Process Strategy and Analysis: Toyota Motors Case study Essay

Toyota Motor Corporation, Japans largest and the worlds 4 carmaker by cc3 gross sales (after universal Motors, Ford, and Daimler Chrysler), had a wide range of returns and fast cross off names with high tonus image. Toyotas outgrowth reputation for timber and very sm every(prenominal)(prenominal)(a) amount of technical problems in its vehicles generated interesting node truth and a evolution charter for its growths. Toyota management was managing the bon tons catalogue, be and capacity very supremacyfully and was applying cost reduction programs very well. Toyota had riving ambition to break greener. The company make a hybrid-powered (gas and electric) sedan- the prius- that had already being snapped up in U.S. and European markets.Toyota exchangeablewise made huge investments in jumping fuel-cell technology for its vehicles. Its gas-powered cars, pick-ups, minivans, and SUVs include much(prenominal) models as the Camry, Celica, Corolla, 4Runner, Echo, L and Cruiser, Sienna, the luxury Lexus line, and a full-sized pick-up truck, the v-8 Tundra. Toyota also was make forklifts and manufactured housing, and was offering consumer pecuniary dishs. With its wide diffusion bring, strong channel aptitude and effectiveness, Toyota was both succeederfully competing with the worlds hurrying three auto makers and poised to replace GM in the top spot this decade.Toyota was kn testify world-wide for its current vehicles, strong vehicle excogitate, cherishableness, safety, strong resistance to face-lift and rolloer, low fuel consumption, presence of electronic and separatewise 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 in effect(p)ness of its SUVs. Toyota was a leader in technological progresss, much(prenominal) as drive, coiffureance and vehicle construction technology and had a solid a bility to design and innovates bracing convergences, to differentiate its returns, to innovate parvenue vehicle lines, or to extend existing vehicle lines.Global sales of Toyota vehicles were increasing every year beginning in 2001. Toyota showed a growth of 20% in its sales from March 2002 to March 2003 and growth of 49.6% in its sugar income for the same period. This increase reflected non only(prenominal) the bore of its vehicles, but also Toyotas strong competency in sale trading trading operations, applying angiotensin converting enzyme-to-one marketing, entering into partnership and joint ventures with other companies world-wide, being price competitive, potently applying sales incentives such(prenominal) as warranty extensions, and applying publicizing tools such as TV commercials, ads in magazines and newspapers and show readations. Toyota fatalityed little use of financing packages and receiving set commercials in its sale incentive programs. Also, Toyot a was known for strong after-sale avails that helped the company to streng therefore relationships with its customers and quality of service provided to them.Toyota had a strong, unique corporate culture that helped the company remain very well organised and thoroughgoingly 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 big three competitors, Toyota had strong manufacturing operations with the ability to produce exceedingly innovative products, winning advantage of low cost social plaques, ability to pass around new manufacturing externalisets, benefiting from economies of scale. Transplant assembling. Availability of technology for its labor, and accessibility and standards of sources, the ability to enter new markets, and the similar, Also, Toyota had strongly match its activities both domestically and internationally.There ar phoeb e bird basis agencys in approve (1) issue resources, (2) reduce defects, (3) cooperate or exceed expectations of downstream customers, (4) make the do by safer, and (5) make the ferment much satisfying to the person doing it.First, a process that uses more(prenominal) resources than infallible is wasteful. Reports that are distributed to more people than requirement wastes copying and diffusion clock time, material, user read time, and, eventually, flavour space.Second, for the most part, flaws are a sign of scurvy drubmanship and accept rework. Typing errors that are discover after the computer printout require opening the file, making the correction, and printing the revised document. trey, meeting or surpassing expectations of downstream customers improves the process. For example, the better the weld, the less grinding required, making the appearance of a finish paint moreThe fourth way a process pot 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 satisf action of the man-to-man performing the process. Sometimes a little win over, such as an ergonomicallyMake a substantial change in a persons commit toward their work.Manufacturing cycleThe manufacturing cycle typically occurs at the distributor/ producer for retailer/ shaper) interface and includes all processes abstruse in replenishing distributor (or retailer) inventory. The manufacturing cycle is activateed by customer says or by the forecast of customer aim and current product availability in the manufacturers perfect-goods warehouse.One extreme in a manufacturing cycle is an integrated steel mill that collects orders that is resembling enough to enable the manufacturer to produce in large quantities. In this case, the manufacturing cycle is reacting to customer demand (referred to as a pull process). Another extreme is a consumer products firm that essential produce in anticipation of demand. In this case the manufacturing cycle is anticipating customer demand (referred to as a push process). The processes twisty in the manufacturing cycleOrder arrival from the finished-goods warehouse, distributor, retailer, or customer overlapion programingManufacturing and shippingReceiving at the distributor, retailer, or customerOrder arrivalDuring this process a finished- goods warehouse or distributor sets a replenishment order trigger based on the forecast of future day demand and current product inventories. The resulting orders are then conveyed to the manufacturer. In some cases the customer or retailer may be rescript adoptly from the manufacturer. In other cases a manufacturer may be producing to stock a finished products warehouse. In the latter spotlight, the order is triggered based on product availability and a forecast of future demand. This process is similar to the retail order trigger pr ocess in the replenishment cycle. toil schedulingThis process is similar to the order entry process in the replenishment cycle where inventory is allocated to an order. During the production scheduling process, orders (or forecasted orders) are allocated to a production plan. addicted the desired production quantities for apiece product, the manufacturer essential decide on the precise production sequence. If in that respect are multiple lines, the manufacturer must also decide which products to allocate to each line. The objective of the production scheduling process is to maximise the proportion of orders change on time while keeping be down.Manufacturing and ShippingThis process is analogous to the order boundary process described in the replenishment cycle. During the manufacturing stagecoach 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 f inished-product warehouse. The objective of the manufacturing and shipping process is to develop and ship the product by the promised due realize while meeting quality destinys and keeping be down.DistributionToyota used the traditional statistical distribution channels 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 i n 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 cost of product storage and reduced retail revenues, bring together with relaxed consumer demand, production cuts was likely to occur in the company. Also, Toyota was feel for ways to open production places in regions like China and Mexico, in order to benefit from meretricious labour repulse and march on competitive advantage.In this process the product is received at the distributor, finished-goods warehouse, retailer, or customer and inventory records are updated. Other processes think to storage and fund transfers also take place.few companies in the world excel at unvarying improvement on a corporate-wide basis like Toyota MotorCorporation. Toyota is perhaps best known for its highly effective production arranging, dubbed l ean manufacturing by an MIT hire in the 1980s (Womack et. Al, 1990). But interestingly, historys most efficient method of production was not born from a sudden brainstorm by an ingenious 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 around-the-clock improvement activity (Cusumano, 1985).Toyotas efficiency extends not only to the production floor, but also to product development, prototyping, testing, and all other railway line operations. Manufacturers the world over have been emulating Toyotas practices, and have done so with much succeeder (Liker, 1998). However, unlike Toyota, much of the success has been confined to the production floor and little success elsewhere.Toyotas product development arrangement, the first germ found this tool to be used pervasively and with incredible power and effectiveness (Sobek, 1997). Toyota uses it to systematically turn over problem-s olvers through a rigorous process, document the lynchpin outcomes of that process, and propose improvements. The tool is used so pervasively that it forms a revealstone in Toyotas world-famous unbroken improvement program. Toyota calls this tool the A3 report.The A3 Problem-Solving ReportThe A3 report is so named because it is written on an A3 sized paper (metric equivalent of 11 x 17). Toyota has developed some(prenominal) kinds of A3 reports for different applications. every(prenominal) report starts with a etymon or title. The guinea pig indicates the problem being addressed, and is sanely descriptive. The theme should tension on the problem, and not suggest a extra solutionThemeEvery report starts with a theme or title. The theme indicates the problem being addressed, and is fairly descriptive. The theme should strain on the problem, and not advocate a particular solutionAs Spear and Bowen (1999) elucidate, Toyota indoctrinates its people with its own version of the s cientific methodevery improvement is designed as an experiment. The A3 problem-solving process is a structure to implement the scientific method. The current consideration and bag cause constitutes the infallible background research, the target condition and implementation plan outline the experimental design and the follow-up plan states the hypothesis.TQM is based on a number of ideas. It means thinking somewhat quality in terms of all functions of the enterprise and is a start is a start-to-finish process that integrates interrelated functions at all levels. It is a systems approach that considers every fundamental interaction between the various elements of the organisation. Thus, the overall effectiveness of the system is higher(prenominal) 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) supply, (3) production, (4) distribution, and (5) field service.T he management subsystems also require integration, including (1) strategy with a customer focus, (2) the tools of quality and (3) employee familiarity (the linking process that integrates the whole). A corollary is that any product, process, or service mint 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 felicity. The watchword is constant improvement. (Ross, 2)Hence TQM requires sise basic conceptsA pull and involved management to provide long-term top-to seam organisational support.An unwavering focus on the customer, both interiorly and externally.Effective involvement and utilisation of the inherent work force.Continuous improvement of the business and production process.Treating suppliers as partners.Establish performance measures for the processes. (Besterfield, Michna, Besterfied & Sacre, p.2)(Crosby, 1979) presented the following steps in order t o undertake TQM in effect. oversight Commitment clear 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 according to the requirement or cause the requirement to be officially changed to what the company and the customers really need.Quality improvement team From a team composed of department heads to carry off improvements in their departments and in the company as a whole.Quality measurement Establish measurements enamor to every activity in order to identify areas in need of improvement.Cost of quality Estimate the costs of quality in order to identify areas where improvements would be pelfable.Quality cognisance Raise quality awareness among employees. They non-conformance.Corrective action Take 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. supe rvisor training entirely 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 Individuals must establish improvement goals for themselves and their groups.Error causes removal Employees should be encouraged to say management of any problems that prevent them from performing error free work.Recognition Give public, non-financial appreciation to those who meet their quality goals or perform outstandingly.Quality councils make up of quality professionals and team chairpersons, quality councils should meet on a regular basis to share experiences, problems, and ideas.Does it all over again double steps 1 to 13 in order to emphasize the never-ending process of quality improvement. (Ross, p. 6-7)Management must participate in the quality program. A quality council must be completed 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 bonnie 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 slender place to start is by satisfying informal 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 rede the process better than anyone else does. Changing behaviour is the goal. commonwealth must come to work not only to do their jobs, but also to think about how to improve their jobs. People must be appoint at the lowest possible 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, billing 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 alternatively than an adversarial one mus t 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. Performance measures such as uptime, percent non-conforming, absenteeism, and customer satisfaction should be immovable for each functional area. These measures should be posted for everyone to see. numerical data are necessary to measure the unbroken 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 leave, in turn, increase productivity and lower cost. With a higher quality product and lower price, competitive position in the marketplace 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 sec urity, which will stimulate 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 much high-speed than large organisations. (Besterfield, Michna, Besterfied & Sacre, p.3)Hence summarising the key points discussed above, productivity is a major concern of managers. It implies measurement, an essential step in the control process. The productivity measurement of skill workers is loosely 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 deliv er 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 in 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. Controlling 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. Other 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). bring Quality Management, Third Edition, pp. 1-3.Crosby, P., (1979). 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