Report: Operations Management Challenges in Toyota Automobile

This report provides a detailed analysis of the operational management practices within the Toyota automobile company. It begins with an executive summary highlighting the key challenges faced by operational managers, including changing technologies, globalization, customer expectations, job designs, and quality management. The report then delves into these challenges, examining their impact on Toyota's performance and the strategies employed to address them. The second part of the report focuses on specific operational areas within Toyota, such as supply chain design, inventory management, and work and facility design, illustrating how these elements contribute to the company's success. The report emphasizes the importance of adapting to changing market dynamics and technological advancements to maintain a competitive edge in the automobile industry. It also highlights the significance of customer satisfaction, production efficiency, and employee productivity in achieving sustainable growth. The analysis includes discussions on smart objectives, sustainable planning, and the application of operational management principles in the context of Toyota's global operations.

Operations Management
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Running Head: Report
Executive Summary
This report outlines the key challenges faced by the operational managers and how they are
contributing in the success of the automobile industry. This report focuses on the Toyota
automobile manufacturer to understand the concept of the operational management. However , in
this report, all the areas of operations are discussed with the perspective of the future. The main
findings of the report outline the customer, satisfaction, production efficiency and productivity of
the employees and how to gain the competitive advantages. The operations management areas
are applied in the company and the possible results are discussed. This report also focuses Ion
the different smart objectives and sustainable planning such as flexibility, adaptability,
measurable approaches, realistic and time bound.
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Contents
1. Introduction.........................................................................................................................................3
2. Key Challenges to Operations Managers.............................................................................................4
2.1. Changing Technologies...............................................................................................................4
2.2. Continued Globalization of Markets............................................................................................5
2.3. Changing Customer Expectations................................................................................................6
2.4. Changing Job Designs.................................................................................................................6
2.5. Quality Management...................................................................................................................6
2.6. Global Manufacturing..................................................................................................................8
3. Operations Management Areas of the Toyata......................................................................................8
3.1. Supply Chain Design...................................................................................................................8
Supply chain risk...............................................................................................................................10
3.2. Inventory management..............................................................................................................11
Critical Success factor...............................................................................................................................12
3.3. Work and facility design............................................................................................................13
Conclusion.................................................................................................................................................15
References.................................................................................................................................................17
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1. Introduction
Operational management is defined as the art and science of producing the goods and services
and deliver these goods and services to the customers. The operations management areas involve
the different operations such as quality management, supply chain management, production
processes and customer services. There are many challenges that are faced by the organizations
and various success factors in the businesses. This report carried out to analyze the automobile
industry by taking the company Toyota for the research. This report covers the impact of the
operational management or decisions on the performance of the Toyota company. There are
many factors that are explained such as change in technology, managerial methods and the
operational research on the basis of the automobile industry. This research also describes the
impact of the operations on the customer satisfaction and efficiency of the company. The main
purpose of the report is the deep analysis of the challenges faced by the Toyota company and
their critical success factors for the Toyota with respective to the future. There are two parts in
this report. First part demonstrates the challenges faced by the companies like changing
technologies, globalization, change in the expectations of the company, change in the job
designs, global manufacturing and quality management. The second part of the report covers the
different areas of the operational management for the better understanding of the success of the
automobile industry(Braese, 2003).
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2. Key Challenges to Operations Managers
The different key challenges from the different factors are going to be explained in order to
understand their effect on the success of the business in future. The challenges of the Toyota
company are :
2.1. Changing Technologies
In the modern world, the technologies are changing very rapidly and this change in the
technology is the opportunity as well as a threat to the automobile industry. The Toyota company
has gained the good position in the competitive world by offering innovative car designs also
competing with the various other companies like Honda, Maruti Sazuki, Volkeswagon, Nissan,
Audi and Scoda. The Toyota companies used the latest technologies in order to compete in the
automobile industry. Toyota is the UK based automobile company dealing with the
manufacturing of automobiles. The company is focused on continuous improvement through
these latest technologies for the long term. The Toyota company became the world’s largest top
ten manufacturers of the cars and other vehicles. The Toyota is focusing on the latest
technologies in order to gain the market share. There are many companies who are investing a
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large amount of the money on the research and development of the latest technologies in order to
bring that technology in the company for the future success. If the Toyota company will not
adopt the latest technology while manufacturing and designing the cars, then the company will
face the huge losses(IBM, 2007).
2.2. Continued Globalization of Markets
The businessmen are trying to find different ways to create a unique selling proposition over
other competitors to make the consumers prefer their services over other competitors in the
market. This change has been seen in all the top organizations and if we have a look at the stats,
the economy has been improved a lot due to growth of global markets. So, to stay in the market,
every day a new strategy is established by the financier to retain its position in the market.
Globalization provides a great opportunity to the companies for the expansion of the business in
the international markets(Leskova, 2012). The reason of the entering into the global markets is to
reduce the cost resource sharing and by grasping the more business opportunities in the future.
Toyota expanded its business in various countries and investing money to enter into those
markets who have the high market potential growth.The company already invested its money in
the Southern US, Ontario, Ottawa and Indian global markets just to gain the maximum profits.
The challenge connected with the globalization is that the competition for the Toyota company
become high because of the market are dominated by the other competitors too that affects the
profitability of the firm.
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2.3. Changing Customer Expectations
The changing customer expectations are also a challenging factor. Customer’s expectations are
always high because the Toyota already set a benchmark for the quality products. The customer
of Toyota expects fro the company more quality of the automobiles with more features, design ,
new technology and the reasonable prices. The Automobile industry tends to increase share in
the market, revenue growth, more customers and less number of complaints. The customers are
very peculiar about choosing the vehicle for the own satisfaction. The companies adopt various
strategies to meet the expectations and demands of the customers. The most difficult part of the
automobile industry is to understand the market needs of the customers as the Toyota company is
not focusing only on one customer, they are targeting the millions of customers. However, the
company needs to build strategies to meet the customer standards by introducing new car designs
and quality productivity(Leškova & Kováčova, 2012).
2.4. Changing Job Designs
The change in the job designs has the direct relation with the improvement of the employee
performance. The flexible working hours leads to improve the productivity of the employees. It
is very important to retain the employees in the automobile industries by designing the job
working hours in the organization. Job design could be obtained through job rotation,
simplification, enlargement, enrichment and flexible working hours. It is very important to meet
the employee expectations and needs too for the quality work and the strategies should be
implemented by the Toyota company in order to make their employees satisfied.
2.5. Quality Management
Toyota is the automobile company that is famous for its high quality of vehicles across all over
the world. The quality control is the main aim of the company because it is directly related to the
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customer satisfaction. The customer satisfaction in end is the main focus of the every company
and this will result in the building of the brand image and company earns maximum profits
because of its quality. The Toyota company is not producing the same products as there are
many models of the cars that introduced by the Toyota company such as Innova, Fortuner, Etios
etc. Toyota always follow the Kaizen, which stands for the continuous improvement by
understanding the needs and expectations of the customers for the future period of time. The
company mainly focuses on those strategies that aims at increasing the quality of the vehicles,
efficiency of the company and reducing the cost of the manufacturing. The strength of the
company is its brand name as the every person in this world is familiar with the Toyota and its
products. It is very significant to maintain the highest quality of the products and launch them in
the market by keeping in mind about the needs of the customers at the affordable prices.
However, the Toyota Company focuses on the quality theories and initiated manufacturing
keeping in mind all the factors of quality control. Total quality management is the collective
effort made by the top management and the employees who are responsible for formulating the
strategies to manufacture the highest quality automobiles, which meet the level of customer
satisfaction(OSAT, 2012).
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2.6. Global Manufacturing
Toyota has its manufacturing plants in various countries like US,Canada, India and China. It has
been analyzed the 50% of the cars are manufactured in the United states and 50% in the Ontario,
Canada. The company set up offices in the different areas in the UK airport free zone, in order of
which sales have been increased in double profits in the last few years. It is the only general
decision to open a regional office in the UK, which is experiencing instant economic growth
along with the London. The Canadian plants producing the millions of cars and introduce them
into the global markets. The Toyota company established its manufacturing plant in the
Melbourne too and other various places. The global manufacturing helps in improving the supply
chain of the organization. Global manufacturing challenges for the Toyota company are
innovation, education and training, manufacturing excellence, information technology, and clean
manufacturing. The manufacturing plants at the different places needs more resources, capital
that adds cost to the automobile company. The management of the huge number of the
manufacturing plants becomes difficult for the organizations.
3. Operations Management Areas of the Toyata
This is the second part of the report that focusing on the operational areas of the business that
influence the success of the organization. The different areas of the Toyota company are supply
chain, inventory management and work design that contribute to the success of the business.
3.1. Supply Chain Design
The Supply chain is the system that focuses on the process of the movement of the raw
materials to the production houses and then deliver the final products to the customers. There are
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many people involved in the supply chain, including, suppliers, distributors, manufacturers, and
retailers make that product available for the consumers. All these people come together with a
purpose to convert the raw material into the final products and delivery of these products to the
customers. The below given figure shows the supply chain process of the Toyota. The supply
chain of Toyota involves the collection of the parts of the automobiles from the different
suppliers and the consolidate those parts to deliver them to the different vendors(Cassivi, et al.,
2000).
This is the most challenging task to manage the supply chain in the organizations and these main
activities involved in the transformation of the goods from the raw materials to the final products
consumed by the customers. The process of the creation of the products and customer’s
consumption of these products. Looking into the previous years and the last 3 years industry
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reports, it has been observed that the globalization has a great impact on the supply chains. There
are no such restrictions on the trade of the products and services in certain areas. Talking about
the automobile industry,then the Toyota company in today’s world makes use of the latest
technologies inthe supply chains. In the past years, the activities like planning, manufacturing
and retailing etc. are done by the industries itself. But now the industries are using the different
kind of softwaresto manage the supply chain(Dinesh, 2015). Toyota company has more than the
3000 suppliers in the different countries in the world and the supply chain model of Toyota
company is greatly influenced by the fairness and win win situation. The Toyota company has
the clear and transparent policies of the supply chain management.
Supply chain risk
There are many risks involved in the supply chain management andthe industries build many
strategies to integrate all the activities and this is the best way tomanage the supply chain. The
automobile industry is chosen for the analysis and to understand thedifferent challenges faced by
the industry. The automobile industry is the sector which is growingrapidly and every country is
contributing to this automobile industry. The automobile industry has many companies like
Honda, Maruti Sazuki, Nissan, Ford, Volkswagon and Audi, etc.The role played by the supply
chain management is very significant for the success of the automobile industry(Deloitte, 2013).
In the developing economies, there are many other environmental factors that affect the
sustainable business like transportation of the stocks from one place to another and these factors
are like pollution, poverty, and natural resource depletion. As the automobile companies are
highly linked with the transportation sector. The population of the countries is increasing very
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fast and it will obviously create more pollution from the automobiles and also the increase in the
usage ofvehicles bring the road networks jams because of traffic. These traffic jams and
pollution affectthe business by the creating negativity in the customer mind and delay in the
stock delivery. Moving further, the other environmental factorslike weather during the season of
Monsoon that creates problems for the automotive industry todeliver the goods in a safe manner
and on time. As the automobile industry is very famous and withthe increase in the population,
more and more clients availed these services and products offered by the different companies
like Honda, Volkswagon, Audi, Nissan and Maruti sazuki. The Automobile industry is facing
challengesnow in building the strategies to deal with the increasing clientele, environmental
factors,diseases and expectations of the customers(Suthikarnnarunai, 2008).
3.2. Inventory management
The models of the inventory management are very helpful to find out the quantity ofthe stock
that is transported to the retail stores at least two times a week. As the stock of the cars, bikes and
other automobiles in the automobile industry is very limited and it is verysignificant to identify
that each retail store of the automobile is getting the stock as per their needs.The workers and the
staff members, who are responsible for the management of the stock andtheir quantity of their
automobile industries outlets.
The inventory management is important as the inventories are the assets of the company and
used by the firm. Inventories are acting as the resource for the company as well as cost to the
company. However, it is very important to have the economic orders of the quantity level. The
process of inventory management includes planning, coordinating and controlling, storing,
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