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Operations Management Of Toyota

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Question: Identify which of these activities contribute more strongly to the creation of customer value. Further, you should discuss which aspects of the company’s operations may raise ethical or environmental concerns?     Answer: 1. Introduction The success of Toyota Motor Company is significantly reliant upon the unique operations management system which emphasizes on the Just in Time inventory management and continuous improvement (Greasley, 2008). It has been found that a decentralized structure has been developed by Toyota which has been encouraging employee participation and team work. Toyota Motor Company has integrated several operational techniques such as JIT inventory management, efficient supply chain management for producing high quality cars for gaining significant competitive advantages in the intensely competitive global automobile market. Various research studies have been conducted for studying the lean manufacturing philosophy and organizational success (Gaither and Frazier, 2002). The manufacturing unit of the organization has been focusing on high productivity. Toyota has adopted a unique approach for solving critical issues as well as training its employees. The lean manufacturing philosophy of Toyota has been focusing on cost reduction through waste minimization (Heizer and Render, 2001). The company is managing quality through continuous improvement and this particular aspect will be discussed in this paper. The major objective of this paper is to provide an insight to the operation management techniques adopted by Toyota for enhancing efficiency. 2. Important role of Operations Management in Toyota Operations management in Toyota helps in scrutinizing the quality of products. The major aim of the operation management department in Toyota is to ensure efficient business operations. Operation management is also responsible for managing resources as well as distribution of products in an efficient manner. The operation management of Toyota helps in enhancing the manufacturing performance through utilization of various techniques such as leaning manufacturing, just in time and total quality management. Additionally inclusion of six sigma and supply chain management is considered to be notable activities of operation management. In the international market, the company has been continuously encountering high level of pressure for producing improved quality product (Lee and Jo, 2007). Adoption of just in time concept helps in elimination of waste along with reduction of setup costs and storage cost. It helps in controlling the flow of materials along with effective resource utilization. Different operational management techniques have been improving the efficiency and effectiveness of the operational functions.   3. Toyota Production System This section will focus on discussion of the production system in Toyota. The practical expression of people of Toyota and its customer oriented philosophy is referred to the Toyota production system. It has been observed that this system is neither rigid nor imposed by the organization (Adler, 2002). It can be referred to the set f principles which have been found to be effective in the daily operational activities if the firm. The production system of Toyota has been studies and adopted by several business organizations (Lander and Liker, 2007). The major objectives of Toyota production system is presented below: Offer best quality vehicles to the customer at the lowest possible cost. Provide job satisfaction as well as job security to the members and ensure fair treatment to all members (Toyota Australia, 2015). Toyota Production System aims to offer high level flexibility so that the company can easily respond to the market change as well as achieve profit by undertaking cost reduction activities which will ensure long term prosperity (Jayaram, Das and Nicolae, 2010). Toyota Production System has been focusing on achievement of absolute elimination of waste along with unevenness and overburden for permitting the members to work efficiently as well as smoothly (Kumar and Suresh, 2009). The foundation of the Toyota Production System has been developed on the standardization that focuses on ensuring a safe technique for operation and consistent in terms of quality (Fang and Kleiner, 2003). The employees of Toyota focus on continuous improvement of the standard procedure for ensuring enhanced efficiency, superior quality and minimization of waste (Li, 2013). Problem Solving Framework of Toyota (Jayaram, Das and Nicolae, 2010) 3.1. Lean Manufacturing Lean manufacturing system is found to be very efficient and significantly contributes in the improvement of quality. Thus, the lean manufacturing system helps in achieving competitive advantages in the international automobile market. Lean manufacturing system can be also referred to the post Fodism system of work which is more efficient as well as democratic. One of the major principal of lean production is continuous improvement in the manufacturing procedure. The lean production philosophy significantly emphasizes on the combination of efficiency with the quality of work life. it has been found that the production system in Toyota focuses on elimination of the activities that do not have any contribution in enhancing value of the product (de Bucourt et al., 2011). The concept of lean manufacturing was introduced in Toyota due to the scarcity of resources. Additionally, adoption of the lean manufacturing technique in the production activities of Toyota can be seen as the response to the high level of rivalry in the automobile market. It has been found that the lean philosophy has integrated the just in time production system along with the Kanban method of pull production (Osagie, 2009). Additionally, it has significantly emphasized on the idea of respecting the employees as well as team work. Lean manufacturing is associated with the quality and inventory control, labor management, industrial relations and supply chain management (Chun Wu, 2003). Research studies have demonstrated that lean manufacturing helps in reduction of human effort by 50% along with improvement in financial performance. Lean manufacturing system in Toyota has integrated the concept in logistics which has significant potential for controlling the transportation of materials, work in progress as well as finished goods at the optimized cost. In order to ensure long term competitiveness Toyota has focused on adoption of the JIT approach. The lean production system has a requirement for rapid flow of the relevant information along the value chain (Society of Manufacturing Engineers, 2001).   3.2. Kaizen Kaizen is considered to be the major characteristics of the Toyota Production System. In Toyota, mass production takes place (, 2015). It is evident that the Toyota focuses on undertaking all the tasks by machine or human being by defining those precisely. Additionally, it focuses n standardization of the activities that helps in ensuring superior quality through elimination of waste and improved efficiency (SAKAI and AMASAKA, 2006). The employees of Toyota associated with these procedures are responsible for following the standardized guidelines. Additionally, the responsibility of the members includes focusing on continuous improvement.  It has been observed that the issues or inefficiencies in a process will be most apparent to the process. The team leaders and the team members focus on improving their work practices o day to day basis. This procedure is known as Kaizen (Murray, 2012). Moreover, this term has another implication which emphasizes on the continual improvement in each sphere of the organizational activities starting from the basic production procedure to the customer service along with the wider community. 3.3. Jidoka Jidoka is an important concept in the operations management of Toyota. In Japanese, ‘Jidoka’ means automation. Toyota has interpreted ‘Jidoka’ as automation with a human touch.  According to this principle, the procedure will stop if it senses any problem within the process. Thus, any technical issues in the production process of Toyota can be easily detected and the process can be stopped and therefore resolved (Stevenson, 2005). The concept of automation with human touch in the manufacturing process of Toyota can be clearly recognized in the Altona Plant. It has been found that the presence of andon cord allows the team members to scrutinize as well as bring the manufacturing to stop if any kind of abnormality takes place. The manufacturing process in Toyota has followed the principle of Henry Ford which emphasized on splitting down work into some simple phases as well as delegating those tasks among the employees. in Toyota, the employees are the in charge of their own jobs. The teams are responsible for running worksites in Toyota (Berk and Toy, 2009). The teams help in identification of the opportunities that significantly contribute in making relevant amendments. Additionally, teams do play a major role in taking various initiatives for implementation of the proposed improvement by seeking co-operation from the management.   3.4. Just in Time inventory Management The Japanese automobile company Toyota has ensured success and high growth in the international market through improvement of the efficiency as well as productivity.  The idea of integrating Just in Time approach has been evolved from the aim of continuous improvement. Presently, various organizations has accepted the advantages of Just in Time Approach in operations management and integrated it into the business operation. Application of the Just in Time approach was pioneered by Toyota motor company and the term was also coined by the engineers of the company (Amasaka, 2014).  The principle concept of Just in Time revolves around the idea that the manufacturing process must be regulated by the natural laws of demand and supply. The production of a vehicle gets stimulated by the demand of the customer. Consequently, the production process of that particular vehicle is responsible for stimulating the process of manufacturing as well as delivery of the necessary parts. In this manner, the company has been able to obtain the right material such as the parts in right quantity and at right time that will be required for manufacturing the vehicle. It has been observed that Toyota has been successful in achieving improved productivity along with efficiency through focusing on continuous improvement. The concept of Just in Time had evolved from the objective of continuous improvement. In Toyota, Just in Time approach has created a flexible atmosphere where all the activities focus on elimination of waste.  The major aim of the company is acquired the required amount of material so that it can satisfy the actual demand. The production process of Toyota focuses on the customer. The Just in Time procedure focuses on elimination of inventories through interdependent associations in the operations for creating a strategy for the marketing activities which is customer focused. It has been observed that the Just in Time approach in Toyota helps in linking the suppliers to the shop floor through acquiring the required material from the suppliers.  In Toyota, Just in Time approach is responsible for controlling the delivery procedure and managing the necessary quantity for the operation.  It has been observed that the Kanban system contributes in creation of the pull for acquiring the required parts in operations and the demand of the customers is responsible for creating the initial pull of the system (Slack, Chambers and Johnston, 2010). Toyota has pioneered the Just in Time production system which is known as the zero inventoy production process. Just in Time is a manufacturing approach which is developed on the basis of three pillars. The elementary principles of Just in Time philosophy in Toyota are continuous improvement of quality, elimination of waste and a cooperative work atmosphere in the company (AMASAKA, 2009). Implementation of the Just in Time approach helped the company in minimizing the need of raw materials, work in progress along with finished goods. This method helps in reducing the time for set up and the deliveries can be coordinated from the suppliers in order to satisfy the need of production activities. It has been observed that one of the major objectives of the Just in Time method is to eliminate waste. In the production process waste refers to anything which does not add value to the procedure and cutting down the step will not affect the mechanism (Yazdani, 1995). Just in Time is the most efficient approach for managing the production operations and Kanban has been used by Toyota as an information exchange tool for different production line (AMASAKA and SAKAI, 2010). In Toyota, JIT has helped in minimizing waste of the production procedure and the defect prevention mechanism helps in enhancing the quality of the products. The organizational culture has ensured that the manufacturing team of the company has significantly focused on prevention of any defects and reduced wastes from the production process which leaded to improved productivity (Amasaka, 2002). JIT is one of the most significant aspects of the total production system of Toyota. For successful implementation of Just in Time approach, Toyota has adopted different practices such as Kanban, recruited multi skilled labors, reduced the time of set up etc.  On the other hand, the respect for human system has focused on the physical movement of the employees which will contribute in adding value to the product. Toyota has empowered its employees for handling the quality issues as well as they are responsible for supervising the assembly lines (Saruta, 2006). Just in Time approach in Toyota has helped in maintaining low inventory and ensured enhanced quality though responding promptly to the tech
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