Assignment Example of Toyota Motor Corporation

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Introduction

Every organization has several operations which are carried out daily to ensure the productivity and effectiveness of the business to enhance the productivity levels. Operations management effectively plans, organizes, and supervises the daily production activities and manufacturing of the products or services.

The responsibility of the operation manager is to understand the processes which are going on within the company to get the flow of products on time which directly links with the supply chain management. In contrast, the coordination involved in directing and regulating that things are being delivered on time while the processes are in control is linked with the logistics. The critical function of the operation management is related to the supply chain management, where the delivery of goods and that they are delivered on time to the required customers is managed along with ensuring the good quality of these products (Adam & Swamidass, 1989). Also, supply chain management is important because, without it, the process of production and manufacturing cannot be achieved as the entire system is linked to the operations procedure.

Toyota Motor Corporation

Toyota is a Japanese multinational automotive company that is involved in the manufacturing of vehicles all around the world and is known for its superior quality. The company’s headquarters are in Toyota City, Japan, in Aichi.

The founder of this company is Kiichiro Toyota, and it came into being in the year 1937 on August 28. It is considered that Toyota is one of the largest market leaders for vehicle manufacture as it can produce 10 million each year and that Honda is one of its top competitors of Toyota in the market. In Europe, it increased its sales by 8% in 2021, achieving a record of 6.4% in market share, with customer demand increasing widely (Palmer et al., 2018).

In this essay, the issues related to supply chain management and logistics of Toyota will be analyzed according to two perspectives which include the JIT and lean management utilized by Toyota and secondly how it manages its quality of operations.  

JIT and Lean management at Toyota Motor’s

JIT and lean management are the functions of operation production in which a pull system is adopted so that only the required amount of products and the quantities made are needed. The main objective of the JIT system is to eliminate wastage and to save the space of the warehouse so that unnecessary products are not produced and that only a proper amount of inventory levels are available, which will improve the efficiency of the processes.

To apply these elements, a Kanban system sends signals when the shelves are empty, and that product must be stored according to the customers’ requirements. The same for Toyota Motors means that cars are built individually according to build order, and the specifications are required as only that vehicle will be built (Jayaram et al., 2010). Considering the issues in supply chain and logistics, from the start of the pandemic to the wars associated with Brexit.

Delivering deliveries always delayed the higher prices of all the essential materials and the reduced inventories of supermarkets. It is considered that the shipping costs will remain high and that manufacturers need to maintain their sustainability in the market so that their brand reputation is contained in the market. As Toyota adopted the JIT and lean management in their operations function, it was followed by many other companies as they realized that by adopting this, it could grow widely and be successful because it was building individual cars based on the required orders of their customers.

During the year 1950, Toyota’s corporation in Japan faced issues related to their supply chain management because they couldn’t predict how many vehicles they should keep in their warehouses and how large they should keep the warehouse. Hence, it became an issue that started problems in the company. This was causing the size of the Toyota market to reduce and the economic lot size as they required a lot of money to keep many inventory levels in their warehouse. Also, overproduction can increase lot sizes, and the entire process of efficiency decreases. Due to these problems, Toyota introduced the concept of JIT, which has now become popular in many manufacturing industries for efficiency and for the elimination of wastages (Parashar, 2016). 

The advantages for Toyota to adopt this system are many as they started having more customer orders, leading to Toyota achieving their strategic goals and maximizing profit. JIT helped Toyota reduce overproduction in their company, having a budget maintained leading to the competitive advantage, so lead times were also reduced.

Toyota used two main pillars for adopting lean management: the concept of judoka and JIT, which means the highest quality, low cost, and shortest lead time (Núñez & Babson, 1998). This shows how Toyota could resolve its supply chain issues by applying the concept of JIT in its processes. We can compare the JIT used by KFC with Toyota, where the service provided is food to the customers in KFC. KFC needs to ensure that the food they cook is according to the number of customers visiting their restaurants daily.

This system at KFC is still being improved as tracking how many customers are coming and making orders becomes a challenging task for KFC, and they have also adapted Kanban (Núñez & Babson, 1998). 

This discussion provides the idea that Toyota’s operations management function was able to handle the issues on its supply chain management and that even during covid19 pandemic, it was able to handle its deliveries through its retailers and as the infrastructure of the company is designed through Kanban signals, so they can grow in long-term and face the challenges. However, there are issues in its production lines. 

Total Quality Management at Toyota

The concept of quality management describes the quality standards adopted in the business, and all things are being followed according to the rules and guidelines of the company (Sohal & Morrison, 1995). As we discussed, Toyota and its application towards TQM then has limited interdepartmental barriers, has a service of customers which is proven to be excellent, and also for the suppliers, it takes full time towards training.

It recognizes quality as the main aspect of providing excellent products and ensuring that the company’s management functions like sales or finance are running smoothly by the employees. Several years before, Toyota had faced criticism and complaints for the vehicles they were producing, like there was gas leakage from its spare parts. Fatal kind of accidents was noticed, so to resolve these issues, a meeting was held about improving its operations and that they should work on their quality.

Toyota was also facing problems due to its weak management, and customers were dissatisfied with their vehicles as employees weren’t collaborating well, leading to quality complaints in the company (Sohal & Morrison, 1995).

The top management is responsible for managing the operations, and it is their responsibility to control quality in ensuring that all the processes are standardized and that customers are satisfied. As operations management is linked with supply chain and logistics, even if a minor issue arrives in the manufacturing, it disrupts the entire supply chain. As Toyota is a manufacturing company, it had to implement strategies for improving its operations through total quality management.

It was implemented by taking several steps; firstly, Toyota extended the management responsibilities from the products and services, then examined their customer’s requirements about the products and started improving their commodities. It started focusing on the impacts which were caused through the procedures they were following and also about the role of minimizing their operations through the use of JIT, which is discussed above; as they used the approach kaizen for measuring and making the processes stable enough so that overall the issues of quality are resolved.  

The commitment that the executives of the business provide is the key to the implementation of the TQM practices to be carried. The objectives of TQM are accomplished when there is motivation between the employees, commitment of the organization to work together, and creating the empowerment of the employees. As Toyota knows how to manage its inventory level and keep the lead times short, it can ensure that the processes are standardized and all the factors stay in control.

The owners of Toyota have established the concept of Poka-yoke which is used to identify any mistakes in the process as it is a mistake-proofing concept adopted in lean management. Using this approach is more useful when ensuring TQM at Toyota because it provides a clear and concrete approach for the suppliers, manufacturers, and retailers through proper administration and supervision.

This, in turn, creates a smooth supply chain process (Dillon, 2021.). TQM enables the organizations to ensure that when customers receive the products, they have good quality features and won’t be disappointed by their quality. Supply chain management issues have been growing rapidly in every organization due to quality issues and late deliveries. Many factories shut down when the warehouse doesn’t have enough space to keep or handle the products. As Toyota uses lean management techniques, it is at an advantage as it can handle the inventories for lower levels because of the pull order system they have adopted. Then the quality is also linked with this skeletal system because the customers require good-quality products.

It is better to make products according to the orders so that overproduction doesn’t arrive. TQM provides numerous benefits when it comes to the satisfaction of the customers, due to which they have been successful greatly. Their TQM is focused on fulfilling the demands and requirements of their customers by following a pull system through receiving the customers’ orders and then building the product within time and control.

The management of operations is vital because, since the pandemic, many organizations have shut down due to flight delays. Their supply chain was disturbed, so there were delayed deliveries and high costs. When implementing these operations functions, the problems can be resolved by proper management and by following the procedures established by the organization (Singh et al., 2021)

Economical, Sustainable, and Social approach by Toyota

Every business strives to produce or manufacture those products which are sustainable and eco-friendly to the environment because it also is a factor in the satisfaction of the customers. In the same way, Toyota also planned the idea of zero waste to prove its sustainability and contribution to the environment. They launched a program in which Toyota has challenged that by 2050 it will become a company producing zero waste and that it is their long-term goal. Toyota has taken the initiative to reduce the emission of carbon dioxide into the atmosphere and in their manufacturing plants so that the logistics function can be improved.

Additionally, Toyota also provides social support by supporting during conditions of natural disasters, which include heavy rains and earthquakes, by providing volunteers from their company like the employees as well as some vehicles for helping the people. By 2023 Toyota has aimed for its manufacturing plants to be carbon-free, which is its goal. Then Toyota also contributes to the economy, as it has a total employment of around 470,000 jobs, providing a net of 23.6 billion for its employees.

Hence, they provide jobs to many people worldwide. Hence, it can be analyzed that Toyota has contributed to the environment regarding sustainability and the economy by providing jobs and income (Amasaka, 2009).

Recommendations

In analyzing Toyota’s supply chain management and logistics, Toyota is working effectively in all its processes. As a whole, it is successful in carrying out operations. Toyota has adopted the JIT and lean, so it has been able to eliminate wastages. Through TQM, they can carry out operations under control and through standard procedures. I will recommend that they should still work on the TQM approach as they need to satisfy the customers and that they are still some customers who relate complaints. Secondly, Toyota can work effectively towards their sustainability approach for making an environmentally effective and clean approach to increase their sales. 

References

Adam Jr, E.E. and Swamidass, P.M., 1989. Assessing operations management from a strategic perspective. Journal of Management, 15(2), pp.181-203.

Alaska, K., 2009. The foundation for advancing the Toyota production system utilizing the new JIT. Journal of Advanced Manufacturing Systems, 8(01), pp.5-26.

Dillon, A.P., 2021. Zero Quality Control: Source Inspection and the Poka-yoke System. Routledge. 

Jayaram, J., Das, A. and Nicolae, M., 2010. Looking beyond the obvious: Unraveling the Toyota production system. International Journal of Production Economics, 128(1), pp.280-291.

Jitendra Parashar., 2016. Why Toyota’s Just-in-Time Method Is Critical to Its Success. Available at:https://marketrealist.com/2016/05/toyotas-just-time-method-critical-success/ [Accessed August 21, 2022]. 

Núñez, H.J. and Babson, S., 1998. Confronting change: Auto labor and lean production in North America. Wayne State University Press.

Palmer, K., Tate, J.E., Wadud, Z. and Nellthorp, J., 2018. The total cost of ownership and market share for hybrid and electric vehicles in the U.K., U.S., and Japan. Applied Energy, 209, pp.108-119.

Quality: An International Journal.

Singh, S.R., Rastogi, A. and Singhal, S., 2021. JIT: the best approach after lockdown in country. International Journal of Services Operations and Informatics, 11(1), pp.75-86. 

Sohal, A. and Morrison, M., 1995. TQM and the learning organization. Managing Service

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