Toyota's Production and Supply Chain Management

The assignment delves into Toyota's renowned production processes and supply chain management strategies. It examines the core principles of lean manufacturing, just-in-time delivery, and Toyota Production System (TPS) implementation. The analysis includes a discussion on how these strategies contribute to organizational excellence and competitive advantage. The text also explores relevant case studies and real-world examples to illustrate Toyota's success in this domain.

Running head: OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Understanding Operations, Logistics and Supply Chain Management
Name of the Student
Name of the University
Author’s Note

1OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Introduction
In the era of twenty first centuries, the concept of carrying on a business has become a
complex factor. The major reason is that business or the organizational managers have to take
into consideration many crucial factors at the time of carrying on the business operations of the
companies (Monczka et al. 2015). Most importantly, the success of a particular business largely
depends on the smooth running of these business operations. In today’s businesses, three of the
most important aspects are the various operations of the business, smooth continuation of
company logistics and the success of supply chain of the companies (Christopher 2016). These
are the prime three factors of a large business organization. However, in the business operations
of automotive manufacturing companies, these three factors play an integral part. For this reason,
it is utmost important for the organizational managers to have to have a clear understanding of
the organizational operations, logistics and supply chain. The precise understanding about these
three factor helps the managers in running the manufacturing and others business processes in
the efficient way. In this context, it needs to be mentioned that there are many aspects or factors
in the area of operations, logistics and supply chain management in the business organizations
like the development of process of new products or services, the process of quality management,
location and layout, the management of people in the supply chain of the companies, various
logistic mix, the process of Just-in-Time (JIT) and lean manufacturing (Stadtler 2015). For this
report, two of the major areas are selected that are new product/service development process and
managing quality. In addition, the report is aimed to done on an automotive company and the
company is TOYOTA MOTORS. Thus, the main aim of this report is to provide a clear
understanding regarding new product/service development process and managing quality for
Toyota Motors.

2OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
Review of Operation, Logistics and Supply Chain Management Theories
The presence of different kinds of important theories can be seen related to operations,
logistics and supply chain management of the manufacturing industry. The Theory of
Production is an important one in this case that provides knowledge about permanent and
normal industrial production system in the companies. Two major parts of this theory are
Descriptive Theory and Normative Theory. Descriptive theory contains knowledge regarding the
past and present production process where normative theory contains knowledge about general
application processes in production process (Fuss and McFadden 2014).
In case of logistics, one of the major theories is the theory of Logistics Regression. This
particular model is in very much use by the production managers to predict the probability of
occurrence a particular event. In this process, this theory uses different kinds of predictor
variables that can be either categories or numerical. In the manufacturing industries like
automotive companies, the vast use of logistic regression can be seen (Wang et al. 2013).
In case of the supply chain management of the companies, the theory of Porter’s Value
Chain is a major theory. According to this theory, the primary activities of a manufacturing
organization are inbound logistics, operations, outbound logistics and marketing and sales. The
vast application of this theory can be seen in the manufacturing companies all over the world.
These are the three major theories in operations, logistics and supply chain management of
manufacturing companies (Fearne et al. 2012).
Identification of Issues in Selected Operational Areas of Toyota
At the time of carrying on the manufacturing operation, the manufacturing companies
have to deal with many issues. Some of those issues are minor issues and some of them are

3OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
major issues (Seuring 2013). This same concept can be seen in the manufacturing operations of
Toyota Motors. Toyota is one of the major automotive companies all over the world and the
company has its manufacturing operations established in Burnaston and Derbyshire in United
Kingdom. From the manufacturing operations of Toyota in United Kingdom, it can be seen that
the company has been some major issues regarding two of the operational areas; that are process
of new product development and quality management. Some of the major issues in these two
operational areas of Toyota are discussed below in details:
New Product Development and Process
It can be seen that every manufacturing organization has their own techniques or methods
for the manufacturing process. This theory is also applicable in case of Toyota. From the
production process of Toyota, it can be seen that the automotive manufacturer follows six unique
steps for the development of their products. The combination of these six steps assists Toyota in
achieving cross-functional coordination in the manufacturing process (hbr.org 2017). The first
step is to bring coordination in the whole product development process. In this step, there is not
any system of o-locating the engineers or to assign them dedicated projects. Most of the
employees related to the product development process stays in the functional area and they have
to work on the same projects. This process helps in the derivation of ideas regarding new
products. In this step, Toyota arranges different types of meeting with their engineers regarding
the development of new products or ideas (hbr.org 2017). The next step is the inclusion of
mentoring supervisors in the product development process. In this step, Toyota involves higher-
level managers and supervisors in the process of engineering design. In this context, it needs to
be mentioned that the young engineers of the company have to get approvals from their
supervisors for design approval and involvement in the product development process. The step is

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the inclusion of instigative leaders. Toyota employs many chief engineers for taking the full
responsibilities of a total vehicle development program. However, there are not given the full
power over the full functions of the product development process (hbr.org 2017).
The next step is the development of standard skill of the employees of Toyota. For
Toyota, training and development programs are the key part of the product development process
as they help the employees in acquiring necessary skills for contributing in the product
development process. In addition, Toyota has the policy of rotating the engineers with one
function to get better results. The next step is the inclusion of the policy of flexible work
standards (hbr.org 2017). With the help of contractual agreements, Toyota has become able to
standardize their product development programs in order to bring consistency in the whole
process. The next step is the development of living design standards. Toyota uses to maintain
voluminous books for the engineers for the development of checklist of the product development
process. Thus, from the above discussion, it can be seen that Toyota uses to combine these six
above-mentioned steps to make the mechanism of the product development process. Over the
years, it has been seen that the combination of these six steps has been majorly successful for
Toyota in developing new products. This combined system provides Toyota with the foundation
of the whole product development system. With the help of this product development process,
Toyota has become able to invest heavily in the aspects like training, development, mentoring
and others. All these factors together provide Toyota with the power and stability in the whole
product development process. This product development process has been a major contributor of
the success of Toyota over the years (hbr.org 2017).

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Managing Quality
For Toyota Motors, one of their major unique selling propositions is the management of
quality of their products and services. In this context, it needs to be mentioned that Toyota is
well known all over the world quality management concept, Total Quality Control (TQL) (Sallis
2014). The basis of TQM in Toyota is the concept named ‘customer first’. On a more specific
note, the policies of TQM imply the contribution of all the employees of Toyota for managing
the product quality of the company. In the year 1951, Toyota introduced the concept of Creative
Idea Suggestion System that makes the employees of the company contribute towards the
development of product quality of Toyota. In the years 1949, Toyota introduced Statistical
Quality Control (SQC) for the betterment of product quality of the company (Goetsch and Davis
2014). In addition of all these concepts, Toyota has also introduced the quality management tool
named The Toyota Way in the year 2001. This refers to a set of business principles that promote
continuous improvements in quality and elimination of waste and overproduction in the
company’s production process.
However, in the recent years, it can be seen that Toyota has been suffering from major
quality issues in their motor vehicles. The starting of this problem of quality degradation started
in 2009 when Toyota recalled cars as there was problem in floor mats. It was just the staring.
Within the four months of this incident, Toyota recalled a total of more than 7 million cars in
various separate recalls. Some of the major issues in the Toyota cars are sticky gas pedals,
software issues and others. After that, it has been seen that the customers of Toyota become less
satisfied with the quality of Toyota cars. This has been damaging the brand image of Toyota cars
and is becoming a major issue of the automotive giant (sloanreview.mit.edu 2017).

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Various Components of Operation, Logistics and Supply Chain of Toyota
The above discussion shows the product development process and the major quality
management issues of Toyota. Now, it needs to be mentioned that there are many important
components of operation, logistics and supply chain management of Toyota (Dekker et al. 2013).
It can be seen that the operation system of Toyota works in a particular way. The operation
system of is known as ‘Lean Manufacturing System’ or ‘Just-in-Time (JIT) System’ and it is
famous all over the world (Shay 2015). There are two concepts in the operation system of
Toyota’ they are ‘Jidoka’ and ‘JIT’. In case of Jidoka, quality needs to be built at the time of
production process (toyota-global.com 2017). In this process, at the completion of normal
processing process, the production machines safely stops. As the machine safely stops in case of
any kinds of accidents, the production employees can carry on the production process in another
machine. However, the operation system is different in case of JIT system. Under JIT system, the
manufacturing process starts soon after the receive of any vehicle order. In this process, the
assembly line needs to be previously stocked in order to avoid interruption in the manufacturing
process. In this operating system, no excess vehicles are produced in the manufacturing system
as only the ordered number of vehicles is produced. In addition, it needs to be mentioned that
Toyota has adopted the strategy of Lean Manufacturing as their manufacturing process (Wahab,
Mukhtar and Sulaiman 2013).
There are some major steps that Toyota follows in the lean manufacturing process. First,
elimination of manufacturing wastes. With the help of lean manufacturing process, Toyota has
become able reduce the level of wastes from their various operations of manufacturing process.
The next step is continuous improvements and it is a major principle of lean manufacturing
process. As per this principle, without continuous improvements, the production process will be

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ceased. As per the principles of lean manufacturing, Toyota has become able to leverized their
production process by respecting humanity. In this context, it needs to be mentioned that JIT is
one of the parts of lean manufacturing in Toyota. The major aspect in lean manufacturing is
maintaining quality of the products (Wahab, Mukhtar and Sulaiman 2013). This is the process of
manufacturing in Toyota. Over the years, Toyota has been hugely investing for the development
of right infrastructure for their production process. The production facilities of Toyota all over
the world are well capable to hold the production process of the company. The manufacturing
process of Toyota has been designed as per the demand of the vehicle market. For this reason,
Toyota has been getting major supports from the market. It reflects in the profitability and
productivity of the company as Toyota is one of the market leaders in the automotive industry.
Solution of Operational Management
From the above discussions, it can be seen that there are some problematic areas in the
operational management procedures of Toyota. For example, the issue of quality management
can be mentioned. It has been seen that Toyota has been suffering from degraded quality issues
in their motor vehicles. However, there are specific techniques that can be implemented in
Toyota for solving the quality management issues of Toyota. First, Toyota needs to leave the
traditional paper-based quality management system from the manufacturing operations (Heizer
2016). They need to adopt fully automated system in every aspect of their production process.
This will decrease he possibility of errors in the manufacturing process. After that, Toyota needs
to integrate their quality management system with other management system for better
coordination. In this process, Toyota needs to maintain high standard of analytical reporting for
quality management as the company will be able to identify the loopholes in the quality
management of the company. Another major solution is to continuously update and validate the

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total system of quality management system. Lack of updated system can cause damage in the
quality management system of the company. These are the major solutions that Toyota needs to
implement in order to make operational management of Toyota more effective and efficient.
Recommendations
For making recommendations to increase performance of Toyota, one of the major tools
is Triple Bottom Line (TBL) approach that has three major sustainability components; they are
economic environmental and social factors (Savitz 2013). In this regard, it is recommended that
Toyota needs to set sustainability goals and objectives for their business operations. It implies
that Toyota needs to carry on their manufacturing operations in such a way that their
manufacturing operations do not harm the environment, community and people of community.
Thus, it is recommended that Toyota needs to implement TBL accounting approach in order to
increase and measure the performance of Toyota based on three dimensions; they are economic,
environmental and social. The parameters to measure economic performance are income of the
company, unemployment cost, establishment sizes, contribution of the companies towards GDP
and others (Willard 2012). The parameters for environmental performance are carbon dioxide
concentration, selected priority pollutants, electricity consumption, hazardous waste
management, fuel consumption and others. The parameters for social performance are
unemployment rate, female workers participation rate, relative poverty and others.
Conclusion
According to the above discussion, it can be seen that operation system, logistics and
supply chain management are important factors for the manufacturing organizations. The above
discussion shows that three major theories are related with these facts; they are Theory of

9OPERATIONS, LOGISTICS AND SUPPLY CHAIN MANAGEMENT
production, Logistics Regression and Porter’s Value Chain. The above discussion shows that
Toyota Motors use six specific steps for the development of new products or services and the
combination of these steps makes the product development cycle of Toyota. In addition, it can be
seen that the quality management system of Toyota has degraded in the recent years. The study
states that Toyota use JIT and Jidoka system as their operation system. In case of manufacturing
system, Toyota has adopted the strategy of lean manufacturing. It has been recommended that
Toyota needs to adopt fully automated system to improve quality management. It is also
recommended that Toyota needs to adopt the TBL sustainability strategy to increase
performance.

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