters and variables used to manage the lean production and operations management are aligned to ensure that threshold on model-independent is achieved within competing models. In order to address the underlying issues in stochastic volatility estimation, the parameters should revolve on the relevant information which is consistent with the real and expected parameter matrices. In order to achieve lean operations management, Toyota’s existing forms of system monitoring are periodically upgraded to introduce multiple operating system models such as ratio analysis in operation management. This is compatible with tracking and analysis within and without the company (Bowman 28).

Basically, the lean operations and production management systems at Toyota include the aspects of cost, dependability, speed, quality, and flexibility. These variables determine success or failure in business. These variables are achievable through value delivery, value addition, and creativity. Reflectively, these concepts are techniques and tools essential in the art of operations management.

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This process is inclusive of the scientific aspects such as a technical process of understanding the manoeuvres involved in operations management, their application, and evaluation criteria which must be monitored continuously. Despite having this efficient operations management system, the company has not fully established a mechanism of monitoring progress at micro level and depends on macro auditing in decision making. Therefore, the company has to deal with the risk of internal redundancy (Dolgui and Proth 119).

Principles

Traditionally, five principles of lean operations include the concept of value from the customer’s perspective, the identification of the steps to be taken in order to accomplish the goals set previously, the facilitation of the process flow, a complete compliance with the existing demand, and the avoidance of any type of costs or wastes (Starr 21).

Therefore, lean operations set a sustainable environment within a company, both from an environmental (waste reduction) and an economic (change in perspective) aspect. When the recurring costs such as labour, production space, and cost of machinery are curtailed within a manageable level, the company will increase its returns on investments. Besides, the excess labour may be channelled to another line of production besides the extra production space.

It is apparent that the lean operations concept of the Toyota Company has efficient knowledge and experience in uniqueness of products and services in terms of their requirement in order to produce high quality products. The variables are connected at central point by strategic planning which encompasses costing, flexibility, and dependability to create a smooth continuous operation tracking model that operates like computer from one segment to another (Dolgui and Proth 120).

Therefore, the major part of the success puzzle for operations management delivery for the company operates on the periphery of the soft skills involving the timeless vision of organisational principles, defining value of the business, determining requirements, clarifying the vision, building teams, mitigating task, resolving issues, and providing direction for each production unit (Bowman 11).

In order to implement lean production and operations management, a company should adopt the six-sigma approach in quality control and assurance within the different dependent and independent units. Six-Sigma is an experience of lean operations management that is used to develop business operations that ensure efficiency through optimal and timely production. Six-Sigma is adopted to attain significant effects of production efficiency through periodic review of the production matrix. Actually, Six-Sigma is a sequence of business events, it delivers positive outputs which develop business aim of reliability in the production and operations systems (Medina-López, Alfalla-Luque and Arenas-Márquez 39).

Quality control is commonly utilised to promote superiority of business products since it is aimed to reduce wastage of production resources that can be experienced in long queues and ineffective task outputs. This concept usually integrates employees to provide the highest quality of products through self assessment and proactive approach to skills tests. It is done to prepare, synchronise, and manage the multifarious activities of company through efficiency module.

This alternative can be compared to the three balls that are juggled by the circus performers. By implementing the quality control alternative, the Toyota Company has visualised the future risks and hurdles in the implementation of any production plan and can take suitable remedial measures for unforeseeable risks such as changing customer preferences for different automobiles (Starr 32).

Production efficiency through lean operations is critical in the production line since it is characterised by optimal utilisation of allocated factors of production within the least possible cost. Basically, a quality integration management system performs optimally via integration of appropriate scientific methods and techniques.

To enrich artistic managerial talents, scientific techniques come in handy to not only magnify the margins of success, but also to ensure a smooth transition of an idea or an event after another. Besides, to avoid an imminent failure, it is vital for the integrated management system to focus on a defined edge since “proper tailoring of techniques and tools assume as an essential part of the regulatory strategy” (Bowman 32). Reflectively, the lean integration management system in the Toyota Company has improved on the supply chain, production, and distribution processes.

In order to come up with a viable lean operating system, it is of essence to include quality control, progress measurement, and flexibility in planning to accommodate any eventuality in a company. Quality in operations management determines the success of goal planning and analysis. As a matter of fact, quality ensures smooth operation and coordination of different variables that function simultaneously.

Despite constant metamorphosis of operations management designs in the market, determinant of quality basically remains unchanged. Irrespective of the size and nature of a business entity, quality in operations management is the major verification factor for success of a short term, middle term, and long term projections (Medina-López, Alfalla-Luque and Arenas-Márquez 37).

The success and failure of a business entity are dependent on the effectiveness and quality of the lean operations management since it determines how planning, integration, implementation, and control are integrated. In order to strike an optimal performance balance, the process of designing a quality operations management system should commence with a clear overview of budgeting, objectivity, and scheduling.

In addition, this part should include control procedures and assessment. Lean operations incorporate customer-focused strategies and the key postulates of sustainability. The concept of lean operations is especially important for running a business in the environment of global competition. With lean production and outsourcing, the automobile parts industry is increasingly important for global production chains. Many automobile companies such as Toyota are going over to modular assembly in which the main components manufacturer not only supplies but also coordinates the design, manufacture, and installation of the major parts or systems of the car or truck (Bowman 16).

Summary

From the above refection, it is apparent that a company will gain in the long run through implementation of lean production and operations management, irrespective of line of business or size of the establishment. The overall effects of adopting lean production and operations management have benefits that outweigh their limitations. For instance, when the lean production and operations management are fully adopted, there will be a reduction in cost of factors of production such as labour, raw material unitisation, and efficiency of the entire process.

Thus, the reduced actual production costs will result in accumulated gains as a result of controlled costs that are recurring. Reflectively, if Toyota had not introduced the concept of lean operations in the modern organisation management theory, attaining a high level of performance would be barely possible nowadays. Lean operations allow for a complete reinvention of the company’s accounting model and the following reduction of costs, as it helps reduce waste almost to zero. The reduced wastes translate into efficiency and sustainability of production and company operations processes.

Works Cited

Bowman, Singh. “Corporate restructuring: Reconfiguring the firm.” Strategic Management Journal 1.4 (2003): 5–14. Print.

Dolgui, Alexandre and Jean-Marie Proth. Supply Chain Engineering: Useful Methods and Techniques. New York, NY: Springer Science & Business Media, 2009. Print.

Medina-López, Carmen, Rafaela Alfalla-Luque, and Francisco Arenas-Márquez. “Active Learning in Operations Management: Interactive Multimedia Software for Teaching JIT/Lean Production.”Journal of Industrial Engineering and Management 4.1 (2011): 31–80. Print.

Starr, Martin. Production and Operations Management. Alabama, Al: South Western, 2009. Print.

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