Student No: 0117602

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QUESTION 1 USING THE SPECIFIC OPERATIONS PERFORMANCE OBJECTIVES EXPLAIN WHY DO YOU THING TMC IS A WORLD-CLASS COMPANY?

company should be concerned to satisfy its customers requirements for fast and dependable services at reasonable price, as well as helping its own suppliers to improve services they offer. There are five basic performance objectives and they apply to all types of operation: Quality Speed Dependability Flexibility Cost (Slack, N. et al, 2001). These operations performance objectives are analysed here in accordance to TMC. 1) Doing things right by providing error free goods and services, which will satisfy the customers, is known as quality. According to the case study, Toyotas vehicles consistently rank near the top in third-party customer-satisfaction surveys. Being voted by many market research and surveys as the car of the year for several years it shows that, Toyota has a successful record worldwide. Because of the good quality Toyotas success kept going, where in 1995, Toyota was the best car in the Middle East. Also, TMC has produce a good quality cars that are quit and do not emit unpleasant fumes, such as more than 40 emission-control systems and dozens of technologies that have improved passenger-car safety (Ahmed, A., 2003, Coursework). An other performance objective is speed, which means by doing things fast, to minimise the time between the order and the availability of the product or service that gives the customer e speed advantage. The TMCs techniques are focussed operations that reduce complexity by using simple and small machines, which are robust and flexible. By rearranging layout and flow to enhance simplicity improves speed of production. On the coursework, statistics show that in the late 1980s, the output per worker was as much as two or three times higher than US or European plants. Third performance objective is dependability that means doing things in time for customers to receive their gods or services when they are promised. TMC includes Just-in-time (JIT) production system with multi skilled worker that work as a team, and with 'kanban control' has allowed them to deliver products as promised. Improving efficiency and quality is a concern not only of managers and technical experts but also of all employees. So, by doing this, TMC gives a dependability advantage to its customers.

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A clear result of responding to a dynamic environment is that organisation change their products and services and changes the way they do business. This performance objective is known as flexibility. (Peters, T., 1998) argues that we must learn to love change and develop flexible and responsive organizations to cope with the dynamic business environment. In the TMC plant it means the ability to adopt its manufacturing resources so that it can launch new models. The coursework analyses that, Toyota was able to achieve high level of flexibility, producing relatively small batches of different models with little or no loss of productivity or quality. TMC during the years has provided a range of options that customers are able to choose. One major operations objective, especially where companies compete with prices is cost. Low price is a universal attractive objective to customers, which can be achieved by producing goods at lower costs. In order to do things cheaply, TMC seek to influence the cost of goods and services, so for the future TMC has planed to shift their production of multipurpose vehicles and pick-up trucks on different countries around the world (e.g. Argentina, South Africa). Also, internally, cost performance is helped by good performance in the other performance objectives that TMC has managed to produce high quality vehicles at a reasonable prices.

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y using and improving quality, speed, dependability, flexibility and cost operations performance, TMC has seen a global growth and high percentage of customer satisfaction. Because of the success of these operation performance objectives Japanese style (Toyotaism) of manufacturing and product developments has come to be studied and emulated around the world (Coursework). TMC is world leader in supply chain management, and to keep its production at the high quality, maximum speed, on time delivery, flexibility and at the lowest cost TMC works with its suppliers to make sure that they are also the best suppliers in the industry. Shifting its operation in different countries searching for cheap inputs (row material and labour) makes it easier to produce products at a lower cost and good quality. Operating continentally also gives dependability advantage to its customers by making it easy to deliver its production in the market place. Using these operation performance objectives TMC has managed to keep its customers happy and compete successfully with others companies in global market. Analysing these characteristics it is safe to conclude that TMC is a world-class company. End of question 1

Student No: 0117602

BU 229

ASSESS THE EFFECTIVENESS OF TMC OPERATIONS STRATEGY?

1. Strategy is a number of decisions and actions that an organization uses to achieve its long-term goals. A strategy has its content and process (Slack, N. et al, 2001). Specific decisions which are taken to achieve specific objectives is known as content strategy and the procedure which is used within a business to formulate its business is known as process strategy. Companies around the world use different contents and processes. Companys objectives and successes are depends on choosing the right operation strategy. This assignment assesses the TMC strategy by describing its production system. It analyses TMCs success and critics by different authors and ends with a positive view. 2. According to the case study Toyota was one of the few car manufactures in the world that was consistently profitable following the oil crisis by 1974. This made competing manufactures to visit Toyota to discover the key to that companys success in a bad market. What they discovered was Japanese teamworking that uses scientific management principles (Huczynski, A., Buchanan, D., 2001). 3. Japanese teamworking is not the same as the teamworking that came to prominence in most Europe and American companies during 1960s and 1970s (MacDuffie, J.E., 1998, pp. 12). Toyotaism is another name used for Japanese teamworking that refers to a particular form of work organisation that stresses lean production. Lean production is an approach that combines just-in-time (JIT) production, work standardisation, continues incremental process improvement, problem solving teams and powerful first-line supervision (Huczynski, A., Buchanan, D., 2001). JIT (just-in-time) production system tries to meet demand instantaneously with prefect quality and no waste. It differs from traditional operations practices as it stresses waste elimination and fast throughput, both of which contribute to low inventories. Planning and control of many JIT techniques are directly concern with pull scheduling, kanban control, levelled scheduling, mixed-model scheduling and synchronization of flow (Slack, N., et al, 2001). 4. Toyota has played a big role in transforming Japan into one of the capitals of the automotive world. Also, Western companies that have adopted Toyotas production system have improved productivity and efficiency and a good example, which is mention on the coursework, is the joint venture (NUMMI). The 2000 IndustryWeek Census of manufactures (Coursework) shows that world-class plants have widely adopted just-in-time/continues-flow production and all methods that Toyota began developing 60 years ego. Moreover, analysis of IndustryWeeks Best Plants winners from 1991 to 2000 shows that the vast majority use lean-manufacturing practices extensively.

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5. In spite of its world-wide success, many critics have seen TMC methods pessimistically. Parker and Slaughter (1988) who studied a plant run jointly by Toyota and General Motors in California New United Motors Manufacturing Intercorparated (NUMMI) were critical of Japanese teamworking, describing it as part of an overall management package which they labelled management by stress. In their view, what appears to be participation is in fact a new form of exploitation. (Hill, S., 1991) In the event, while circles (TMCs production system) promoted minor operational improvements, they did little to change human relations and company culture. Circles had elaborate and inflexible formal procedures which were time consuming and cumbersome. Even in Japan the approach of JIT is not without its critics. Kamata wrote an autobiography description of life as an employee at a Toyota plant called Japan in the Passing Lane. His account speaks of the inhumanity and the unquestioning adherence of working under such a system (Slack, N. et al, 2001, pp. 489). 6. Despite these critics, the TMCs operation strategy has become a world-wide phenomenon and there are reliable reports from the number of firms of considerable cost saving and efficiency gains (Bradley, K. & Hill, 1994). TMC uses the bottom-up operations strategy, which is a process that emerges from day-to-day operational experience. Philosophers of this strategy continue to make the case that TMCs production system is a method of best practice and can be successfully implemented in different industries in any country. They argue that the ability to deliver just-in-time not only saves working capital (through reducing inventory levels) but also has a significant impact on the ability of an operation to improve its intrinsic efficiency. According to coursework Toyota has remained competitive, as it continues to improve its production system in spite of the rise in the value of the yen and economic recessions. JIT production system that TMC uses, not only has maximise profit and growth, but also Toyotas vehicles rank near the top of third-party customer satisfaction surveys. JIT production system has allowed TMC to have high reputation of being highly efficient and producing high quality cars and tracks.

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Word Count: 1,489

Bibliography and References

Peters, T. (1998). Thriving on Chaos MacDuffie, J.E., (1998). The Japanese auto transplants: challenges to conventional wisdom pp. 12 18 Huczynski, A., Buchanan, D., (2001). Organizational Behaviour

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Parker, M., Slaughter, J., (1988). Choosing Sides: Union and the Team Concept Womack, J.P., et al (1990). The Machine that Change the World: The Triumph of Lean Production Hill, S., (1991). Why quality circles failed but total quality management might succeed: British Journal of Industrial Relations, vol.29, no.4, pp.541-68 Bradley, K., Hill, S., (1983) After Japan: the quality circle transplant and productivity efficiency, British Journal of Industrial Relations, vol.21, pp.291311 Bradley, K. & Hill, (1994). In Clark, H., et al, (1994). Organisation and Identities Clark, H., et al Organisation and Identities, 1994 Slack, N., et al, (2001). Operations Management Hill, T., (1993). Manufacturing Strategy Lindberg, P., et al, (1998). International Manufacturing Strategies Durand, J. P., et al, (1999). Teamwork in the Automobile Industry: Radical Change or Passing Fashion

Chapter 2: The strategic role and objective of operation

Study guide
This chapter covers two areas, which although they seem separate at first, are in fact related. The first area is the strategic role of operations. This looks at how the operations function (or whatever else it may be called) in the business sees itself and its purpose. The second area looks at what we call performance objectives of operations. These are the specific aspects of performance on which the operations function is judged. In terms of our overall model of operations management (the one shown in Figure 2.1) the role of the operations function is important because it influences how operations managers understand their customers and translate their customers needs into performance objectives. In turn, the performance objectives (and especially the relative importance of each one) influence the overall operations strategy of the business.

Your learning objectives

This is what you should be able to do after reading Chapter 2, and working through this study guide. Identify the three roles of the operations function. Relate the role of the operations function to the contribution which operations makes to the competitiveness of the business. Identify the five sets of stakeholders which any operation has to consider. Understand the external and internal affects of the five operations performance objectives quality, speed, dependability, flexibility and cost.

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The role of the operations function

"The role of the operations function means something beyond its obvious responsibilities and tasks it means the underlying rationale of the function, the very reason that the function exists." The idea of role is important. As individuals we all play roles in our everyday life. Sometimes we are colleagues of other people on our course. At other times we are friends of the people we grew up with. At other times the children of our parents. Each is a different role. The important point is that we behave differently depending on which role we are in at any time. It is the same for the operations function. Depending on its role, it will behave differently. The chapter identifies three roles for operations management. They are not exclusive in the sense that an operation has to be one of them, but they all contribute to making up the way an operation behaves. The three roles are: The implementer of business strategy. The supporter of business strategy. The driver of business strategy.

Two things are important in understanding these roles. First, they are stated in order of difficulty and in order of importance. Implementing business strategy is a very basic responsibility for operations, supporting business strategy is what most operations should aspire to, but driving business strategy is only possible if the operation really does have unique capabilities. Second, they are cumulative in the sense that an operation cannot be a supporter of business strategy unless it has skills as an implementer, and cannot drive business strategy unless it has the skills to support the business strategy.

Judging the operations contribution

The model used in the book to describe the contribution of operations to competitiveness is one which has been well known for many years and was originally devised by Professor Hayes and Wheelwright at Harvard University. It is useful here because it can be adapted to incorporate the three roles of the operations function. Moving from Stage 1 to Stage 2 requires the ability to implement strategy. Moving from Stage 2 to Stage 3 requires the ability to support strategy. Moving from Stage 3 to Stage 4 requires the operation to drive strategy through its unique capabilities. Remember a number of points though when using this model. It is a conceptual model which allows organisations to think about how good their operations are. It is not a precise instrument for measuring operations excellence. Some parts of the business could be at different stages to other parts. So for example, an airport could have Stage 4 check-in facilities which use the most advanced information systems and have the most dedicated staff, while its baggage handling system is at Stage 2. The overall customer experience therefore might be very mixed (depending on whether their bags were lost or not).

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The real objective of this model is to show operations managers that they can be better (very few operations are at Stage 4) and to go some way in defining what really excellence in operations is (Stage 4).

Operations performance objectives

This first point made in this section of the chapter is that operations objectives are very broad. Operations management has an impact on the five broad categories of stakeholders in any organisation. Stakeholders is a broad term but is generally used to mean anybody who could have an interest in, or is affected by, the operation. The five groups are: Customers These are the most obvious people who will be affected by any business. What the chapter goes on to call the five operations performance objectives apply primarily to this group of people. Suppliers Operations can have a major impact on suppliers, both on how they prosper themselves, and on how effective they are at supplying the operation. Shareholders Clearly, the better an operation is at producing goods and services, the more likely the whole business is to prosper and shareholders will be one of the major beneficiaries of this. Employees Similarly, employees will be generally better off if the company is prosperous; if only because they are more likely to be employed in the future. However operations responsibilities to employees go far beyond this. It includes the general working conditions which are determined by the way the operation has been designed. Society Although often having no direct economic connection with the company, individuals and groups in society at large can be impacted by the way its operations managers behave. The most obvious example is in the environmental responsibility exhibited by operations managers.

After making this general point about operations objectives, the rest of the chapter goes on to look at the five performance objectives of quality, speed, dependability, flexibility, and cost.

Quality
Quality is placed first in our list of performance objectives because many authorities believe it to be the most important. Certainly more has been written about it than almost any other operations performance objective over the last twenty years. Later in the book we devote two whole chapters (Chapter 17 and Chapter 20) which look at different aspects of quality. As far as this introduction to the topic is concerned, quality is discussed largely in terms of it meaning conformance. That is, the most basic definition of quality is that a product or service is as it is supposed to be. In other words, it conforms to its specifications. There are two important points to remember when reading the section on quality as a performance objective. The external affect of good quality within in operations is that the customers who consume the operations products and services will have less (or nothing) to complain about. And if they have nothing to complain about they will (presumably) be happy with their products and services and are more likely to consume them again. This brings in more revenue for the company (or clients satisfaction in a not-for-profit organisation). Inside the operation quality has a different affect. If conformance quality is high in all the operations processes and activities very few mistakes will be being made. This generally means that cost is saved, dependability increases and (although it is not mentioned explicitly in the chapter) speed of response increases. This is because, if an operation is continually correcting mistakes, it finds it difficult to respond quickly to customers requests. See the figure below.

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Speed
Speed is a shorthand way of saying Speed of response. It means the time between an external or internal customer requesting a product or service, and them getting it. Again, there are internal and external affects. Externally speed is important because it helps to respond quickly to customers. Again, this is usually viewed positively by customers who will be more likely to return with more business. Sometimes also it is possible to charge higher prices when service is fast. The postal service in most countries and most transportation and delivery services charge more for faster delivery, for example. The internal affects of speed have much to do with cost reduction. The chapter identifies two areas where speed reduces cost (reducing inventories and reducing risks). The examples used are from manufacturing but the same thing applies to service operations. Usually, faster throughput of information (or customers) will mean reduced costs. So, for example, processing passengers quickly through the terminal gate at an airport can reduce the turn round time of the aircraft, thereby increasing its utilisation. What is not stressed in the chapter is the affect the fast throughput can have on dependability. This is best thought of the other way round, how is it possible to be on time when the speed of internal throughput within an operation is slow? When materials, or information, or customers hangs around in a system for long periods (slow throughput speed) there is more chance of them getting lost or damaged with a knock-on effect on dependability. See the figure below.

Dependability
Dependability means being on time. In other words, customers receive their products or services on time. In practice, although this definition sounds simple, it can be difficult to measure. What exactly is on time? Is it when the customer needed delivery of the product or service? Is it when they expected delivery? Is it when they were promised delivery? Is it when

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they were promised delivery the second time after it failed to be delivered the first time? Again, it has external and internal affects. Externally (no matter how it is defined) dependability is generally regarded by customers as a good thing. Certainly being late with delivery of goods and services can be a considerable irritation to customers. Especially with business customers, dependability is a particularly important criterion used to determine whether suppliers have their contracts renewed. So, again, the external affects of this performance objective are to increase the chances of customers returning with more business. Internally dependability has an affect on cost. The chapter identifies three ways in which costs are affected by saving time (and therefore money), by saving money directly, and by giving an organisation the stability which allows it to improve its efficiencies. What the chapter does not stress is that highly dependable systems can help increase speed performance. Once more, think about it the other way round how can an operation which is not dependable ever promise its customers fast response? See the figure below.

Flexibility
This is a more complex objective because we use the word flexibility to mean so many different things. The important point to remember is that flexibility always means being able to change the operation in some way. The chapter identifies some of the different types of flexibility (product/service flexibility, mix flexibility, volume flexibility, and delivery flexibility). It is important to understand the difference between these different types of flexibility, but it is more important to understand the affect flexibility can have on the operation. Guess what! There are external and internal affects. Externally the different types of flexibility allow an operation to fit its products and services to its customers in some way. Mix flexibility allows an operation to produce a wide variety of products and services for its customers to choose from. Product/service flexibility allows it develop new products and services incorporating new ideas which customers may find attractive. Volume and delivery flexibility allow the operation to adjust its output levels and its delivery procedures in order to cope with unexpected changes in how many products and services customers want, or when they want them, or where they want them. Once again, there are several internal affects associated with this performance objective. The chapter deals with the three most important, namely flexibility speeds up response, flexibility saves time (and therefore money), and flexibility helps maintain dependability. See the figure below.

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Cost
The chapter makes two important points here. The first is that the cost structure of different organisations can vary greatly. Note how the different categories of cost vary in the four examples given in the chapter. Second, and most importantly, the other four performance objectives all contribute, internally, to reducing cost. This has been one of the major revelations within operations management over the last twenty years. "If managed properly, high quality, high speed, high dependability and high flexibility can not only bring their own external rewards, they can also save the operation cost."

The polar representation of performance objectives

The chapter finishes with a useful way of illustrating the relative importance of the five performance objectives the polar diagram. It is particularly useful for illustrating the difference between different products or services. The chapter illustrates a taxi service and a bus service to show the differences between them. Of course, this is an extreme example, but within a single business different products and services can have very different profiles. In the study guide for the previous chapter we fully described the company Stagepoint. One of its founders, Richard Carleton, described how the company had two types of service, Hiring services - managed by the Technical Services operation. Producing production sets produced by Production Services.

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The polar diagram below illustrates the relative importance of each of the performance objectives for these two services. Technical Services which hires out equipment is, for some of its equipment, in a relatively competitive market and must keep its prices competitive, therefore cost is relatively important to it. So is dependability, failure to deliver a piece of equipment would have serious consequences for the customer. Occasionally also speed can be important. Quality means making sure that the equipment is in good working order every time it is sent out. Flexibility is relatively unimportant because customers know exactly what it required and if the equipment is not available there is nothing much that Stagepoint can do about it. Production Services, on the other hand, is in a less price sensitive market. Customers give Stagepoint the business primarily because of the high quality and flexibility they show in devising imaginative high quality sets. Speed is not always a major issue unless the clients are themselves late in their planning. Dependability, of course, has to be high because if the set was not finished on time the stage production or exhibition could not go ahead as planned.

The main point here is that the two types of service offered by the company have very different characteristics in terms of which performance objectives are important. Any company must understand how its different products and services require different objectives.

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