Faris Hajri Toyota

TOYOTA
Contents
Contents..................................................................................................................... 1 About company........................................................................................................... 2 Toyotas objectives..................................................................................................... 3 Vision statements.................................................................................................... 3 ....................................................................................................................... 3 Mission statements................................................................................................. 4 Toyotas operations strategy..............................................................................4 Product planning...........................................................................................4 Place planning...............................................................................................5 JIT stock management..................................................................................5 Kaizen- continuous improvement.............................................................................6 Quality circles ...............................................................................................6 Maintenance .....................................................................................................7 Cost.............................................................................................................. 7 Quality.......................................................................................................... 7 Dependability................................................................................................7 Flexibility.......................................................................................................8 Hayes et al.s (2005) criteria of consistency and contribution .............................8 Hayes and Wheelwright four-stage model of strategic role of operations.............9 Conclusion.........................................................................................................9 Literature................................................................................................................ 10 1

Faris Hajri Toyota

About company
Toyota Motor Corporation is a multinational corporation headquartered in Japan. Toyota is known as the worlds largest car manufacture by sales. But Toyota was not car manufacture from the early beginning. At first Sakichi Toyoda first power loom. This invention of the automatic loom was very important in that time and had great impact on the future of Toyota. Loom worked on the principle of Jidoka, which means that machine would automatically stop when problem occurs. This system Toyota use today. Kiichiro, Sakichi's son was also innovator and helped Saikichi a lot. Kiichiro travelled along Europe and USA to sell their patent rights. Patent right for the automatic loom was sold to a British company. With 100,000 that they received from selling patern they developed Toyota Motor Corporation, car development. First vehicles were sold under the name Toyoda1 that was family name of the founder, but later they changed their name in Toyota. The newly formed name was trademarked and the company was registered in August 1937 as Toyota Motor Company. Toyota introduced just-in-time philosophy, which was later introduced in many large companies worldwide. In post-war Japan, Toyota became the largest vehicle manufacturer in japan and had market share over 40% . In the 1950s Toyota started to share abroad. In 1957 first Toyota's vehicles arrived in USA. In Europe vehicles were imported in 1963 via Denmark. Today Toyota has one of the most recognizable and demanded products all over the world.

Family name. Toyoda in Japanese means "fertile rice paddies"

Faris Hajri Toyota

Toyotas objectives
Every company has objectives. They are important because they lead a company to certain goal. With clearly defined objectives, company would know what to do in advance, what their strategy would be and how they should implement them. If company clearly defines its objectives, they would be able to use them as a measure for their performance. If they fail to complete their basic objectives that means that company does not have quality strategy and that they need to introduce some changes. Basic objectives of every company and Toyotas basic and first objectives were to maximize profit. Another objective was to grow their business in the terms of sales, Toyota achieved this, because today their cars are one of the most demanded in the world and they maximize profit continuously. Also Toyota succeed in the increasing of the market shares, and that was their important objective. One of the most important toyotas objecitves was to make people think they are not jeopardizing their lives. They succeeded in that by proving that they are environmental friendly, so they started producing cars that have eco parts, what means that they are saving earth from pollution. To complete all these objectives they have one main objective and that is to provide high quality comfortable and reliable cars.

Vision statements

Toyotas vision statement is to be the number One provider of financial services. Winning customers for life. Toyota aims to achieve long-term, stable growth in harmony with the environment, the global economy, the local communities it serves, and its stakeholders Internal Environment (Hiroshu, 2003).2

Chairmans message. Retrieved September 30th 2010, from the Toyota company website.http://www.toyota.co.jp/en/ir/librar..._message_e.pdf

Faris Hajri Toyota

Mission statements
Toyota seeks to create a more prosperous society through automotive manufacturing (Hiroshu, 2003).

Inspired by the passion and the will to win customers for life, we commit ourselves to: Achieve market supremacy by providing excellent service and innovative products for Customers. Deliver quality service and timely support by utilizing manpower resources and potential, capitalizing on technological advancement, and transparent management. Achieve corporate growth and ensure stability and profitability through efficient financial resource management, thereby benefiting customer, Toyota Family, and society. Promote professional growth by acknowledging performance and developing a culture of trust, mutual respect and harmony, thereby increasing team members morale.

Toyotas operations strategy

From the early beginning Toyota was making its own trend of operation planning and operation strategy. For every operation planning future production level it is of crucial importance to estimate and forecast demand. It is important to link supply to potential demand. At first to have good strategy it is important to have a quality plan. Operations planning is preparing input resources to supply products to meet expected demand. Some important planning is product planning, place planning and planning of production methods.

Product planning
As it is earlier mentioned in the text, Toyota started as producer of looms. They produced first automatic loom and sold patent. After increasing profit, they decided to produce something new, something that consumers need, but still to do things which they do the best. That meant continuing of mechanical production. The best solution was to start car
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Faris Hajri Toyota

production. They already had machinery that could be used for that kind of production. After market research they made conclusion that car production will give them a profit, and thanks to machineries and experience they had before cost would be minimum.

Place planning
When a company plans place of production it is important to think about place where they will have minimum costs. That means that their place rent is cheap, that resources needed are close and easy to get. Also that labor workforce is not expensive. And that they are close to market. Toyota continued operating in Japan, because their earlier manufacture was settled their and they had excellent performance with low costs. They continued to cooperate with their earlier suppliers and found new suppliers for parts that their earlier suppliers did not have. Because of good performance and operations in their country they started thinking about placing their products abroad. First place where they decided to sell and operate was USA. That was modern country in which quality and reliable products were appreciated and wanted. Thanks to decision to export their products in USA they achieved population and admiring which increased their profit and influence productivity.

JIT stock management

There are few things which made Toyota successful and some of them are their ideas. Toyota developed just-in-time philosophy system. Kiichiros JIT philosophy was about producing only precise amount of already ordered items with minimum of waste. JIT management I about ordering quantities just when they are needed and right time when they are needed. This helped them to cut costs of renting warehouses, because less space for raw materials they needed and because of them they rented fewer warehouses and cut costs and also failure in delivery was reduced. For business to ensure good JIT system there are few important requirements: Relationship with suppliers have to be excellent Production staff must be multi-skilled and prepared to change jobs at short notice Excellent employer-employee relationship Accurate demand forecast
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Faris Hajri Toyota

Kaizen- continuous improvement

In April 2001 Toyota adopted the Toyota way 2001 in which they showed respect towards their employees, because they stated that just good working atmosphere and good employee-employer relationship can give good results. Kaizen philosophy states that sometimes employees know better than their managers and that they can give better ideas. Kaizen states that improvement is not just investing in new technology equipment but that improvement should be measured in small, but continuous improvements. For Kaizen to operate there should be included next steps: Management culture Teamwork Empowerment All staff should be involved

Quality circles
This is a Japanese-originated approach to quality. It is based on all staff involvement in improving quality. Using a small groups of employees to discus quality issues. Using team working and participation can result in greatly increased worker participation. The overall aim of groups is to investigate quality problems and present solutions to management.

Faris Hajri Toyota

Maintenance
Maintenance means preservation of the things in the organisation. In simple words, maintenance is way of protecting your production workers, office workers, drivers, and all the other users of your organizations assets.3

Cost
When it comes to costs Toyota has experienced a few periods in their operations when they met high costs. In the year 2010 Toyota experienced failure with break system. Because of that failure they needed to recall 8 million vehicles. That was huge breakdown for Toyota Motor corporation.4 But thanks to their good strategy management and customer loyalty they overcame this situation.

Quality
Before Toyota had problems with breaking system what decreased quality of their products. But that just helped them, to organize their quality management and customer service. Today they have the best customer service, they recalled all vehicles with failure, fixed them and returned them to their owners. After that Toyota continued to make high quality products and to give high quality services to their customers.

Dependability
Toyota introduced JIT, Kaizen and Quality circles what means that they depend a lot on the others. At first they depend on their employees, because in this systems employees make a lot of decisions and generate new ideas. Toyota also depends a lot on suppliers, because of JIT system. Suppliers mistake is Toyotas mistake, too.

(http://www.maintenanceresources.com/ReferenceLibrary/MaintenanceManagement/The_Batt

le_of_Maintenance.htm)

http://www.abc.net.au/news/2010-02-04/toyota-investigates-prius-brake-failures/321486

Faris Hajri Toyota

Flexibility
Toyotas operation management is flexible because of their organizational structure and philosophies they use. They develop their operations on team work, what means that they have democratic organization which supports flexibility. Using of Kaizen and Quality circles requires companys flexibility.

Hayes et al.s (2005) criteria of consistency and contribution

Hay developed two criteria when it comes to operations objectives and strategy. First one is criteria of consistency. Consistency is the strategy consistent: Between the operations strategy and business strategy Between the operation strategy and the other functional strategies Between the different decision areas of operations strategy

Contribution to competitive advantage. Does the strategy:

Enables operations to set priorities that enhance competitive advantage Highlight opportunities for operations to complement the business strategy Make operations strategy clear to the rest of organization Provide the operating capabilities that will be required in the future5

Toyotas business objectives and strategy fit with it operations objectives and strategy by Hay et al. In their business objectives they are succeeding to fulfill all this statements from criteria.

http://cws.cengage.co.uk/barnes/students/sample_ch/ch2.pdf

Faris Hajri Toyota

Hayes and Wheelwright four-stage model of strategic role of operations

They developed their four-stage model stated on their belief that organizations operation can provide a source of competitive advantage. There are four stages. Stage 1 is Internally Neutral. In this stage companies objectives may change often at low cost, with increasing of flexibility and quality. Toyota did not have change of its objectives often, they always stayed at their belief and objectives, but with high level of flexibility and increased quality. Stage 2 Externally Neutral. In the second stage companies are trying to increase their performance by adopting different techniques, philosophies and methods. Toyota was the first to develop and implement JIT stock control, Kaizen improvement, Total Quality Management, and used that as competitive advantage. Stage 3 is Internally Supportive. In this case performance objectives are aligned to meet business objectives, as it is case in Toyota. Competitive advantage would be increased if company adopts the best practice in operation. Stage 4 is Externally Supportive. In this stage company tries to find best practice and to use it so they can keep their old customers and to get new ones. 6

Conclusion
From the early beginning Toyota operated well and made revenue. They always had some innovations and they were always among the best car producers. They started first with innovations and philosophies such as JIT, TQM, Kaizen and Quality circles. These techniques are used today worldwide. Toyota experienced some failures in 2009 and 2010 that break them a bit, but thanks to their quality operations they succeeded to fix it and started again to make revenue. After that Japan experienced earthquakes and that costs Toyota a lot, but again they are the best cars producers and sellers worldwide.

http://cws.cengage.co.uk/barnes/students/sample_ch/ch2.pdf

Faris Hajri Toyota

Literature
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Stimpson, P., Farquharson, A., Cambridge International AS and A level Business Studies, Cambridge University Press 2002, 2010. Internet:
http://cws.cengage.co.uk/barnes/students/sample_ch/ch2.pdf http://www.toyota-global.com/ http://www.wikipedia.org/ http://www.abc.net.au/news/2010-02-04/toyota-investigates-prius-brakefailures/321486 http://www.toyota.co.jp/en/ir/librar..._message_e.pdf
(http://www.maintenanceresources.com/ReferenceLibrary/MaintenanceManagement/Th e_Battle_of_Maintenance.htm)

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