Toyota Firm’s Production and Operations Management

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Introduction

Operations management entails the management of resources such as humans, materials, technology, and information. Besides, it is crucial to note that operations management converts the inputs into outputs through the creation of value for commodities. Toyota Automobile Company was formed in 1937. The operation management at Toyota does not only encompass functions leading to product supply to prospective clients but also Supply Chain Management in general. Toyota Company targets to connect cars, communities, and people to develop societies of smart mobility, offering freedoms of movement, excitement and safety for everyone.

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The role attached to operations managers constitutes a senior position in an organization for ensuring that every part of the production process is congregated to offer the highest quality final commodity (Morgan & Liker, 2020). The role of marketing at Toyota Automobile is the provision and support for the company on matters relevant to promotional and advertising ideals. The operations management of Toyota Corporation constitutes a ten-decision framework for efficient and effective operations.

Toyota Company has a global reach in its automobile business which uses a wide range of strategies towards achieving the ten decision strategic framework for operations management. The company integrates both local and regional automotive marketing conditions (Chiarini & Vagnoni, 2015). It forms an example of successful management with a global reach. This essay covers the ten decision framework of the company, which demonstrates the diverse areas of its business that calls for strategic engagements.

Analysis

The success of Toyota in its emphasis across the entire ten decision framework is clear. The company is credited with undertaking serious technological advances as a mechanism for enhancing its capacity to achieve the ten score points based on the decision areas. In particular, Toyota has a strong influence on the market via its design of goods and services. It is rated the most innovative automobile company globally. The main innovation in the company was anchored on the ‘Toyota Production System,’ which effectively changed its operation model (Morgan & Liker, 2020). The operating system under which its design of automobiles is rooted integrates the sense of ‘kaizen’, which is a progressive enhancement philosophy that has facilitated the progressive product improvement process.

Toyota is also focused on product innovation via research and development alongside a focus on integrated customers’ needs. For instance, it became the first automaker to develop a hybrid car called Prius in 1997. Subsequently, the company’s success is based on its culture that promotes common learning engagement and reinforces the process of questioning the status quo. The vast achievement of the company arises from understanding that workers are the most crucial element of a company’s success as they understand the ultimate needs for the organization to compete favorably in the market.

The adoption of a bottom-up approach by Toyota provides for all its departments within the company to raise ideas that offer an opportunity for improvement of both product quality and operations efficiently and effectively. The employees at Toyota Company generate slightly above two million views among which, approximately one million are executed. This approach is undoubtedly essential for product enhancement since the collective approach enhances insights that an individual could probably offer.

The other decision point is quality management. At the core of Toyota’s production strategy is quality improvement. The company’s production system exemplifies total quality management as they pursue performance excellent via the express total system of its production and supply. The production line of Toyota is specifically designed to divide manufacturing stages into typically small standardized tasks. The divided tasks are also well designed and specified through sequence timing, outputs, and contents.

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In the production process, Toyota always seeks to involve its employees throughout the entire process. Within this framework, a problem is easily identified by workers and the line easily stopped and attempts to fix it with the assistance of their supervisors. This approach enables the workers to identify work rules and procedures of problem-solving (Chiarini & Vagnoni, 2015). The halting of the production chain also enables the identification of problems, which in turn restrains defects that could arise down the line.

The organizations that adopt total quality management achieve several advantages. For instance, the clients are satisfied with higher net quality products from the process, improved financial performances and quality innovations are enhanced. Toyota Company was the best automaker globally for a four years consecutive projection since 2009 (Morgan & Liker, 2020). However, a number of its cars running to millions were recalled as a result of problems with brake, seatbelts, exhaust, and other problems.

More than 2.4 million cars were recalled by Toyota globally with approximately 55,000 units in United Kingdom alone, between May 2010 and May 2014. Some of the brands with high recall rates included Toyota Auris between October 2008 and February 2014, and Toyota Prius between October 2011 and November 2014 (Morgan & Liker, 2020). These shortcomings did not derail the innovative and productive capacity of the automaker due to the continued gains from other areas of decision points and total quality enhancement.

In the process and capacity design, Toyota gets an advanced capacity due to its adoption of two distinct approaches; the workforce management and production control. The infamous production control systems of Toyota is anchored on orders of the customers that deploys flexible capacity at every step with a view to raising capacity to furnish the existing demand or save time. Research into the company’s operational model also reveals monthly planning as a strong guide to capacity enhancement. For instance, the sales from the first month and market were essential determiners of the entire volume of production for the subsequent months.

Such an approach was considered crucial to achieving a balanced production capacity level. The other trait of Toyota was the internal workforce management. The entire staffing team is bound to respect other members of the workforce through a ‘people centered’ approach. The process that culminates in the people-centered approach has been ensuring that the work is more consistent with the demand to eliminate overproduction and mitigate the quantity of workers required to clear a given task (Chiarini & Vagnoni, 2015). Effective process design has been linked with the successful operations at Toyota Company.

Toyota is credited with effective process designs. It arises without surprise where majority other companies have attempted to imitate Toyota business model which taps on several golden rules of war such as simplicity, speed, and boldness. Similarly, the adoption of the Just-in-Time approach is an essential component of the production system of Toyota, which implies making essentially what is required, in time, and quantities needed. The company has been well-fashioned to mitigate waste production through its focus on effective balance on materials and near zero inventories via lean manufacturing approach to inventory management.

For efficient and effective practices on both a variety of products and volumes, the Toyota Production System also combined different process design mechanism such as cellular layouts, factory networks, and different supplier networks coordination to enhance its production line. These approaches promote the rates of production and guarantee effective utilization of available company’s resources. With a cellular layout, workstations are developed in u-shaped designs while machines are located in ways that ensures workers operate different machines concurrently (Vanichchinchai, 2019). Research supports the adoption of lean manufacturing and efficiency in increasing profits for the company.

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The company also benefits immensely via its location strategy dimension. In the global space, Toyota adopts a worldwide, regional, and a local location strategy. In particular, it has installed localized production plants in China, Thailand, and United States among others. It has also established a network of official dealership across different markets in Africa, among them, East African regional market. With regard to Layout design and strategy, the company has adopted unique floor plan and optimal use of walls. These designs are essential for the company since they help it to utilize the available space in the most efficient manner.

The use of straight floor plans also ensures that there are sufficient spaces in retail stores outlets for their clients to shop and move freely. This arrangement does not only improve the convenience for the customers but also creates room for the effective internal inventory management.

Toyota has also worked effectively to advance its job design and human resource strategic framework. Human resource planning and employee utilization are the main factors that spurs major impacts in achieving competitive advantage for the company. The formula for Toyota’s success is different in approach to human resource development since it encompasses learning and development. Learning and development at Toyota constitutes the four ‘P’s’ the philosophy, people, processes, and problems (Morgan & Liker, 2020). This approach has facilitated the establishment of special organizational culture at Toyota.

Through the advances of social learning, people are able to develop personal abilities and capacity, which eventually raise their productivity, an aspect that has been linked to the success of Toyota human resource management. Toyota matched diverse development mechanism to diverse needs. The model used in this case is known as ‘job-instruction-approach,’ while the training used for employees is called the ‘training within industry’. The two mechanisms are a major strength for the company as they bolster the capacity for it to excel within the industry through human resource deployment via a committed workforce (Chiarini & Vagnoni, 2015). The approach to human resource management at Toyota further differs largely as it invests in more trainings and development with lucrative incentives for workers. Increased workers’ motivation spurs unanimous growth for the company.

The supply chain management is also a crucial area of dispensation. It encompasses the management of integrated business ideals and processes to the supply chain, which in turn create essential commodities that are valuable to the customers. Efficiency within supply chain management enables the company to respond quickly to changes in their marketing or production environment. Toyota is conscious about the essence of efficient supply chain management.

It spends more time in evaluation of suppliers to deliver the best possible supplier parties with an agreement for long-term contracts and relationships anchored on mutual trust (Cil, Demir, & Yaman, 2020). The company continuously assesses the performance of each supplier based on variables such as creative proposals, costs, reliability, and quality (Hines, 2016). The projection for the company in a span of three years’ time is a 30 percent reduction in the costs across the entire supply chain while sharing 50 percent of its profits with suppliers (Morgan & Liker, 2020).

Toyota envisioned selling its cars to end consumers by establishing dealers’ network globally. The dealers in the network anchor their distribution approaches on the distribution strategies identified by Toyota to warrant their supreme excellence to meet local needs. Effective communication and customer service is a fundamental requirement for the process and Toyota has positioned itself well to tap into the benefits via professional engagement.

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With respect to inventory management as noted earlier, Toyota uses the Just-In-Time model, which had been initially discovered by Henry Ford (Morgan & Liker, 2020). The process offers a crucial dispensation capacity for the management of the company’s inventory with reduced risks and increased future returns due to effective utilization of available resources, space notwithstanding.

With regard to scheduling, Toyota use lean manufacturing in scheduling process. The main goal of the company is to reduce the overall operation costs. The concept of cost reduction is the core of every company that seeks to engage in a competitive production and marketing process in a global field. The company has established a global network for strategic location of facilities to anchor its global business (Jensen, 2017). Through a worldwide human resource network that supports business resilience and flexibility, the company has been able to engage in real-time competitive capacity against its rivals.

In this regard, Toyota uses global business capacity to provide stable and optimum automobile productivity. Its operation management adopts productivity measures based on segments of the business it considers for investment. For instance, some of the areas of productivity measures include quantity of unit products per unit time. The decade long process of developing a network for strategic location of facilities to augment the company’s global business is one of the strategic mechanisms of achieving maintenance (Vanichchinchai, 2019). A large global network effectively reinforces its competitive capacity in marketing on a wide range of markets fragmented globally against its competitors with reduced market size and networks.

Conclusion

Toyota is a recognized global automobile brand. It has been the automotive leader in the production and manufacturing processes. The position of the company as the global unique brand has reinforced its current position in the world automobile market today. Ironically, Toyota credits its inspiration to the United States’ production system but develops to supersede the production capacity by quality and quantity of the U.S.’ automakers. The inspiration from the U.S.’ was coined through a delegation to U.S. from Toyota in a study for the company’s commercial engagement. In particular the production system in the U.S.’ supermarket called Piggly Wiggly was the actual area of positioning from which the company drew its inspiration.

The actual concept drawn from the supermarket operation model is that the supermarket only re-ordered products after actual purchases by the customers are accomplished. Subsequently, Toyota reduced the quantity of inventory in its stores to levels that its employees would require for a minimal duration before reordering, a process that gave rise to the Just-in-Time inventory system. The principal objective of the just-in-time approach was to minimize the resources used in manufacturing to the least needed quantities.

References

Chiarini, A., & Vagnoni, E. (2015). World-class manufacturing by Fiat. Comparison with Toyota production system from a strategic management, management accounting, operations management and performance measurement dimension. International Journal of Production Research, 53(2), 590-606. Web.

Cil, I., Demir, H. I., & Yaman, B. (2020). Lean logistics in the 2020s and a cast study about logistics and supply chain management in Toyota Boshoku Turkey. Global Perspectives on Green Business Administration and Sustainable Supply Chain Management, 276-315. Web.

Hines, P. (2016). Toyota supplier system in Japan and the UK. In K. S. Pawar, H. Rogers, A. Potter, & M. Naim (Eds.), Developments in logistics and supply chain management (pp. 113-124). London, England: Palgrave Macmillan.

Jensen, K. R. (2017). From global strategy to strategic Co-creation. Leading Global Innovation, 33-54. Web.

Morgan, J., & Liker, J. K. (2020). The Toyota product development system: Integrating people, process, and technology. CRC Press. Web.

Vanichchinchai, A. (2019). The effect of lean manufacturing on a supply chain relationship and performance. Sustainability, 11(20), 5751. Web.

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