Understanding Operations, Logistics and Supply Chain Management - Toyota Automotive Company

Running head: TOYOTA AUTOMOTIVE COMPANY
Understanding Operations, Logistics and Supply Chain Management
[Toyota Automotive Company]
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1TOYOTA AUTOMOTIVE COMPANY
Operational management is a challenging task, which has attracted ample of strategic
planning from reputed firms. However, there are a very few companies that actually have the
potentials in it to counter the challenges with effective operational strategies. Some of the
identified operational challenges can be the “managing quality” and “exploring an effective
manufacturing process through lean, agile and JIT approach” (Annarelli and Nonino 2016). This
essay is aimed at understanding the different kinds of operational challenges through the
examples from Toyota Automotive Company. Toyota is a renowned name in the world of
automotive industry in using the lean manufacturing process. The chosen approach did help the
company; however, this particular study investigates the manufacturing related challenges to the
company (Čiarnienė and Vienažindienė 2012). The study also focuses on the other issues such as
the Managing Quality. The study recommends few suggestions as well to counter the identified
challenges in the coming section of this paper.
Manufacturing process is governed through three different strategies such as JIT, lean
and agile process. Just-in-time approach is believed to be brought in practice by Toyota. The
approach provides control on the inventories. Earlier, there was a concept to have a large stock of
inventories to support the sudden need of products. After Toyota had introduced the JIT
approach, it appeared to the manufacturing process an effective way to overcome the few most
notable challenges such as the lead time on orders and the production cost (O'Grady 2012). Lean
manufacturing is very much similar to the JIT approach. The particular manufacturing process
does look for adding values to the products. It looks for analyzing the values, which is helping
the product to deliver (Ford et al. 2012). Agile manufacturing is best known for responding to the
customer’s needs and changing market behavior. This is also effective in controlling the
manufacturing cost and retaining the quality of product (Costantino et al. 2012).

2TOYOTA AUTOMOTIVE COMPANY
There is no match to Toyota in terms of producing a cost-effective and quality product.
The fact has helped the company in gaining the top position in the global automotive market in
the year 2008. The company has been able in attaining the feat due to some technically sound
manufacturing strategies such as “Lean Manufacturing”. Interestingly, the process looks handful
to the company; however, it is not so for the others. The process indeed provides several useful
tools but it is also believed that such tools do not work when it is copied. Toyota has designed
few of the tools of the lean manufacturing process to counter the challenges. They are capable in
doing so because they know the core theories of lean manufacturing (Chiarini 2012).
Sticking with the traditional manufacturing process will be a better move for Toyota.
There has been an instance when Toyota has to recall approximately around eight million cars to
adjust the accelerator pedals and replace the floor mats. This could be because of many reasons;
however, the manufacturing process is also believably the one of the reasons behind the incident.
One of the suspected reasons behind the incident was an increased production rate of vehicles.
This is theoretically against the lean manufacturing process. Agile manufacturing process indeed
encourages a large production. It might have gone wrong in picking up pace with the supply
chain complexities and globalization (Business-improvement.eu 2017). On the other hand,
Toyota is known for adding values to the product by implementing the lean manufacturing that
encourages a calculative approach towards manufacturing the unit (Gao and Low 2014).
Toyota has been criticized for quality related issues and blamed to have excessive focus
on increasing profits and gaining market shares. However, an aggressive reply came from the
president of that time proving the speculations wrong. The president indeed said that it has been
an essential part of Toyota to increase the market shares and reduce the costs of production. The
comments were supported with a fact that Toyota is second to none when it is related with the

3TOYOTA AUTOMOTIVE COMPANY
cost-effectiveness and quality products (Austen-Smith et al. 2017). Indeed, the incident was one
of such examples that produced notable evidences, which advocates the importance of sticking to
the lean manufacturing process. Incrementing the production of units year after year is an
“Agile” way of manufacturing.
Triple Bottom Line approach is a very handful approach to analyze the business
sustainability. Business sustainability is analyzed based on three factors such as economic, social
and environmental factors. Firms are analyzed on the three mentioned factors. There is no
specified unit to measure the three different factors for a firm. However, there are some variables
that could be used to measure the business sustainability. Sustainability in the economic
perspectives can be measured through various factors such as the current business value. In the
social perspectives, this can be measured through its role in addressing to different social facts.
In environmental terms, this can be measured through its strategies & efforts to address to the
different environmental challenges. Sustainable Value is a common term, which is used to
understand whether the selected business is sustainable. The higher an organization is sufficient
in addressing to the mentioned factors the maximum will be the sustainable value of the
concerned organization (Milne and Gray 2013).
Toyota is one of very few automotive companies that actually score well in the
sustainability account. It has maintained positive sustainable values through the years. This will
be interesting to analyze the company from the different perspectives such as economic, social
and environmental. The core competence of Toyota, which is to provide the quality products at
the best prices, is a good evidence to understand the economic capability of the company.
Additionally, the company has a very strong position in the different parts of world. The market
share in Japan was close to 45.5% excluding the mini vehicles. The figure was for FY2012. The