Toyota's Strategic Operation Management

This assignment explores Toyota's application of Total Quality Management (TQM) and Kaizen in their production system. It discusses how these approaches contribute to the company's strategic operation management, focusing on innovation, quality, and efficiency. The case study highlights Toyota's use of the Toyota Production System (TPS), which is the basis of the lean production movement that has dominated their manufacturing trends over the years.

Running head: OPERATIONS MANAGEMENT
OPERATIONS MANAGEMENT
Name of the Student
Name of the University
Author’s Note

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Table of Content
Seven dimensions of quality proposed by David A Gravin and its significance for Toyota...........4
Kaizen and Total Quality Management...........................................................................................5
Toyota applying Kaizen and TQM for achieving continuous improvement...................................6
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
The assignment focuses on the operations management of the Toyota Company. Toyota
Corporation is one of the biggest Japanese multinational automotive producers, headquartered in
Japan. This company is the biggest listed corporation as accounted by market capitalization and
revenue. This company is known as the most profitable automaker in the world due to its radical
system for service procedure, reduction of waste and improvement in quality. This study covers
the scope, nature and responsibilities of administering operations that includes- quality
management, inventory, supply chains and so on (Gunasekaran & Ngai, 2012). The KPI has been
justified for the perspectives of Balanced Scorecard (BSC) that aligns with Toyota’s operational
performance. The seven dimensions of quality as proposed by David A Gravin and its
importance for Toyota is also discussed in this paper. The study also elucidates on how Toyota
applies Kaizen and total quality management (TQM) for achieving improvement in business
operations.
Explaining KPI for the perspectives of BSC aligning with Toyota’s operational performance
The BSC relates to the performance management tool that is supported by automation
tools and design methods that is used by the managers of organizations for keeping track of
execution of business activities and monitoring the outcome occurring from these activities. This
concept provides a view on the company’s strategy from four different perspectives, which
includes-
Financial perspective- It focuses on the company’s financial performance measures
including net income, return on investment, revenue, profit and so on. This perspective is
critical for the managers for keeping track of financial performance.

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Internal procedure perspective- This perspective focuses on the internal operational
targets and also covers objectives relating to these processes that is necessary for
delivering customer objectives.
Customer perspective-This focuses on the performance goal relating to target customers.
It mainly covers growth of customers, branding objectives and service targets.
Learning and progress perspective- This focuses on different components or intangible
drivers including- information capital, human capital and company’s capital.
KPI ( Key performance indicators) refers to the performance metrics that analyzes how well
the enterprise achieve their targets. This metrics allows managers of company to focus on
administering vital activities, strategies and business risk. The two KPI recommended for each
perspective of BSC for aligning Toyota’s operational performance are given below:
Financial perspective- The two KPI recommended for this perspective are profit margin
and sales growth (Marr, 2012). Toyota’s operational performance can be measured with
the help of their profit margin and growth in sales.
Customer perspective- The two KPI suggested for this perspective in order to align with
Toyota’s operational performance are customer satisfaction and customer retention. Both
these KPI will help the company measure their customer loyalty and operation
management.
Internal procedure perspective- The two KPI recommended for this perspective are
quality cost and capacity utilization. This will help Toyota to increase the efficiency and
quality of internal operations.

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Learning and progress perspective- The two KPI recommended for this perspective are
employee’s engagement and their skills assessment. Thus, this will help Toyota to
understand the amount to be invested for improving their staff’s skills.
Seven dimensions of quality proposed by David A Gravin and its significance for Toyota
David A Gravin is an expert in quality control area who opines that quality can be utilized by
a company in strategic manner for competing effectively with other rivalries. Proper quality
strategy takes into account different dimensions of quality, which are given below:
Performance- It involves different operating features of product and other measurable
attributes such as brands ranked objectively etc.
Reliability-It relates to the extent of dependability of benefit of commodity for long time
frame.
Durability- It estimates time length that the commodity performs before its replacement.
Characteristics- This relates to additional features that increases appeal of product to the
customer.
Conformance- It indicates the extent to which product conforms to the pre- established
condition. The quality goods are usually expected to meet set standard
Aesthetics-This signifies subjective dimension that indicates type of response a customer
gives for a product. It usually represents customer’s personal preference.
Serviceability- This indicates promptness, proficiency and courtesy when the commodity
breaks down in marketplace.
These seven dimensions of quality has huge importance for Toyota as they adopts unique
approach to producing product that is “lean production”. This kind of manufacturing involves

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five part procedure that involves defining value for customer, defining the stream value, striving
for excellence and pulling from consumer back. They mainly concentrate on making flow of
product through their value- added procedure without any interruption. In addition, as this
company has been operating in the global market, they face several challenges from their
competitors in terms of price and quality of product. However, this dimension has huge
significance for Toyota as it helps them to maintain consistency in producing quality product and
sustain in vulnerable competition (Brown et al., 2013). Moreover, much of this company success
basically comes from their astounding reputation in quality.
Kaizen and Total Quality Management
Total quality management refers to the procedure by which the management as well as
employees of the company becomes involved in improving the quality of goods and services to
their customers. It is the continuous effort made by the organization for ensuring loyalty of their
customer and their satisfaction level (Abdallah, 2013). It also ensures that each worker are
working towards improvement of business culture, systems, processes and attain long tern
success in the business. Most of the organizations use this approach for improving their internal
operations, increasing productivity, reducing waste and eliminating inventories.
Continuous improvement mainly depends on the Japanese concept termed as Kazien.
This philosophy refers to the different methods used by the organizations for improving their
operations. It generally involves identification of best practices benchmarks and instilling sense
of workers ownership of procedure (Knechtges & Decker, 2016). It focuses mainly on –
decreasing the time length required for the specific procedure, problems with suppliers as well as

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customers etc. This is mainly the long- term approach in work, which methodically seeks to
attain small changes in the procedure for improving efficiency as well as quality.
Toyota applying Kaizen and TQM for achieving continuous improvement
Both Kazien as well as TQM is the hub of the production system of Toyota. Like every
mass –manufacturing system, this company process need that every mechanical as well as human
task be defined precisely and standardized for ensuring high quality, increasing efficiency and
eliminating waste. As the members of the this corporation have the responsibility to follow
standardized guildlines in their work and seek continuous improvement, they adopts both these
TQM and Kazien (Yang & Yang, 2013). In addition, the day to day improvement which the team
members as well as leaders makes in their operation practices as well as equipment are basically
known as Kazien. Furthermore, implementing these two approaches also helps the company to
strive improvement in each sphere of their activities that ranges from basic production procedure
to serving quality product o their customer.
Conclusion
From the above report, it can be concluded that strategic operation management is
necessary for every organization to operate in the global market. Furthermore, implementation of
TQM and Kazien also helps the company to innovate product with best quality and improve their
quality of work at every level of operations. The above case study reflects that Toyota has
applied TPS ( Toyota production System) in manufacturing product, which is the basis of lean
production movement that dominates their production trends over the last few years.

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References
Abdallah, A. B. (2013). The influence of “soft” and “hard” total quality management (TQM)
practices on total productive maintenance (TPM) in Jordanian manufacturing
companies. International Journal of Business and Management, 8(21), 1.
Brown, S., Blackmon, K., Cousins, P., & Maylor, H. (2013). Operations management: policy,
practice and performance improvement. Routledge.
Gunasekaran, A., & Ngai, E. W. (2012). The future of operations management: an outlook and
analysis. International Journal of Production Economics, 135(2), 687-701.
Heizer, J. (2016). Operations Management, 11/e. Pearson Education India.
Hitt, M. A., Xu, K., & Carnes, C. M. (2016). Resource based theory in operations management
research. Journal of Operations Management, 41, 77-94.
Knechtges, P., & Decker, M. C. (2014). Application of kaizen methodology to foster
departmental engagement in quality improvement. Journal of the American college of
radiology, 11(12), 1126-1130.
Marr, B. (2012). Key Performance Indicators (KPI): The 75 measures every manager needs to
know. Pearson UK.
Tjader, Y., May, J. H., Shang, J., Vargas, L. G., & Gao, N. (2014). Firm-level outsourcing
decision making: A balanced scorecard-based analytic network process
model. International Journal of Production Economics, 147, 614-623.

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Yang, C. C., & Yang, K. J. (2013). An integrated model of the Toyota production system with
total quality management and people factors. Human Factors and Ergonomics in
Manufacturing & Service Industries, 23(5), 450-461.
Zehir, C., Ertosun, Ö. G., Zehir, S., & Müceldilli, B. (2012). Total quality management
practices’ effects on quality performance and innovative performance. Procedia-Social
and Behavioral Sciences, 41, 273-280.