Toyota: A Report on Managing Quality and People in Operations

This report provides an overview of Toyota's operations and supply chain management, focusing on quality and people management. It examines Toyota's operational functions, manufacturing processes, and infrastructure used to manage its delivery system. The report highlights different theories used in Toyota's Total Quality Management, including Lean production and Just-in-Time manufacturing, and discusses how these strategies contribute to minimizing waste and maximizing efficiency. It identifies key issues faced by Toyota, such as maintaining service quality, meeting customer demand, and adapting to technological changes. Furthermore, the report emphasizes the importance of skilled workers and employee management. Finally, the report suggests recommendations to address the challenges, including the impact of supplier quality, technological advancements, and customer preferences. The report also touches on the importance of Total Quality Management and its implementation within Toyota.

Toyota: Managing quality and managing
people in operation and supply chains

Table of Contents
INTRODUCTION...........................................................................................................................1
Operation function..................................................................................................................1
Manufacturing process...........................................................................................................2
Infrastructure used by Toyota to manage delivery system.....................................................2
3 Different theories that are used in the Total quality management by the Toyota...............3
Recommendation....................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Organizations around the world aim at understanding the requirement of customers and
in providing them with services and products that enables to raise the sales and profitability.
There are different type of departments that work together with a common goal to attain the
business to reach their set goals and objectives (Slack Brandon-Jones and Johnston, 2013).
Companies need to maintain the supply as per customers’ demand. In this process there are
different types of issues that are faced by the business like managing suppliers as they are the
one who deliver or provide raw materials for the firm. Main focus of the research is made on
Toyota. It was founded in the year 1937 and is headquartered at Japan. With time there are many
changes that have taken place in respect with technology and the organization has always
focused on making improvement in their products so that satisfaction level of customers can be
raised. Main reason for selecting this business is that at earlier years cited firm was able to
maintain their sales and profitability (Asgari, Nikbaksh and Hill, Farahani 2016). However, with
time there are many new firms that are come up and these deliver similar type of products and
services. This has slowly reduced the performance of business in negative manner and the
quality that was delivered by the firm has also reduced. This essay covers on the key operation,
logistics and supply chain management issues that are faced by operations and supply chain
manager of Toyota. Further, it provides recommendations through which the issues faced by the
firm can be reduced.
Operation function
Management can be determined as a social process that consists of responsibilities of
regulating the operations of the firm in order to achieve their desired goals. There are mainly
three different type of functions that are considered by Toyota, it includes planning,
organization, controlling and staffing. There are strategic plan that are developed by Toyota and
this enables them to guide long term operations of the firm (Saraph, Benson and
Schroeder,1989). There are three main aspects that are focused by the firm and these are: quality,
customer’s satisfaction and manufacturing. These are applied so that operational cost can be
minimized and in meeting customers requirement and in maintaining the quality of services.
Cost generic leadership strategy is applied by the firm in order to attain competitive advantage in
this global market.
1

There is different type of functions that has to be performed by the business so that
customer’s requirements can be met. In this process, it requires to have proper support from the
side of workers (Menon, 2012). Toyota makes sure that they understand the issues that are faced
by employees and accordingly appropriate steps are taken and this way they are able to maintain
smooth running of business operations. Majority of the manufacturing operations are done by the
firm centrally and spare parts are transferred subsidiaries for assembling. This is a type of
strategy through which Toyota is able to minimize cost and ensure uniformity. Further, highly
skilled workers are hired and this is helpful for the business to make sure that they are able to
support the business to grow and in attaining the set objectives (Jacobs, Yu and Chavez, 2016).
There are close monitoring of the operations of the business and they also make evaluation
against organizational targets.
Manufacturing process
Toyota production system is used by the firm and this is determined to be the way of
making things. Further, it is also referred to as a Just in Time or Learn manufacturing system
(Christopher, 2016). This was developed based on the years of continuous improvement in
which order made by customers is delivering at quickest and in most effective way. TPS (Toyota
Production System) was established based on two concepts which are: “jidoka” (automation with
human touch) and “Just in Time” (Production to be made in continuous flow). In accordance
with jidoka, when any defective part is identified, then the machine that is affected gets
automatically stop. This is helpful enough to make sure that quality of products is maintained
(Fernie and Sparks, 2014). On the other hand, Just in Time aim at minimising the rate of waste
and unreasonable requirements of production line. The total time that is required by the business
to build the order of customers is low.
Infrastructure used by Toyota to manage delivery system
To obtain raw materials, Toyota does not process their own but they make use of third
party so that they are able to meet the requirement of customers. There are five stages involved
in supply chain of Toyota. In this context, it includes local part, import parts, receiving
dock/production, dealer and to customers (Govindan, Soleimani and Kannan, 2015). Cited firm
put on assembly system in the process and there are stores or warehouses in which the order is
placed. Demands for the side of customers are conveyed to firm, then they make production as
per requirement. It is important for the business to meet the need and it requires to have proper
2

support from the side of suppliers so that they are able to improve the performance level in
positive manner.
In order to manage quality, they make use of TPS that is helpful enough to eliminate the
waste and defects. Further, there is different type of roles and responsibilities that has to be
played by workers (Slack Brandon-Jones and Johnston, 2013). Cited firm make sure that all the
workers are aware of the roles that has to be played. Further, at the initial stage, they also convey
the set of goals and objective. This is helpful enough to develop path on which it can be attained.
Further, the workers who are hired in this process are also skilled enough to support the firm to
grow.
In spite of all these operation in supply chain, there are certain of issues that are faced by
Toyota. In this context, it includes problem in maintaining quality of services and meeting up the
demand of customers (Asgari, Nikbaksh and Hill, Farahani 2016 ). Main cause of issue is from
the side of supplier as the quality of product gets negatively affected when raw materials that are
delivered by them are not properly maintained. Further, it consists of changes that are take place
in relation with technology. On frequent basis, there are changes identified in respect with
technology and this is a type of issue due to which cost increase (Brandenburg and Seuring,
2014). When machineries are update or new are used, then it helps the business to deliver better
and high quality services to customers. Another issue that are faced in relation with this is of
training to workers. Employees need to have proper understanding for making use of the new or
updated technology. They are the one who have direct interaction with customers ( Yue, You
and Snyder, 2014). When they fail to perform with their full efficiency, then it has negative
impact over the business. In addition to this, the rate of cost also increases due to which it
becomes difficult for Toyota to manage their work in effective manner. Further, there are
changes identified in the preference of customers (Jacobs, Yu and Chavez, 2016). People prefer
to make use of the services that are delivered to them with high quality. When firm do not make
changes as per the requirement of customers, then it has negative impact over the business. They
fail to get proper support from the side of management in effective manner (Brown and Segrist,
2017).
3 Different theories that are used in the Total quality management by the Toyota
Total quality management is the process by which organisation can enhance their quality
of products, services, operation and production in order to attain high level of performance so
3

that they can meet up the customer's expectation, needs, wants and desires. There are different
ways, techniques, approach, models used by the organisation in order to maintain and uplift the
quality of products and services (Wisner and Leong, 2014).. When it is concerned about the
Toyota, they are the king of total quality management. Toyota Motors is the tenth most
important company in the world according to Fortune Global 500 and one of the few companies
on the list to directly address TQM. They have received the various prestigious awards for
quality management, including the Deeming Application Prize in 1965 and the Japan Quality
Control Award in 1970. Different models and theories used by the venture, are as follows:
Lean production system
Lean manufacturing system is the assembly line method which is being developed by the
Toyota in order to manufacture the auto mobiles. This system is also known as Toyota
production system. There are different principle that are being made on the lean manufacturing
but their key focus was to reduce the waste of material, empowering employees, reduced
inventory and improved productivity with the better quality (Stadtler, 2015). They do not focus
on the requirement of the inventory that are needed in the future instead they used to procure the
raw material according to the orders received by the customers or their clients. They have
maintained good relationship with their partners that are suppliers in order to ask inventory from
them, when the company requires. This is the way by which they have called as the made by
order organisation. They used to maximise the use of multi-skilled employees, the venture have
flattened their structure of the venture and utilisation of the resources in the flexible manner.
This is the reason they are able to make the changes in very fast manner and able to respond the
demand of people in more fast as compare to their competitors (Conley, 2017). There are several
advantages of using this production system, that are it helps in Eliminate waste, Maximize flow
of resources, Minimize inventory, Pull the production from the demand of customer, able to
meet the needs and wants of the target market, do all the right things at the right time and right
place, empower the employees, able to make the rapid changeover, effective partnership with the
suppliers, able to make the environment of continuous improvement (Schaltegge and Burritt,
2014).
Just in time manufacturing
4

It is another very effective strategy of total quality management by which management
can able to maintain and enhance the quality of their products and services in order to serve the
highest level of satisfaction to the customers. The key aim of this strategy or theory is to reduce
the flow time in the production system and able to response in well manner to their suppliers and
customers. Its origin and development was in Japan, largely in the 1960s and 1970s and
particularly at Toyota (Mangan and Lalwani, 2016). With the help of effective planning,
strategies and policies the effective decision can be taken by the organisation related to their
inventory they can able to manage and utilise their resources in very effective and efficient
manner. Other than that they need to manage the different people in the organisation when
demand for the products is higher. The company also been responsible to manage down their
relationship with different people who are essentially vital for them such as suppliers and
customers. Other than that they also need to maintain good relationship with them, who helps
down company in each stage of work and made their business operations related to the
production successful. In this technique, company essentially coordinate time to time with
suppliers and inventory manager (GFox, 2017). By managing people in the organisation they can
able to conduct the all activities related to the production in the effective manner. The people to
the firm should be treats as assets to the organisation resources such as inventory so that they can
able to motivate employees and conduct the whole procedure in the effective manner. Thus,
Just-in-time inventory management is a cost-cutting inventory management strategy though it
can lead to stockouts (Csiernik and Rowe, 2017).
Kaizen approach
Kaizen is the Japanese term which means continuous improvement, it is also another
effective model which is being used by the venture in order to maintain and enhance the quality
of products and services so that customer can be attracted and their needs can be fulfilled in very
effective manner (Fayezi, 2017). Changes have been taken in the various aspects of the
management, but when it comes to the production, the management used different tool,
techniques and technologies in order to reduce the waste of inventory and enhance the qiality of
products and services
5

Recommendation
It can be recommend from the project report that organisation need to improve them in
several areas, from which operations, logistics and supply chain management is very important.
The areas where they need to improve, are as follows:
 The venture should adopt the new technology in their supply chain, production,
operations and logistics management so that they can able to use the different models of
total quality management in order to meet the needs, wants and expectation of the
customers.
 Other than that they need to maintain good relationship with the good suppliers so that
they can able to procure quality raw material. Inventory is the basic resources at which
quality of finished goods is dependent, thus they need to have proper quality of raw
material so that they can cater the needs and wants of customers.
 With that it is being known that customers are the king for organisation. Venture will
able to succeed when they cater the needs and wants of customers and serve them
maximum satisfaction. Toyota need to do effective market research by which they can
find the needs of customers and this will help them to attract and retain large customers.
 Other than that venture should use different total quality management techniques and
model of total quality management such as lean manufacturing, Kaizen approach etc.
CONCLUSION
It can be concluded from the project report that total quality management is very
important aspect for every organisation which is being applied in the different aspects of the
venture such as supply chain management, logistics, operations etc. the report have included the
three basic issues which is being faced by the Toyota in terms of total quality management. First
issue is related of technology, it has been founded that technology is flexible, it has very bad
impact over the venture. They need to adopt the new technology every time in order to gain
competitive advantages, this have enhanced their cost of production. Other than that customers
preferences are changing day by day, which creates hurdle in production. The third issue is
related to the supplier relationship and inventory, suppliers are not able to serve high quality
inventory. Solution of this three problem is effective total quality management. The venture
should use the different tool and techniques by which they can able to maintain their inventory,
6

procure quality raw material, customers communication and engagement, supplier relationship,
technology adoption etc. with the help of effective total quality management firm can able to
use new product and services, quality of the commodities, managing people of the organisation,
location and other factor etc. with that they will able to provide satisfactory services to the
employees and customers in order to earn competitive advantages.
7

REFERENCES
Asgari, A., E. Nikbaksh, A. and Hill, R. Farahani (2016) “Supply chain management1982–2015:
a review” IMA Journal of Management Mathematics, 27(1), pp. 353–379
Brandenburg, M. and Seuring, S., (2014). Quantitative models for sustainable supply chain
management: Developments and directions. European Journal of Operational Research.
233(2). pp.299-312.
Brown, D. L. and Segrist, D.J., (2017). Internalized Racial Oppression and Higher Education
Values: The Mediational Role of Academic Locus of Control Among College African
American Men and Women. Journal of Black Psychology. 43(4). pp.358-380.
Christopher, M., (2016). Logistics & supply chain management. Pearson UK.
Conley, C.L and et.al., (2017). Improving the Cultural Competency of Social Work Students
With a Social Privilege Activity. Journal of Teaching in Social Work. 37(3). pp.234-248.
Csiernik, R. and Rowe, W.S., (2017). Creating a Holistic Understanding of
Addiction. Responding to the Oppression of Addiction: Canadian Social Work
Perspectives.
Fayezi, S and et.al., (2017). Understanding and development of supply chain agility and
flexibility: A structured literature review. International Journal of Management Reviews.
19(4). pp.379-407.
Fernie, J. and Sparks, L., (2014). Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Fox, S and et.al., (2017), February. Imagining Intersectional Futures: Feminist approaches in
CSCW. In Companion of the 2017 ACM Conference on Computer Supported Cooperative
Work and Social Computing (pp. 387-393). ACM.
Govindan, K., Soleimani, H. and Kannan, D., (2015). Reverse logistics and closed-loop supply
chain: A comprehensive review to explore the future. European Journal of Operational
Research, 240(3), pp.603-626.
Jacobs, M.A., Yu, W. and Chavez, R. (2016), “The effect of internal communication and
employee satisfaction on supply chain integration”, International Journal of Production
Economics, 171, 60- 70.
8

Mangan, J. and Lalwani, C., (2016). Global logistics and supply chain management. John Wiley
& Sons.
Menon, S.T. (2012) "Human resource practices, supply chain performance, and wellbeing",
International Journal of Manpower, 33 (7), 769-785,
Rushton, A., Croucher, P. and Baker, P., (2014). The handbook of logistics and distribution
management: Understanding the supply chain. Kogan Page Publishers.
Saraph, J. V., Benson, P. G. and Schroeder, R.G. (1989) "An instrument for measuring the
critical factors of quality management." Decision sciences 20(4), 810-829.
Schaltegger, S. and Burritt, R., (2014). Measuring and managing sustainability performance of
supply chains: Review and sustainability supply chain management framework. Supply
Chain Management: An International Journal. 19(3). pp.232-241.
Slack, N. Brandon-Jones, A. and Johnston, R. (2013) Operations Management (7th Ed). Harlow:
Pearson Education Ltd.
Stadtler, H., (2015). Supply chain management: An overview. In Supply chain management and
advanced planning. Springer Berlin Heidelberg.
Wisner, J. D. and Leong, G. K., (2014). Principles of supply chain management: A balanced
approach. Cengage Learning.
Yue, D., You, F. and Snyder, S. W., (2014). Biomass-to-bioenergy and biofuel supply chain
optimization: overview, key issues and challenges. Computers & Chemical
Engineering, 66, pp.36-56.
9