Toyota Company: Comprehensive Operations Management Report

This report provides a comprehensive analysis of Toyota's operations management, beginning with an overview of its importance and key functions, including planning, design, management, and coordination. It explores the application of these functions within Toyota, highlighting the company's use of Kaizen technology and product strategies. The report then delves into the evaluation of operation management, examining process models and the significance of economic efficiency through the 3E's framework (economy, efficiency, and effectiveness). It further assesses the impact of cost and quality maximization, including a PESTLE analysis of Toyota's operating environment. The report also covers linear programming, critical path analysis, and theories to improve production lines. Finally, it discusses the importance of operational planning, capacity planning, and quality assurance within Toyota's production processes, offering insights into the company's strategic approach to operations management.

toyota company
Operations Management in Business

Table of Contents
LO1..................................................................................................................................................4
1.1 Importance of Toyota business..............................................................................................4
Operation management.............................................................................................................4
Key function of Operation management..................................................................................4
Importance of operation management......................................................................................4
Operation management in Toyota............................................................................................4
1.2Analysis of operational functions...........................................................................................5
Functions of Operation management.......................................................................................5
1. Planning............................................................................................................................5
2. Designing..........................................................................................................................5
3. Managing..........................................................................................................................5
4. Coordination......................................................................................................................5
Application of function towards Toyota..................................................................................5
1.3 Operation management evaluation.........................................................................................6
Process model in operation management.....................................................................................6
Application of model towards Toyota.........................................................................................7
LO2..................................................................................................................................................7
2.1 Significant of economy efficiency evolution.........................................................................7
3E’s & its importance...............................................................................................................7
2.2 Impact of cost & quality maximization with Toyota experience...........................................8
Cost minimization....................................................................................................................8
Quality maximization...............................................................................................................8
PESTLE analysis......................................................................................................................8
Target consumer & Production cost.........................................................................................9
2.3 Evaluation of operation management....................................................................................9
Operation management performance objective........................................................................9
M1..............................................................................................................................................10
Effective judgment & approach.............................................................................................10
Relationship with strategic planning......................................................................................10

D1...............................................................................................................................................10
LO3................................................................................................................................................11
3.1 Increment of linear programming........................................................................................11
Linear programming...............................................................................................................11
Add value by linear programming..........................................................................................11
Example..................................................................................................................................11
3.2 Evaluation............................................................................................................................11
Critical path analysis..............................................................................................................11
Network planning...................................................................................................................11
Theories to improve production line......................................................................................12
3.3 Justification..........................................................................................................................12
Importance of operational planning in production process....................................................12
Capacity planning...................................................................................................................12
Inventory planning.................................................................................................................12
Project management...............................................................................................................12
Quality assurance...................................................................................................................12
Efficient production................................................................................................................12
M2..............................................................................................................................................13
Theory to design product process...........................................................................................13
Technique for operational plan...............................................................................................13
D2...............................................................................................................................................13
References......................................................................................................................................14

LO1
1.1 Importance of Toyota business
Operation management
Operation management is defined as the area of management in which the designing and
controlling of a production process, and it also includes the business operation redesigning in the
production of goods and services. It is concerned with the management of resources in order to
meet the requirement of consumers (Mohammadi et al., 2014).
Key function of Operation management
It is a multidisciplinary field in which the operations of the company are managed in an efficient
and effective manner. The activities of the company are segmented into functional categories.
The production process includes various functions such as marketing function, accounting
function, administrative function and others. The key functions include designing,
implementation, planning, and forecasting, managing the system, and developing of success with
operations.
Importance of operation management
The operation management is used to manage the production of tangible goods in order to boost
the sales volume of the company. The technologies are applied by the operational manager for
the efficient production process which helps to reduce the cost of goods and services. It also
helps to improve the flexibility in order to meet the consumer needs, ensuring a high-quality
product, and assure safe working environment for the employees. It is very important for the
manufacturing industry because it involves converting of input into output with the requisite
level of quality.
Operation management in Toyota
The Toyota is using Kaizen technology which is a cross-sectional strategy for the improvement,
management and continues business activities with the quality, productivity and competitiveness
parameters with the direct involvement of management team (TOYOTA MOTOR
CORPORATION GLOBAL WEBSITE et al., 2016). The company is using product strategy in
order to

1.2Analysis of operational functions
Functions of Operation management
The operation management functions are explained below:
1. Planning
It is the primary function of operation management which includes the planning from the
procurement of resources till final goods production. It helps to manage the process which helps
to cope with the environmental challenges which help to increase the demand for goods and
services.
2. Designing
It starts with the product development then maintains the layout, use of machinery for production
purpose, then the development of system design information system which is the main function
to improve the performance of the production through monitoring and controlling.
3. Managing
It is the most crucial part of the success of operations. The team work is very necessary for
managing the operations. The systems are managed through employee encouragement which
helps in improving the performance of employees. It comprises of leadership, training and
culture (Slack et al., 2015).
4. Coordination
In this stage, the various part of the process is interrelated which helps to control the operations.
The roles and responsibilities are coordinated with the operational team. The two integrated
reports are developed, namely, vertical and horizontal report. The vertical report is reporting to
the manager, and horizontal report remains within the team members.
Application of function towards Toyota
The function towards Toyota is discussed below:
1. Planning

In this stage, the company has developed the global strategy which helps to develop which
helps to meet the demand of global customer locally. The company has developed kaizen
strategy for the improvement, management, and regular business activities. The product
strategy is based on the high quality with innovative technologies.
2. Designing
The company has developed the hybrid system as the basic manufacturing system and
improves its designing of engines by using alternative energy sources. The hybrid system is
used in order to achieve the company’s green machine. The designing of machines are done
through exploring the ideas from three continents.
3. Managing
The company is managing their resources in a most efficient and effective manner which
helps to provide distinct competence in its production system.
4. Coordination
The company is coordinating its various roles and responsibilities with the operational team
which helps to run the production cycle adequately.
1.3 Operation management evaluation
Process model in operation management
The process model is defined as the process in which the input is converted into out in order to
meet the consumer needs by providing high-quality products. It is also known as transformation
system in which the input such as capital, material, equipment, labor, suppliers and others are
converted into final product and services (Becker et al., 2013). The transformation system
includes alteration, transportation, storage and inspection which are impacted by environmental
factors such as customers, suppliers, economy, competitors and others. The process is monitored
and controlled for the successful operations.

Application of model towards Toyota
The company considers a hybrid system as a basic factor of the eco-car technology. The input
products are taken with the research and development which helps to provide high-quality
products to its international consumers through adapting local consumer’s demands. The
company has set up its design labs in Europe and the USA in order to understand the taste and
preference of consumers which helps to provide customized products with innovative
technology. The company has better monitoring and controlling which helps to control various
internal and external factors. The company has invested in building production plants, design
workshops, and research centers which help to provide excellent products to its consumers.
LO2
2.1 Significant of economy efficiency evolution
3E’s & its importance
The acronyms of three E’s are, namely, economy, efficient and effective. These are the
fundamentals which help to provide more flexibility and high pace in order to overcome the
present and future challenges. It helps to provide long-term benefits to the company by
improving the efficiencies of the company. The right balancing of 3E's helps to derive the high
value to the organization (Shastri et al., 2013). The valuable organizations are followed by the
economic gains. It is not easy to provide right cost, right quality, and right innovation. It requires

the strong commitment from the management of the company in order to achieve the right
balance of 3E's. The economy is achieved through reducing the cost of input which helps to
increase the profit margin. The efficiency is achieved through right effort allocation, and
effectiveness can be achieved through achieving the goals. The 3E's are very important in Toyota
because the right balancing helps to add value to an organization which derives the higher profits
for a long term. It also helps to improve the overall performance of the company.
2.2 Impact of cost & quality maximization with Toyota experience
Cost minimization
It is defined as the financial strategy which helps to achieve the effective cost in order to deliver
the products and service with the required level of quality. The effective cost helps to achieve
high profits through minimizing the cost of inputs. It includes the elimination of elimination of
waste, outsourcing non-core activities, adapting to effective methods for training and
development, and aggressive control on the overheads.
Quality maximization
It is defined as the maximization of quality through using various strategies and tools such as
such as balance scorecard, customer value maximization, and others which help to maximize the
quality within the required cost.
PESTLE analysis
The analysis is conducted below:
1. Political
The political environment of the company is stable which acts as an opportunity for the
company. The company is having free trade agreement between Japan and other countries in
which the company is operating. The government is supporting for eco-friendly products
which provide various opportunities to the company (Naik et al., 2013).
2. Economic
The economic factors include strong U.S. dollar vs. weaker yen, U.S. economy vs. gradual
growth and high growth of developing countries which helps to opportunities to grow its
business.
3. Social

The trend of increasing interest of in hybrid cars and electric cars helps to grow a business
through increasing the demands of cars but also widen the wealth gap.
4. Technological
The company is using innovative technologies in producing the products which help to
provide customized products to its consumers.
5. Legal
The company has adopted regulatory and legal laws of the country. The company has also
adopted the compensatory law, wages act, and others.
6. Environmental
The company is using eco-friendly products in order to protect the environment. The
company is having sustainable performance through using effective business process.
Target consumer & Production cost
The company is targeting large market by buying differentiation and low-cost strategy in order to
gain the competitive advantage among the competitors within the same industry. The company is
targeting large market under which all type of automobile purchasers is covered. The company
provides various types of cars under all price ranges. The company provides four wheel trucks,
SUVs, hybrid models and others to in order to satisfy the need of consumers with the customized
products. The company has introduced hybrid cars in the market with the low-cost strategy
which helps to gain the large market share of the company.
The company has achieved cost leadership strategy through using lean production, control of
suppliers, effective procurement of raw material, effective distribution and low cost of services
with the high quality of the product. The company is using low-cost strategy with the high
quality of the product through innovative skills which helps to provide unique products to its
consumers.
2.3 Evaluation of operation management
Operation management performance objective
The impact of quality, dependability, flexibility, speed and cost helps to provide the high quality
of products with the short time period which enables to build brand image in the eyes of the
consumers and it directly impacts on the sales volume of the company. These objective needs to

be met by Toyota which helps to improve the performance of operations successfully (Krajewski
et al., 2013).
M1
Effective judgment & approach
The business process management is the systematic approach which is used to show the
significance of operation management. The operation management is very important for the
company because it includes planning, designing, coordination and management of activities
which helps to provide the competitive advantage to the company (Jeston et al., 2014).
Relationship with strategic planning
The strategic planning is very necessary for the company which helps to manage the resources
through planning to perform in the future. It is a way to plan for the future with the intuitive
critical thinking. There is a direct relationship between the strategic planning and operation
management. The company has adopted kaizen strategy which helps provide distinct production
system to the company. The success of operations depends on the strategic planning of the
company.
D1
It can be concluded that operation management is very necessary for the company because it
helps to provide the high quality of products to its consumers within the particular period of
time. The function of operation management includes planning, designing, controlling and
managing. The company is using Kaizen strategy which helps to provide distinct production
system. The company has invested in research and development which helps to provide
innovative product to its consumers.

LO3
3.1 Increment of linear programming
Linear programming
It is defined as the mathematical method which is used to achieve the maximum revenue with the
least cost. It is the technique for optimization of a linear objective function which is subjects to
linear equality and inequality constraints (Vanderbei et al., 2015).
Add value by linear programming
The linear programming helps to determine the best solution in the production line which helps
to maximize the profit margin through minimizing the cost of inputs which adds value to the
product line.
Example
The linear programming is used to decide the number of products to be produced in a particular
week. The linear program is used to solve the program graphically which helps to produce a
number of products with the low cost.
3.2 Evaluation
Critical path analysis
It is defined as the algorithm for scheduling the project activities of the company. It includes the
list of activities, time required for each activity, dependencies between the activities and logical
end points. It helps to determine the shortest time required to complete the process (Meher et al.,
2014).
Network planning
It is defined as the iterative process which is used for network synthesis, network realization, and
topological design. It helps to meet the needs to the consumer within the particular time. In the
stage of topological design, the place of components is determined then the process of
connecting is developed. In the stage of network synthesis, the non-optimization methods are
involved to determine the route and size of components. In the step of network realization, the
criteria are developed to meet the capacity requirements.

Theories to improve production line
The use of critical path analysis helps to determine the short path which enables to produce high
product within the short time period. The network planning also helps to provide the criteria to
meet the needs of the consumers. It helps to improve the product line through providing efficient
and effective workflow.
3.3 Justification
Importance of operational planning in production process
Capacity planning
It is defined as the process of determining the capacity of production which helps to meet the
consumer’s demands. It helps to maximize the capacity which helps to provide successful
operations.
Inventory planning
It is defined as the process which is adopted by the company to predict the optimal quantity and
time with the organizational capacity to develop the sales volume. It helps to provide better cash
flow, high revenue, and prevent stealing within the particular time period.
Project management
It helps to protect the company from various risks and enables to complete the project on time.
Quality assurance
It is necessary for the company because it helps to provide a high quality of products to its
consumers which impact on the brand image in the eyes of the consumers.
Efficient production
It is necessary for the successful operation of the company. The efficient production can be
achieved through capacity planning, inventory planning, project management, quality assurance
and other which help to reduce the risk and cost and enable to do efficient production.