Operations Management, Logistics and Supply Chain Management in Toyota

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Understanding Operations,
Logistics and Supply Chain
Management

TABLE OF CONTENTS
Introduction to Operations Management, logistics, and supply chain management.......................1
Introduction to the company and introducing the two chosen topics..............................................2
First choice of topic and corresponding theories/concepts..............................................................3
Managing Quality........................................................................................................................3
Second choice of corresponding theories/concepts.........................................................................5
Managing people in operations and supply chain management..................................................5
Triple bottom line............................................................................................................................7
Recommendations............................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
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Introduction to Operations Management, logistics, and supply chain
management
Operations management is considered as the most crucial area of business that concentrates over
production of products and services. The process ensures that business is being operated in an
effective manner while making use of required resources such that customers’ expectations are
fulfilled effectively. It is largely concerned with management of process that is utilised for
transforming input into output for the development of final goods. In addition to this, logistics
management forms the crucial part of supply chain management that is implemented within the
business organization for implementing and controlling the flow of storage of products in such a
way that customers’ requirement can be met (Bromiley and Rau, 2016). Supply chain
management on the other hand includes broader range of activities that are essentially required
for planning, controlling and execution of flow of product that ranges from acquisition of flow of
raw goods to its distribution to consumers in the market. With the help of supply chain
management, business organizations are able to cut down their excess cost and can also deliver
final product to consumers in faster manner.
The following essay will therefore provide detailed understanding regarding operations
management, logistics and supply chain management in context to automobile manufacturer in
UK.
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Introduction to the company and introducing the two chosen topics
Toyota is an automotive manufacturer and is ranked at 6th position in terms of revenue
generation. Within UK, it is largely responsible for sales, after sales, marketing as well as
customer relationship for both Toyota and Lexus. It employees approximately 400 number of
employees and serves areas that includes United Kingdom, Malta, and Northern Ireland. Its
parent organization is Toyota Motor Corporation (Toyota, 2019). The organization is well known
for its continuous innovation based on customer needs and market expansion. With its innovation
along with improved quality as compared to its competitors in the market, Toyota has successful
expanded its business worldwide and therefore it serves its customers in 170 countries along with
manufacturing facilities in 28 countries.
The essay introduces topic based on Quality Management as well as Management of the people
in operations and supply chain. Quality Management can be defined as the process of
undertaking various activities for maintaining expected excellence level. It includes
identification of appropriate quality policies such that quality planning, assurance, and
controlling can be implemented in an effective manner. Toyota is ranked top amongst market
leaders that directly addresses TQM which is based on its policy of customer first. Management
of people includes support provided by the organization to its employees so that desired level of
output can be attained (D.B., 2013). Toyota is well known for “total participation” policy that
focuses on collecting input from employees so that processes related to operation and supply
chain can be implemented in more effective manner.
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First choice of topic and corresponding theories/concepts
Managing Quality
The process of quality management within the organization ensures that all the products, services
and business outcomes are consistent. It includes number of components such as quality
planning, quality control, quality improvement and quality assurance. Management of quality not
only aims at overall quality of final product or services but it largely focuses on ways on how the
quality can be made consistent throughout the business process. Considering the case of Toyota,
Quality management is implemented to improve the process, prevention of defects, prioritizing
efforts, development of cause relationships, quality measurement, as well as customer
satisfaction (Ross, 2017). Operations manager plays crucial role in making decisions related to
quality management framework while satisfying and identifying needs of customers. Toyota
faced issues related to overproduction and increase waste while manufacturing automobiles that
largely influenced the reputation and overall productivity of the organization.
Considering the issues faced by Toyota, Total Quality Management was considered as one of
the most vital approach that is based on continual improvement for identifying the errors within
the process of supply chain. Based on the theory, the organization focuses on customers,
continuous improvement as well as total participation or employee engagement. The
organization realized that customer satisfaction is an important essence while improving the
overall quality. Inspite of restricting quality improvement to improving the quality of product or
after sales service, Toyota aimed at transforming the workplace environment to the place of
pleasure and enjoyment such that employees can contribute largely to the satisfaction of
customer. In other words it can be said that workplace environment and contribution of
employees is important for attaining desired level of customer satisfaction.
Continuous Improvement is also referred to as lean management or lean Kaizen where
managers of the organization need to focus on implementing and understanding improvement
activities that are effective in shaping the corporate culture. This puts positive impact over
improving morale and motivation of employees and this way they acquire sense of achievement
towards improving the current business activities. Toyota has shown several evidences of
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continuous improvement and there it has been identified that workers of the organization are
highly competitive as they always shows signs of learning, solving problems and adapting to
new situation and strategies (Process Improvement Japan and Australia, 2019). Their main focus
is their passion and growth. Lean management for Toyota is therefore key to minimise cost,
engaging employees and total quality management.
Total participation is also referred to as employee engagement in various activities. This is also
considered as a workforce management strategy that supports developing corporate culture in
terms of co operation along with respect for individuals. Toyota gained the advantage of total
participation by engaging employees through their strengths and skills. This has fostered the
teamwork while creating a sense of common values, common awareness and common mission.
In this regard, two important factors include leadership and open communication among team
members.
In addition to this, other concepts like benchmarking also supports total quality management
that further helps the business to select products, services and cost for depicting the appropriate
performance. In context to Toyota, it has chosen the most appropriate technology for improving
the overall quality of its final products can be improved. This will further result into increasing
customer satisfaction (Ylänen, J., 2017)
However there are certain factors such as lack of responsiveness that has put negative impact
over after sales services to some extent. Management of the organization was unable to monitor
the overall performance and therefore customers demand was not met in an effective manner.
Toyota therefore must focus on measuring the performance based on the process of
benchmarking that involves the process of reducing manufacturing time per unit, cost per unit,
and return on investment as well as consumer satisfaction rate. For an instance, the Toyota has
higher focus over initiating new facilities with the advancement of technology has helped the
business to manage logistics and supply chain in an effective manner.
In addition to this, standardization is another initiative that has been taken by Toyota to assure
quality. This has been carried out within the organization improving the communication facilities
in terms of technical criteria as well as agreed performance and safety parameters. The process
also applies towards raw materials, sampling methods, testing along with processes. Institution
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learning is another technique that ensures quality of the business processes. Training process is
aligned with the business needs so that skills and knowledge of employees can be improved.
Toyota organizes workshops, and also makes use of evaluation material for enhancing the
knowledge of its employees on how to effectively implement the operational process as well as
logistics and supply chain.
Second choice of corresponding theories/concepts
Managing people in operations and supply chain management of people plays an important role
in appropriate operation of logistics and supply chain management. Management of people is one
of important aspect of human resource management with the organization. Toyota effectively
make use of concept known as employee resourcing or labour planning that aims at predicting
the supply and demand of human resources as well as assessment of gaps and to ensure that
organization is equipped with right talent. It has higher focus over employing people with
adequate skills and behaviour according to the benefits of the organization however managers of
the organization prefer to select candidates with the behaviour and skills as their own (Taylor
et.al.2015). Several organizations face issues related to flexibility, creativity and innovation and
in this regard Toyota has adopted the usual methods of selection such that employees get
equipped with lean product development as well as management principles. Toyota is able to
gain competitive advantage by identifying the required number of employees to carry out the
specific project.
In addition to this, the organization also experienced increasing turnover issues however the
issues were resolved by identifying the main causes and by developing the strategies
accordingly. In this context, Toyota largely pays attention on improving the reward systems as
well as by adopting the approaches of employee engagement for increasing the concentration of
employees towards practices of operations management. Labour planning also assists HR team
to determine the gaps in the existing workforce that hampers the business growth. This is to
make sure that Toyota has adequate workforce for fulfilling the needs of supply chain and
logistics standard by employing appropriate skills at right time. Workforce planning will also
allow the business to study annual business plan so that new strategies and workplace structuring
can be developed accordingly.
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Job Design is another important aspect that supports managing people within operations as well
as supply chain management (Oldham and Fried, 2016). This is the process that supports overall
structuring and designing of work while undertaking specific task within Toyota. Major
components of job design include job specialization, job expansion, Psychological components,
Self-directed teams as well as Incentive schemes & motivation. The organization upholds
number of departments for the manufacturing of vehicles and therefore it maintains the quality of
logistics and supply chain by assigning duties to the employees with specialized in their own
areas. In addition to this, cross functional quality teams are also encouraged within Toyota such
that various issues can be resolved in an effective manner. It encourages employees for feedback
so that processes related t supply chain management can be improved for future growth.
Incentive schemes also contribute towards the process of appropriate job designing which in turn
help the business to increase the employee motivation.
Toyota is well known for encouraging the team working by considering the each and every
individual as team member. The organization operates at a larger scale with wider range of
supply chain and logistics operations and therefore it is important for the business organization to
take care of employees with distinct competencies for improving team working and commitment
of individual employee. In this context, feedback and communication standards of the Toyota is
questioned many a times and therefore the organization must provide rights to employees to
express their thoughts about implementing corrective measures for aligning the process of supply
chain so that customer satisfaction and business output can be improved (Tortorella et.al.2019).
On the other hand, with the changing business environment, Toyota has exhibited trust in its
employees while involving tem into decision making and also assign them with challenging
responsibilities and this is motivating for them to find out the solution while working in a team.
The organization is currently experiencing allegations related to the quality issues in advanced
cars and the internal issues identified related to team working pressure. Toyota must therefore
focus on either restructuring of Toyota Production System or must split teams soon after the
purpose is being fulfilled for developing the sense of recognition among employees. Scientific
management is also important in improving the labor productivity as well as to gain control over
fulfilling the customer orders as well as production with the help of clearly communicated
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standards and guidelines (Waring, 2016). For an example, Toyota has higher focus over
adjusting technology and machineries for aligning supply chain management with the
performance of employee.
Triple bottom line
This is referred to as accounting framework that revolves around social, environmental as well as
finical benefits such that business organizations can evaluate their performance to derive higher
business value. Business organizations are mainly confined towards voluntary reporting of
environmental matters that is being represented in annual reports of the organizations. In addition
to this, automobile manufacturing industries has higher focus over sustainable development by
gathering ideas on how to make use of natural resources without exploiting them to greater
extent. In this regards, Triple Bottom Line approach is one the best approach to measure the
sustainability. The approach is effective in capturing the spectrum in terms of measuring the
success such as economic, environment and social growth.
In terms of social factors, Toyota has exhibited social degradation that focuses mainly on
developed economy. For an instance, customers within the developing economy might not be
able to buy luxurious cars manufactured by Toyota (Nick Dasco, 2012). However it provider
wider range of employment opportunities that contributes largely to the economic development
of the country. In addition to this, with the changing environment needs, Toyota concentrates
over manufacturing electric cars for saving the fuel for future generations. The organization has
gained tremendous recognition with the hybrid car ‘Prius’ which is less expensive and provide
quick charging facilities.
With the discussion above it can be said that Toyota is gaining success at the global level
however discharging social responsibility to greater level. It is important for the business to
maintain balance between procurement and environmental activities. With the increasing
population, increasing number of vehicles result into increasing pollution, therefore there is
greater need of developing hybrid cars for the emerging markets.
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Recommendations
By observing the issues and challenges faced by Toyota especially in terms of customer
satisfaction, inappropriate facilities related to supply chain management is identified in Toyota.
Therefore it is important to bring changes in current processes and facilities so that needs of
customers can be fulfilled in an effective manner. Toyota must focus on improving the
organizational culture with the emphasis on facilities like training and development as well as
support of managers such that employee engagement towards the assigned task can be improved.
In addition to this, Triple Bottom Line approach must be implemented to exhibit sustainable
behaviour so as to gain recognition in the market. With the help of higher recognition, even if the
business cost higher products of it products, then consumer might show their willingness to buy
without any hesitation. The organization must also undertake Six Sigma approach for eliminating
the errors within supply chain management as well as production units.
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Conclusion
By assessing the factual information regarding Toyota, it has been identified that logistics and
supply chain management plays an important role in overall growth of the organization. Issues
related to employee turnover, and sustainability issues have affected the consistency of
operations management as well as supply chain management which has lead to customer
dissatisfaction and organizational reputation in the market. In this context, it is important to
manage the quality and human resources for eliminating the issues related to automobile
manufacturing or gaining the benefits of raw materials in cost and time effective manner. Further
TBL is identified to be crucial for gaining recognition among consumers who are more inclined
towards environmental and social benefits.
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References
Books and Journals
Bromiley, P. and Rau, D., 2016. Operations management and the resource based view: Another
view. Journal of Operations Management, 41, pp.95-106.
Oldham, G.R. and Fried, Y., 2016. Job design research and theory: Past, present and
future. Organizational Behavior and Human Decision Processes, 136, pp.20-35.
Ross, J.E., 2017. Total quality management: Text, cases, and readings. Routledge.
Taylor, T., Doherty, A. and McGraw, P., 2015. Managing people in sport organizations: A
strategic human resource management perspective. Routledge.
Tortorella, G.L., Fogliatto, F.S., Mac Cawley Vergara, A., Luis Gonçalves Quelhas, O. and
Sawhney, R., 2019. Influence of team members’ characteristics on the sustainability of
continuous improvement initiatives. Total Quality Management & Business Excellence, pp.1-17.
Waring, S.P., 2016. Taylorism transformed: Scientific management theory since 1945. UNC
Press Books.
Ylänen, J., 2017. Continuous improvement in order delivery process of make-to-order products.
Online references
D.B., 2013 [Online] [Assessed through] < http://blog.bid-org.com/toyota-motors-the-king-of-
total-quality-management/>, [Assessed on 23rd August, 2019]
Process Improvement Japan and Australia, 2019 [Online] [Assessed through] <
http://www.process-improvement-japan.com/total-quality-management.html>, [Assessed on
23rd August, 2019]
Process Improvement Japan and Australia, 2019 [Online] [Assessed through] <
https://studylib.net/doc/8679976/corporate-sustainability--a-case-study-on-toyota-motor-co...>,
[Assessed on 23rd August, 2019]
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