Process Strategy and Analysis: Toyota Motors Case study Essay

Toyota Motor Corporation, japans largest and the worlds 4 carmaker by cc3 gross revenue (after General Motors, Ford, and Daimler Chrysler), had a wide range of overlaps and unfaltering brand call with lofty pure t hotshot image. Toyotas growing reputation for attribute and real small numbers of technical problems in its vehicles generated interesting client obedience and a growing engage for its crops. Toyota management was managing the communitys inventory, be and capacity very successfully and was applying cost reduction programmes very well. Toyota had riving dream to become greener. The guild made a hybrid-powered (gas and electric) sedan- the prius- that had already being snapped up in U.S. and European markets.Toyota also made huge investments in developing fuel-cell technology for its vehicles. Its gas-powered cars, pick-ups, minivans, and SUVs allow ind such(prenominal) models as the Camry, Celica, Corolla, 4Runner, Echo, Land Cruiser, Sienna, the luxury L exus line, and a full- surface pick-up truck, the v-8 Tundra. Toyota also was making forklifts and manufactured housing, and was offering consumer financial operate. With its wide statistical distri only whenion carry, strong channel dexterity and potentness, Toyota was both successfully competing with the worlds upper collar auto makers and poised to re center GM in the top spot this decade.Toyota was known world-wide for its up-to-date vehicles, strong vehicle design, comfortableness, safety, strong resistance to wind and rollover, low fuel consumption, presence of electronic and different devices in the vehicles, and strong reputation for luxury. Surveys, however, rated the attractiveness and comfort of its passenger cars as mediocre. Also rated mediocre was the off-road excellence of its SUVs. Toyota was a leader in proficient values, such as drive, takings and vehicle construction technology and had a solid ability to design and innovates clean products, to differenti ate its products, to innovate untried vehicle lines, or to extend existing vehicle lines.Global sales of Toyota vehicles were change magnitude every year beginning in 2001. Toyota showed a emergence of 20% in its sales from March 2002 to March 2003 and growth of 49.6% in its net income for the same consequence. This increase reflected non only the type of its vehicles, but also Toyotas strong efficiency in sale operations, applying matched marketing, entering into partner mail and joint ventures with former(a) companies world-wide, being price competitive, powerfully applying sales incentives such as warranty extensions, and applying advertisement tools such as TV commercials, ads in magazines and newbornspapers and exhibition presentations. Toyota wished little use of pay packages and radio commercials in its sale incentive programs. Also, Toyota was known for strong after-sale services that helped the comp whatever to strengthen relationships with its nodes and role of service provided to them.Toyota had a strong, unique bodily culture that helped the company remain very well organised and super competitive. Toyota also had strong co-operation with its partners and among its divisions that allowed Toyota to further co-ordinate interdivisional operations.In comparison to its striking three competitors, Toyota had strong manufacturing operations with the ability to get down extremely forward-looking products, taking advantage of low cost structures, ability to open new manufacturing plants, benefiting from economies of scale. Transplant assembling. Availability of technology for its product, and availability and standards of sources, the ability to enter new markets, and the like, Also, Toyota had strongly balanced its activities both domestically and internationally.There atomic number 18 five dollar bill keister ways in approve (1) reduce resources, (2) reduce errors, (3) equalize or exceed expectations of downstream nodes, (4) mak e the fulfil safer, and (5) make the swear out more satisfying to the soul doing it.First, a process that uses more resources than needed is wasteful. Reports that ar distributed to more people than necessary wastes copying and distribution time, material, substance abuser read time, and, eventually, life space.Second, for the most part, errors are a sign of little workmanship and require rework. Typing errors that are detected after the figurer printout require opening the file, making the correction, and printing the revised document.Third, meeting or exceeding expectations of downstream customers advances the process. For example, the break dance the weld, the less(prenominal) grinding required, making the sort of a finish paint moreThe fourth way a process can be improved is by making it safer. A safer workplace is a more productive one with fewer lost-time accidents and less workers compensation claims.The fifth way to improve process is to increase the expiation of the separate performing the process. Sometimes a little change, such as an ergonomicallyMake a substantial change in a persons attitude toward their work.Manufacturing cycleThe manufacturing cycle typically occurs at the allocator/ manufacturer for retailer/ manufacturer) interface and includes all processes involved in replenishing distributer (or retailer) inventory. The manufacturing cycle is triggered by customer assembles or by the call of customer demand and current product availability in the manufacturers finished- practiseds store.One extreme in a manufacturing cycle is an integrated make mill that collects identifys that is similar enough to enable the manufacturer to ready in large quantities. In this case, the manufacturing cycle is reacting to customer demand (referred to as a pull process). A nonher extreme is a consumer products firm that must produce in anticipation of demand. In this case the manufacturing cycle is anticipating customer demand (referred to as a push process). The processes involved in the manufacturing cycle hunting lodge arrival from the finished-goods warehouse, distributor, retailer, or customer output signal schedulingManufacturing and shippingReceiving at the distributor, retailer, or customerOrder arrivalDuring this process a finished- goods warehouse or distributor sets a replenishment range trigger base on the forecast of future demand and current product inventories. The resulting orders are then conveyed to the manufacturer. In some cases the customer or retailer whitethorn be ordering directly from the manufacturer. In other cases a manufacturer may be producing to stock a finished products warehouse. In the last mentioned situation, the order is triggered based on product availability and a forecast of future demand. This process is similar to the retail order trigger process in the replenishment cycle.Production schedulingThis process is similar to the order entry process in the replenishment cycle whe re inventory is allocated to an order. During the intersection scheduling process, orders (or forecasted orders) are allocated to a strikement plan. Given the desired yield quantities for each product, the manufacturer must descend on the precise employment sequence. If there are multiple lines, the manufacturer must also decide which products to allocate to each line. The objective of the payoff scheduling process is to maximize the proportion of orders filled on time while keeping cost down.Manufacturing and ShippingThis process is equivalent to the order fulfilment process describe in the replenishment cycle. During the manufacturing point of the process, the manufacturer produces to the production schedule. During the shipping phase of this process, the product is shipped to the customer, retailer, distributor, or finished-product warehouse. The objective of the manufacturing and shipping process is to create and ship the product by the promised due date while meeting qua lity requirements and keeping costs down.DistributionToyota used the traditional distribution conduct vehicles from the production places were distributed to national or regional distribution, which then distributed the vehicles to the local dealers. The three units of Toyota that produced passenger cars, SUVs, light trucks, and mini vans. Toyota was also entering into partnerships with other carmakers world-wide, such as South Korean Hyundai and Chinese carmakers, and used their distribution channels to enter the markets where these partners were predominant. With these activities, Toyota was trying to balance its distribution channels world-wide and to increase the efficiency and effectiveness of their distribution channels.ManufacturingToyota had manufacturing facilities in 37 countries and sold its products in 200 countries around the world. As the situation deteriorated in 2003, manufacturers were increasingly experiencing inventory problems as they were unable to shift their growing stockpile of cars into the saturated fleet market. With the increasing costs of product storage and reduced retail revenues, coupled with relaxed consumer demand, production cuts was likely to occur in the company. Also, Toyota was looking for ways to open production places in regions like China and Mexico, in order to benefit from ratty labour force and gain competitive advantage.In this process the product is received at the distributor, finished-goods warehouse, retailer, or customer and inventory records are updated. a nonher(prenominal) processes related to storage and fund transfers also take place.Few companies in the world excel at continuous expediency on a corporate-wide basis like Toyota MotorCorporation. Toyota is perhaps best known for its highly effective production system, dubbed lean manufacturing by an MIT study in the 1980s (Womack et. Al, 1990). But interestingly, historys most efficient method of production was not born from a sudden brainstorm by an skilful individual (although Toyota has had plenty of those over the years). Rather, it evolved into its present state over decades of sustained, high level of continuous emolument activity (Cusumano, 1985).Toyotas efficiency extends not only to the production floor, but also to product organic evolution, prototyping, testing, and all other business operations. Manufacturers the world over have been emulating Toyotas practices, and have make so with more success (Liker, 1998). However, unlike Toyota, untold of the success has been control to the production floor and little success elsewhere.Toyotas product development system, the first author found this tool to be used pervasively and with incredible power and effectiveness (Sobek, 1997). Toyota uses it to systematically guide problem-solvers through a rigorous process, document the key outcomes of that process, and propose forward motions. The tool is used so pervasively that it forms a keystone in Toyotas world-famous conti nuous improvement program. Toyota calls this tool the A3 compensate.The A3 Problem-Solving ReportThe A3 report is so named be lay down it is written on an A3 sized paper (metric equivalent of 11 x 17). Toyota has developed several(prenominal) kinds of A3 reports for different applications.Every report starts with a basis or title. The theme indicates the problem being addressed, and is pretty descriptive. The theme should charge on the problem, and not advocate a grouchy solutionThemeEvery report starts with a theme or title. The theme indicates the problem being addressed, and is fairly descriptive. The theme should focus on the problem, and not advocate a particular solutionAs Spear and Bowen (1999) elucidate, Toyota indoctrinates its people with its own version of the scientific methodevery improvement is knowing as an experiment. The A3 problem-solving process is a structure to implement the scientific method. The current condition and root cause constitutes the necessary background research, the target condition and implementation plan define the experimental design and the follow-up plan states the hypothesis.TQM is based on a number of ideas. It means thinking about quality in damage of all functions of the enterprise and is a start is a start-to-finish process that integrates unified functions at all levels. It is a systems approach that considers every interaction among the various elements of the organisation. Thus, the overall effectiveness of the system is high than the sum of the individual outputs from the subsystems. The subsystems include all the organisational functions in the life cycle of a product, such as () design, (2) planning, (3) production, (4) distribution, and (5) field service.The management subsystems also require integration, including (1) strategy with a customer focus, (2) the tools of quality and (3) employee involvement (the linking process that integrates the whole). A corollary is that any product, process, or se rvice can be improved, and a successful organisation is one that consciously seeks and exploits opportunities for improvement at all levels. The load-bearing structure is customer satisfaction. The watchword is continuous improvement. (Ross, 2)Hence TQM requires six basic conceptsA pull and involved management to provide long-term top-to bottom organisational support.An unwavering focus on the customer, both insidely and externally.Effective involvement and utilisation of the full work force.Continuous improvement of the business and production process.Treating suppliers as partners. build performance measures for the processes. (Besterfield, Michna, Besterfied & Sacre, p.2)(Crosby, 1979) presented the following steps in order to undertake TQM effectively. care Commitment Top management must become convinced of the need for quality and must clearly communicate this to the entire company be written policy, starting that each person is expected to perform harmonize to the requireme nt or cause the requirement to be officially changed to what the company and the customers really need. fictitious character improvement team From a team serene of department heads to oversee improvements in their departments and in the company as a whole. theatrical role metre Establish measurements appropriate to every activity in order to identify areas in need of improvement.Cost of quality pretend the costs of quality in order to identify areas where improvements would be profitable. fictional character awareness Raise quality awareness among employees. They non-conformance.Corrective action fill up corrective action as a result of steps 3 and 4.Zero defects planning From a committee to plan a program appropriate to the company and its culture.Supervisor training All levels of management must be trained in how to implement their part of the quality improvement program.Zero defects day Schedule a day to signal to employees that the company has a new standard.Goal setting Ind ividuals must establish improvement goals for themselves and their groups.Error causes removal Employees should be encouraged to inform management of any problems that prevent them from performing error free work.Recognition Give public, non-financial admiration to those who meet their quality goals or perform outstandingly.Quality councils Composed of quality professionals and team chairpersons, quality councils should meet regularly to share experiences, problems, and ideas.Does it all over again Repeat steps 1 to 13 in order to accentuate the never-ending process of quality improvement. (Ross, p. 6-7) commission must figure in the quality program. A quality council must be open to develop a clear vision, set long-term goals, and direct the program. Quality goals are included in the business plan. An annual quality improvement program is established and involves input from the entire work force. Managers participate on quality improvement teams and also act as coaches to other teams. TQM is a continual activity that must be entrenched in the culture- it is not just a one-shot program. TQM must be communicated to all people. The key to an effective TQM program is its focus on the customer. An excellent place to start is by satisfying internal customers. We must listen to the voice of the customer and emphasise design quality and defect prevention.Do it right the first time and every time, for customer satisfaction is the most important consideration. TQM is an organisation-wide challenge that is everyones responsibility. All personnel must be trained in TQM, statistical process control (SPC), and other appropriate quality improvement skills so they can effectively participate on project teams. Including internal customers and, for that matter, internal suppliers on project teams are an excellent approach. They understand the process better than anyone else does. Changing behaviour is the goal. People must come to work not only to do their jobs, but also t o think about how to improve their jobs. People must be empowered at the lowest contingent level to perform processes in an optimum manner.There must be a continued effort to improve all business and production processes. Quality improvement projects, such as on-time delivery, order entry efficiency, burster error rate, customer satisfaction, cycle time, scrap reduction, and supplier management, are good places to begin technical techniques such as SPC, benchmarking, quality function deployment, and designed experiments are excellent for problem solving. On the average 40% of pounds is purchased product or service therefore, the supplier quality must-be outstanding.A partnering relationship sooner than an adversarial one must be developed. Both parties have as much to gain or lose based on the success or failure of the product or service. The focus should be on quality and life-cycle costs rather than price. Suppliers should be few in numbers so that true partnering can occur. Per formance measures such as uptime, percent non-conforming, absenteeism, and customer satisfaction should be determined for each functional area. These measures should be stick on for everyone to see. Quantitative data are necessary to measure the continuous quality improvement activity. (Besterfield, Michna, Besterfied & Sacre, p.3)The purpose of TQM is to provide a quality product and/or service to customers, which pull up stakesing, in turn, increase productivity and lower cost. With a higher quality product and lower price, competitive position in the mart will be enhanced. This series of events will allow the organisation to achieve the objectives of profit and growth with greater case. In addition, the work force will have job security, which will create a satisfying place to work. As previously stated. TQM requires a cultural change. The change is substantial and will not be accomplished in a short period of time. Small organisations will be able to make the transformation m uch faster than large organisations. (Besterfield, Michna, Besterfied & Sacre, p.3)Hence summarising the key points discussed above, productivity is a study concern of managers. It implies measurement, an essential step in the control process. The productivity measurement of skill workers is generally easier than that of knowledge workers such as managers. Yet managerial productivity is very important, especially for organisations operating in a competitive environment.Production management refers to those activities necessary to manufacture products it may also include purchasing, warehousing, transportation, and other operations. Operations management has a similar meaning, referring to activities necessary to produce and deliver a service as well as a physical product.The operations management systems model show inputs, the transformation process, outputs, and the feedback system. A variety of tools and techniques make operations more productive. Seven steps are often involved i n planning and designing a product and its production. Companies can choose from six different kinds of production layouts. In order to operate the system, the managerial functions of organising, staffing, and leading must be carried out effectively. compulsory requires an information system often supported by computers. (Koontz and Weihrich, 1994 p.653)Among the various tools for planning and controlling operations is operations research, which is the application of scientific methods to the study of alternatives in a problem situation to obtain a quantitative basis for arriving at the best solution. The operation research procedure consists of six steps. Examples of tools are linear programming, inventory planning and control, the just-in time inventory system, and distribution logistics. different tools and techniques are time-event inventory system, engineering, work simplification, quality circles, total quality management, and a variety of computer-aided approaches. (Koontz and Weihrich, 1994 p.653)ReferencesBesterfield, D. H., Michna, C. B., Besterfied, G., H., & Sacre, B. S., (no date available). Total Quality Management, Third Edition, pp. 1-3.Crosby, P., (1979). Quality is Free, in the raw York McGraw-Hill, 1979.Cusumano, M.A., 1985, The Japanese Automobile Industry Technology and Management at Nissan andToyota, Harvard University Press, Cambridge, MA.Koontz, H., and Weihrich, H., (1994). Management A Global Perspective, Tenth Edition, McGraw-Hill, International Editions, pp.633-653Ross, J. E., (no date available). Total Quality Management Text, Cases and Readings, Second Edition, Florida Atlantic University, Boca Raton, Florida, pp. 1-3Liker, J.K. (ed.), 1998, Becoming Lean Inside Stories of U.S. Manufacturers, productivity Press, Portland, OR.Sobek, II, D.K., 1997, Principles that Shape Product Development Systems A Toyota-Chrysler Comparison, Ph.D. dissertation, The University of Michigan, Ann Arbor.Spear, S. and H.K. Bowen, 1999, Decoding the DNA of the Toyota Production System, Harvard Business Review, Sept.-Oct., 77(5), 97-106.Womack, J., D.T. Jones, and D. Roos, 1990, The Machine that Changed the World The Story of LeanProduction, HarperPerennial, New York.