Toyota's Operations Improvement Strategies: A Case Study

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INTRODUCTION TO BUSINESS
OPERATIONS AND SERVICES

Table of Contents
INTRODUCTION......................................................................................................................................................... 3
EXPLAIN THE OPERATIONS IMPROVEMENT STRATEGIES FOR TOYOTA.....................................4
TOOLS AND TECHNIQUES OF OPERATIONS IMPROVEMENT..............................................................5
OPERATIONAL STRATEGIES THAT CAN HELP FORD AND GM TO GAIN MARKET SHARE. .10
CONCLUSION............................................................................................................................................................. 14
REFERENCES............................................................................................................................................................ 15

INTRODUCTION
The assignment is based on the case study of the market share of Toyota, for and General
motors. The case study has shown that Toyota has somehow revamped the production and
manufacturing of cars and is not able to capture the market. Although it has the potential to
compete in the market with GM and Ford (Qualitydigest, 2014). The implementation of the
various competitive strategies and improvement strategies will help Toyota to get the
market share. The assignment will discuss the different improvement strategies for the
company. Along with this the other operational strategies will help GM and Ford to gain
market share from Toyota.

EXPLAIN THE OPERATIONS IMPROVEMENT STRATEGIES FOR TOYOTA
Background of the company: Toyota Motor Corporation is an automotive manufacturer
which is headquartered in Toyota City Japan. The company is a public limited company
founded in the year 1937 by Kiichiro Toyoda. The company is mainly dealing with the
automobile, luxury vehicles, commercial vehicles and engines (Krings and Hoppe, 2019).
The company serving worldwide and was the world’s first company which produce 10
million vehicles per year. The fabrication of Toyota vehicles is the largest in the world. The
vision of the company is to fulfil not only the customer’s needs but the needs of employees
and society as a whole. The cars manufactured by Toyota are the heavy and tough cars as
compared to other cars manufactured in the market.
Currently, 370870 employees are working in the company who strive to give the best to the
customers in the form of high tech facilitated cars. There are many competitors of Toyota
like Volkswagen, General Motors, and Renault-Nissan etc. due to high competition and
change in the taste and preference of the customers Toyota is losing its market share.
OPERATION STRATEGY OF TOYOTA: Currently the operating system of Toyota working
successfully but then also there are few strategies that are missing in the system which can
help the company to get back on the track. The following are the main strategies that are
being carried out by Toyota:
The production system in Toyota: The production system of Toyota is the heaviest and
the most systematic. This system includes the designing of the vehicles which fulfils the
customers need and preferences. The production system provides full safety to the
employees is taken into consideration. Not only this is the environmental factor also taken
into consideration by the company (Qualitydigest, 2014).
Hybrid vehicles: Toyota is producing the hybrid vehicles to compete in the market these
hybrid vehicles of Toyota is saving the fuel reducing the emission and charging the
batteries without being plugged in.

Employee Satisfaction: Toyota is giving a high focus on the employees are the assets for
the company. The employees are the one who is lining up the manufacturing and sales with
the mission and vision of the company (Callahan and Roberts, 2017). Toyota strives to give
high job satisfaction to the employees in every possible manner by providing healthy wok
condition, proper salaries and wages, increment, bonus etc. are given to the employees to
retain and to give them job satisfaction.
The above strategies are being applied in the operation of Toyota still there are many
things which are lacking in the improvement of the company (Qualitydigest, 2014). The
following are some improvement strategies including tools and technique of improvement
which can be used by Toyota to get back on track:
TOOLS AND TECHNIQUES OF OPERATIONS IMPROVEMENT
Defining business process: To improve the business and capture the market share, it is
important to define the business and manufacturing process very sharply and with
accuracy. This will help the employees to understand what exactly is required to do
(Callahan and Roberts, 2017). The employees can valuably contribute to the whole process.
Focus on customer experience: For capturing the market and again become in the lead it
is important for Toyota to focus on the need of the customer by doing a research on what
sort of features and facilities the customers are looking for in a car The level of competition,
customer preference, technologies, training and development to the employees so that they
can give best in the whole manufacturing process (Krings and Hoppe, 2019).
Total Quality Management
Toyota is well known for its quality the company has won many awards for its quality and
technology. It’s time for the company to bring advancement in the quality and
manufacturing process so that it can become additional and valuable (Qualitydigest, 2014).
Total Quality Management will help the company to keep a close check on the quality
systems of the company, this will help the company to get higher results and productivity
will be improved by the elimination of the unwanted procedures. Following are the key

points of total quality management through which Toyota improve its business operations
companywide:
 Toyota Company includes all the parts of the business organization
 Toyota Company includes all the staff of the business organization.
 The company considers all the cost whether it is direct or indirect
 The company assesses and includes every opportunity that comes to get things
complete and effective.
 The company includes all the system and process that affect business quality and
standards.
 Business never stops in improving which ultimate increase in business quality.
TQM is a very effective tool to improve business companywide as it includes all the process,
parts, employees of the business organization as well as it considers all the cost that to
manage business quality.
Process & Product Design
It is a very effective activity adopted by the Toyota Company to improve business products
and services. Toyota Company effectively focuses on introducing new product vehicle now
and then because launching new products ultimately gain the attention of the customers
which works as a marketing strategy for the business company (Terninko, 2018). The main
purpose of the business to keep improving its business activity so that it can effectively
satisfy customer needs. The process and product design strategy consider as operation
improvement strategy because the strategy itself is a transformation process.
Reduction in response time
It is very much important for Toyota to reduce the response time so that it can attract and
retain the customer in the market. The response time is not only limited to the customer
services but it has to do with the adoption of the new technology, implementing the new
technologies, the idea in the manufacturing process (Callahan and Roberts, 2017). The
rapid process of giving the response will help the company to capture the market share.

Improve resource productivity
The Company should focus on the improvement of the resources that are being used by the
company in the production and manufacturing process. On a larger scale, the company
should give improvement efforts on every process right from raw material to sales and
marketing. This will give an additional benefit to the company hence it will give a growth
opportunity to the company (Krings and Hoppe, 2019). Toyota is already an established
brand it does not require much marketing and advertisement but if it is done it will give a
revolutionary mark among the customer.
Project Management
A project refers to the activity of a process implemented by a business organization to
identify the improvement options of the business (Kerzner, 2017). Project management
refers to the activity of planning, implementing, controlling etc. which is required to
complete the project and present outcome to the intended audience. Project management
considers as one of the best tool and technique for operations improvement because it
allows the business to test its planning or future move on a small scale. For example,
Toyota thinking about launching hybrid vehicles to improve company's product category
for which company initiates a project to identify the responses of the target customers to
assess whether the idea of the company is effective or not.
Project management controls the risk very effectively as through project management
company test its plan on a small scale which saves a lot of money of the business
organization if the planning of the business fails and provide the idea of improvements of
business operations (Kerzner, 2017). Through project management, Toyota company also
assess the ways through which what public likely to have in their products by launching
their newly created product and getting few feedbacks from the customers.
Supply Chain Management
Supply chain management is one of the 4 key activities of business operations through
which business manages and improves its supply chain. The supply chain of business
organization is responsible to deliver products on time and provide effective satisfaction to

their customers (Hugos, 2018The ultimate aim of the supply chain management is to
establish an effective relationship with various level of business management such as
inventory management, sales management to satisfy the demand of the customers and
increase the profit of all the parties in the chain process. Toyota has faced the challenge of
the quality problem which can be effective improve through supply chain management
which interconnected with all the levels of management.
Cause and Effect Analysis
It is a great tool to identify reasons for the weak areas of business or the loss of business
having with its activity. Through cause and effect analysis business can identify the reason
for the failure or problem and assess the effect on the business activity by the problem or
failure. In our case, Toyota Company faces a reduction in its market share because of the
quality issues of its products and services which is the problem in our case (Cateni et al.,
2018). The poor quality of products and services are caused by some business activity
which can be identified through cause and effect analysis and also that shows the effect put
by the poor quality of the products and services of Toyota Company which is a reduction in
the market share as well.
It is a great tool to improve business operations because after identifying the issues or
bottom of the problem the company effectively works and rectify the poor business activity
which caused the poor quality of products and services.
Lean Operations & Just In Time (JIT)
Lean operations & JIT is one of the best tool and techniques used by the Toyota company to
improve its business operations as it focuses on the eliminating all the waste of the
business organization in order to produce an operation that is quick and more durable than
before as well as produces best quality products and services at lower cost (Negrão et al
2017). The key element of the lean operations and JIT is it helps the business to
manufacture best products and the cost of the operation is considerably low because of
removing all the waste of the business which increases business efficiency.

Lean operations and JIT is based on Toyota Production System (TPS) which is used in
manufacturing system at world level which focuses on delivering the utmost level of
customer satisfaction by providing improved safety, quality, delivery and cost of the
product and services (Pinto et al., 2018.). Following are the lean manufacturing tools
through which Toyota Company can improve its business operations:
Kaizen: Continuous Improvement
It is a tool of lean manufacturing that focuses on improving business quality, productivity,
safety as well as the culture of the workplace. The technique focuses on implementing
small changes as small changes often result in major improvements (Pinto et al., 2018).
Kaizen refers to the process of continuous improvement of all the functions of business
organization including all the individuals of the business from CEO to lower workers.
Kanban System
Kanban is another tool of lean operations which focuses on reduces the idle time of the
production process. It monitors and controls the supply chain of the business organization
to identifying saving of cost by applying the just-in-time inventory monitoring control
system (Negrão et al., 2017).
The above are few improvement strategies which the company should try to implement in
order to get back into the lead and capture the market share. These improvement
strategies will help the company to get structured and better in the long run by giving
competition to Ford and General Motors.

OPERATIONAL STRATEGIES THAT CAN HELP FORD AND GM TO GAIN
MARKET SHARE
After the reduction in the popularity of the Toyota Company because of the quality issues,
Ford and GM got the opportunity to grab market share from Toyota and increase their
potential market (Bocken et al., 2016). Following are the business operations strategies
which can be used by the Ford and GM Company to grab market share from the Toyota
Company:
Process and Product Design
It is a very effective technique to increase business market share or grab market share of
other organization because nowadays consumers are hardly loyal to any business
organization because they always looking for an innovative and unique process or product
design that looks attractive and satisfies their needs (Terninko, 2018). Ford and GM
Company use the process and product design technique to innovate their products and
services design to attract customers and grab market share and make customers loyal to
the brand. The strategy is used for the product, services as well as for processes as well
which makes the entire business activity innovative and creative (Bocken et al., 2016).
Figure: Stages of Process and Product Design
Source: Bocken et al., 2016
The strategy consists of five stages namely concept generation, concept screening,
preliminary design, evaluation and improvement and prototyping & final design.

Concept Generation: it is the first stage of the process and product design strategy in which
business general an idea of a new process or product design through marketing activities
where business can get feedback from customers, assess competitors and generate an idea,
receive suggestions from staff etc.
Concept Screening: it is the stage where the critical assessment of the idea can be done in
which important points are included such as how difficult is the process is, what
investment is required, is it worth it, what risks are attached with it.
Preliminary Design: it is the process of creating the initial design of the product and check
whether it fits with the concept or not.
Evaluation and Improvement: it is the fourth stage of the process and product design
strategy in which preliminary design is evaluated and checks its quality and effectiveness.
Prototyping and Final Design: Lastly the product or process is tested in various ways such
as through card models; computer simulations etc. to ensure the product meets all the
conditions of the concept and design.
Lean Operations and Just-In-Time
Lean operations focus on eliminating all the waste and creating value for the customers.
The operation focusing on providing the utmost level of customer satisfaction through
utilizing a minimum amount of resource which ultimately decreases the product cost that
makes the product affordable for most of the customers (Levinson, 2018). It is a very
effective strategy that can be adopted and implemented by GM and Ford companies to grab
market share because providing the greatest level of satisfaction through business
products and services at affordable rates definitely attract customer which increase
business sales and market shares. The lean operation based on the five principles which
are:
 Assess the value of the product through customer's perspective because customer
defines the value of the product.

 Identify the waste and define methods of improvement as well as encompasses the
product durability through raw materials by disposal (Piercy and Rich, 2015).
 Create flow by eliminating all the functional barriers and assess the lead to improve
time.
 Lean operations focusing on pull system rather than push system to move with the
demand
 Lastly, continuous improvement is the key to improve quality, reduce cost and gain
competitive advantage.
Total Quality Management
Total Quality Management (TQM) is also a very effective tool to improve existing business
activities and quality of business activities to provide the utmost level of customer
satisfaction which helps Ford and GM Company to attract customers and grab market share
of Toyota Company (Cleartax, 2018). The problem faced by the Toyota Company is an issue
of quality which causes a business to lose its customer and market share so to maintain the
quality should be the first task of the GM and Ford Company. It is a customer-oriented
process that focuses on continuous improvement of business activity. It is a process in
which management and employees of the business organization put lots of efforts to
ensure the long term consumer loyalty and satisfaction of customers (Psomas and Jaca,
2016). The strategy focuses on marketing through happy customers as one happy and a
satisfied customer brings 10 more through which Ford and GM Motors effectively increase
and grab business market share. There are 4 stages of TQM which are:
Planning stage: In this stage employees come up with queries and business problems which
needs to resolved to maintain the quality of the business and its activities. In this stage also
the root of the problem is also analyzed for which research and data collection are needed
to derive the solution.
Doing stage: it is the stage where the solution and planning are implemented to solve the
problems as well as the effectiveness and efficiency of the solution is also measured in this
stage to check whether the solution is effective or not (Psomas and Jaca, 2016).