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Role and Importance of Operation Management

Operational Management

To operate the operations in the company is need of our daily life and this thing includes the basic task of schedules by which we can achieve the particular tasks.

Operation management is a specific field in the organization which concerned of the manufacturing of goods and takes care of services. In the small scale organization. They don’t speak about the O.M, but they contain all the actions that business Colleges associates with the idiom “Operation Management”. Main tasks of “Operation Management” generally contain Manufacturing, Progress and Supply and these are the main operations in any organization .So it means the “Operation Management” is to look up on all the operations in the organization. The added operations are like control the inventory, Control the quality, Manage all the purchase, Storage and evaluations. But the main purpose is to take care of products effectiveness and efficiency. In every organization the “Operation Management” is different according to the type of the organization e.g. wholesale, retail etc.

Role and Importance of “Operation Management”:

Role of “Operation Management” in any organization no matter small scale or big scale is same. Because the operation manager is on the second position of the organization. Just after the Directors. Basic roles of operation manager are as follows:

Production (Quality, Efficiency and effectiveness of product)

Progress

Logistic (Deliver everything on the time)

Manage all the purchase, Storage and evaluations

Health and Safety(Operation manager have to take care of all the Health and Safety issues)

Importance of the of “Operation Management”:

“Operation Management” is very important in any organization because it forms the heart of the organization by just controlling all the basic operations which plays an important role for the success of the organization. Operation manager take care of all the operations and deliver a Fine product in market at last. Day to day running of a successful profitable concern taking in mind the safety and the health of the work force are his main duties. If there is no operation manager in an organization then somebody have to give the duties of operation manager. Because operation manager duty is to inspect the Operations going on and inspection is must in any organization to keeps organization running in successful condition.

Some Basic information about the Toyota Motor Organization:

Toyota Motor organization is multinational organization. Its main headquartered is

In Japan. It is world’s biggest automobiles sales are done by Toyota Motors. Approximately 320,000 workers are working in Toyota all over the world. This organization was started by Kiichiro Toyoda in year 1937. In year 1936 Toyota makes the first traveler car called “TOYOTA AA”. Toyota also runs a Toyota Financial Services and also makes robots. By adding all the services given by Toyota it becomes a world largest conglomerate.

Fresh loss measure for Toyota:

2007 -2010

On 8th may 2009 Toyota organization measure an annual loss of US$ 4.2 Billon? In Nov 2009 Toyota recalled all the cars and trucks back and halt the production and sales. By United States congress U.S Sales chief was questioned under investigations on 23th Feb 2010.The government of US put the penalty of US$16.375 Million for delayed response in notifying the National Highway Traffic Safety regarding defective accelerator pedals. May 18th 2010 Toyota paid the entire fine and 18 May 2010, Toyota paid the fine without an admission of wrongdoing. The record fine and the high profile hearings caused accusations of conflict of interest. The U.S. Government is regulatory body and part owner of two major competitors, General Motors and Chrysler.[19][20] Senior managing director Takahiko Ijichi said that recall- related costs in the financial year that ended March 2010 totaled US$1.93 billion (180 billion yen).

Task (19.1b)

According to Johnson and Scholes strategy definition is as follows:

"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

Strategy is describe as the attentiveness of an organization into its heart competencies (by means of its future plan of action) to gain a very competitive advantage.

Types of strategies

There are four types of strategy that are there in framework of organization and its surroundings. Each level is very important for any organization.

1 - Industrial level strategy

This type of strategy is at the industrial level like government rules and regulations.

2- Corporate level strategy

Corporate level strategy anxiety the business as an e.g. of”Corporate objective” may contain:

Plan for return on invested money at least 16%

Plan to increase the share at least by 10% annually.

3- Business level strategy

Many organizations are noticeable with variety. This level of strategies anxiety identifies the market in which every organization compete and the magnitude of struggle concerned.

4- Functional level strategy

An organization struggle in quite a lot of markets and therefore every job require making a strategy suitable to each of these markets. This type of strategies anxiety investing and increasing the essential capability to take this.

Strategic objective for Toyota

Every organization has same strategic objectives. Toyota main strategic objectives are as follows shown in the diagram:

Current major Strategic objectives for Toyota

Launching Toyota new automobiles and services in Pakistan and others are following:

By deliver value to customers to achieve the market goals

By take care of our philosophy “Customer First” giving the customers a high quality of automobiles and services which meets the customer’s needs and satisfaction. Pleasing the eye of quality and reach 3S network. Getting the regular feedback of all our customers for continues improving the development of new product and improves the customer care and services.

Improving the quality of all the Toyota automobiles and services in Pakistan

Improving QRD (Quality, Reliability and durability) by improving the built- in engineering transferring technology. Crossing the bar to meet the Toyota Global Standards.

Maintain the cost by Kaizen

By applying the Kaizen culture to maintain the cost and implementing the Toyota Production System. Remove all the rubbish materials in all areas.

Giving respect to employees to improve the teamwork

To improve the teamwork most important thing is to treating good to all the employees whether they are at high level or low level. Because the employees are the most important recourse for any organization. Providing the entire learning environment. Making separate team for Human Resource management. Giving equal employment opportunities without any unfairness. Building competitive value by mutual trust and mutual responsibility between the company and the Indus team

Becoming the good corporate citizen

Tools to analyse the strategic objective

Tool to analyse the strategic objective I am using the SWOT Analysis

SWOT analysis is a strategic planning method used to estimate the Strengths, Weaknesses, Opportunities, and Threats in a new product development and in a business too. By SWOT Analysis we can know every favorable and unfavorable factor for our organization.

Strengths: This is the first level of SWOT. We have to know about our strength while launching any product or Business. By just taking example of Toyota like now Toyota’s strategy is to launch an automobiles and servicing. What is main strength of Toyota now Customers, Strong Economy, Best employees, Production and new product development teams, efficient suppliers etc.

Weaknesses: Weakness means that is there something weak which will affect the organization in their new product development e.g. Competitors, if the product is already in market which Toyota developing. There is lot of other weakness too like Shortage of goods, Suppliers are not guanine, New Brand (Not known in market), Employees are not updated etc. But Toyota has no weakness like that. So just one weakness that is competitors in market.

Opportunities: These are the external factors which will help the organization to attain objective.

Threats: These are the external factors which will become a wall between the developments and may be destroy our objective. E.g. Competitors, if the product is already in market which Toyota developing then it will affect the sale of product.

By just keeping in mind all the steps of SWOT Analysis while attaining objective we can achieve the objective. First management think that whether this objective is achievable or not if not then different objective have to processed and same process repeated again.

Task(19.1c)

Performance operations objective of Toyota in Pakistan

Toyota already launches the new cars in Pakistan named as following:

AVANZA (All in one MPV)

Toyota launches new safety hazards in this car to help the person to avoid accidents. Some safety hazards are as follows:

Airbags

Crash safety body

New seatbelts

A.B.S(Anti Lock Breaking System)

Break Assist

TERIOS (The First SUV Thrill)

This car is also launched with full safety hazards.

FORTUNER(The new icon of power)

The new feature in this car is Full- time 4*4X system. It means this car can drive on variety of surfaces with ease.

Now it means performance to achieving the objective launching of new cars in Pakistan is at the peak. Among all the organizations around the world, Toyota produce High-Class and High- Quality cars with hardly any defects , while using less workers time, a reduced amount of inventory and 50% space of its story is for competitors.

Toyota’s main principles are:

Reduce the wastage of time

Construct quality into systems

Find low down cost but consistent alternatives to costly new machinery

Manufacturing in small quantity

Turning every worker into Quality manage examiner

But the way in which company secure, organize and use its resources will check only by particular performance objectives.

So five operation objectives are as follows:

Quality: Quality means to make the product according to the need and without any errors. Toyota always makes the products according to the customer needs. In new launched cars as I discussed first about the safety in new launched cars is very good all according to the customers’ needs. The exteriors, Interiors and Performance of these cars are very effective. The new style conveys wisdom of quality with outstanding energy and steadiness.

Cost: Cost means that the capability to launch the product with low cost as u can. New launched cars by Toyota are full of safety measures, Exteriors, Interiors and performance everything is of top class but the cost is very high. So these cars are for high class peoples. As we all knows that Pakistan is one of the developing countries in the world that’s why very rich persons are living there. So no problem about the high cost. Every rich person wants the quality not quantity no matter how much it cost them.

Speed: It means to do the job quickly as u can e.g. if u got the orders for ten cars or services clear the order as quickly as u can. As we all knows Toyota is very old organization known for its customer’s satisfaction. So they already know about the speed.

Flexibility: Flexibility means to change the tasks or operations quickly. Flexibility can involve up to four aspect:

Capability to alter the degree of production.

Capability to alter the time taken to produce.

Capability to alter the mix of special products or services formed.

Capability to innovate and begin new goods and services.

Dependability: It means to deliver the product and services according to the promises made to customers. Toyota always takes care of customer’s satisfaction because customers are the key for the any successful organizations. So Toyota has a special team for the customer’s complaints.

This picture shows Operations excellence and competitive factor

Task (19.2a)

Tools, Resources and system used in Toyota to Support its Business Process

Main recourses used by any company are manpower. Same Toyota main resources are man power. If organization have qualified and dedicated manpower only then organization can make name in market for their products. Other general resources Toyota used are raw iron, steel, Plastic, Lean software, TPS System etc.

Diagram showing Toyota’s resources suppliers

Toyota tools are more than other tools and techniques

Toyota used Lean Manufacturing. Lean is a Japanese term. Lean principles was first coined by John Krafcik in 1988.Krafcik was on the post of a quality manager in the Toyota-GM NUMMI previous to coming to MIT Sloan School of Management for MBA. But in 2007 Holweg coined the term “Lean”.

What is Lean Manufacturing?

Lean is set of tools by which we can get rid of the waste. If waste is eliminated manufacture time reduced, cost reduced and superiority of product improves. Some examples of Lean tools are FIVE S, KANBAN, POKA-YOKE and VALUE STREAM MAPPING etc.

Toyota promotes the second approach to Lean Manufacturing. Whose main focal point is to improving the work flow and little by little remove mura (“roughness”) through the scheme .Techniques used by Toyota to get better flow contain production leveling “pull” (by KANBAN) and Heijunka box.

Example of Kanban system used in Toyota

Toyota set up its Kanban System. (Kanban is the word of Japanese used for “Signs”, “Cards” or “Tickets”). So Toyota used the Kanban System for organizing the flow and Manufacturing of products. In Toyota style it is called “Pull” production system. Just plug in ANDON (Japanese word means warning lights) the electronic device alerts workers for defects and other wrong things by light signals or alarms.

System used in Toyota is TPS (Toyota Production System)

Lean manufacturing is standard procedure management idea resulting from the Toyota Production System(TPS).Its main focus is to reduce Toyota seven wastes to get better in general customer worth. The growth of Toyota from small company to world’s largest automakers is achieved by TPS. TPS has two pillars one is JIT (Just in Time or we can say “flow”) and other is AUTONOMATION (). TPS and LEAN both are slackly related because both goals are to cut the cost and get rid of the waste.

The potentially competing principles are as follows

1-Pull processing 2- Waste reduction 3- Regular Improvement

4-Maintain long-term relation with suppliers 5-Flow of manufacturing

6- Visual Control 7- Autonomation

Toyota thinks that most important technique of Lean is not the tools but to cut three types of wastes that are muda (Non- value adding work), muri (overburden), Mura (unevenness).

I studied everything about TPS from internet and books. But now question arises how to apply TPS to my business. My business is not to make cars, I make low value products. But then I realize that Lean is not concerning imitating the tools used by Toyota. It is all concerning the principles that are accurate for your company and conscientiously working them to attain sky-scraping performance that continues to

Add worth to clients and the world.

Toyota has 14 principles prearranged in four broad categories

Long-Term Idea

Support your organization decisions on a long-term idea, even at the cost of short-term economic goals.

The accurate procedure Will create the accurate outcome

Generate a regular process flow to fetch troubles to the surface.

“Pull” systems used to keep away from over manufacturing.

Run like tortoise, not like rabbit.

Construct traditions of stopping to remove troubles, to get right class

Consistent errands and processes are the key for regular changes and workers empowerment.

Visual controls should be used to remove the hidden problems.

Only consistent, carefully checked technology should use that serve your manpower and processes.

By educating to your worker with new technology add value to company.

Produce leaders who methodically know the work, live the Idea, and teach others.

Expand outstanding workers and teams who go after your organization viewpoint.

Give respect to your suppliers and partners.

Regularly Solving Root troubles Drives Organizational Learning. See yourself carefully recognize the circumstances (genchi genbutsu). Take the decision very carefully and slowly by compromising the situation (nemawashi).

Task (19.2 b)

Quality Audit

It means to inspect the quality of the products by internal or internal audit teams. In any successful organization the main part of Quality Management System is quality audit and it is key in component in ISO standard system.

It is a process of examine the degree of superiority of product.

It is to determine whether the product is manufacturing according to strategies made by organization. In small organizations quality audits are internal but in big scale organizations quality audits are internal and external both carried out.

Three types of audits are there

First party –These are only internal audits carried out in an organization by internal audit teams.

Second party audits 3- Third part audits

Both Second and Third party are external audits carried out by external teams. But second party audits are done by customers or other companies. Third party audits are carried out by ISO.

Review System- It means to review the audits again to give the product a class. By reviewing the audits again all the small or big errors should removed.

There are many models to check quality like DTA, ECO MAPPING, EFQM, EMAS, and PQASSO. But I recommend Toyota an EFQM model.

What is EFQM Model?

EFQM stands for European Foundation for Quality Management. It can some time called Excellence model. This model is used to measure the strength and weakness of an organization among all of its activities. Term Excellence is used because this model paying attention on what organization could does to give excellent products to customers. Every type of organization can use this model and in its own way to develop the improvement.

Excellence Model Framework

These nine ideas in this model can cover all the activities of an organization. These ideas are separated into Enablers and Results. Enablers mean how organization conducts itself, how it review and monitor processes and how organization plans its strategies.

The enablers are as follows

Leadership 2- Peoples 3- Policy and Strategy 4- Partnerships and resources

5 - Processes

The result of the organization is what the organization gains .This thing increase the satisfaction among company workers and customers and market.

The Results are as follows

Peoples results 2- Customers result 3- Society Result

4- Key performance result

So now question arises why Toyota have to use this model for quality check. Some benefits to use this model are as follows:

This model steadily addresses a systematic series of superiority issues and also gives awareness to blow by outcome.

This model analyzes actions of organization very undoubtedly and is very useful for preparation and it highlight how goal is achieved.

It seeks to encourage the ethnicity of continues improvements.

It is very flexible as enough to used in bite sized chunks e.g. This model can analyze the environment policy of organization with in a single day or less hours and provide a framework for review the quality.

Scoring’ can provide an organisation with an internal benchmark for its next self assessment, in order to capture trends. It can also be used among organisations for some external benchmarking and comparison.

The Excellence Model stresses the importance of consensus in assessing an organisation’s strengths and areas to improve.

This model can be used by any organization. Resources needed are as follows

Leadership 2- Proficiencies and Skills 3- Staff Time 4- Courses, support and information

Many organizations are using this model currently like Community Enterprises Limited (C.E.U Ltd), Thames Research and Liverpool personal service society.

To adapt this model a special qualified quality check staff is required. Because in this system quality have to check from the beginning of the manufacturing to end of manufacturing of product. So Toyota can easily adapt this system.

Task (19.2 c)

Quality Culture: - Quality culture means to improve and maintain the quality with committed team as well as individuals.

Toyota’s Quality culture is too the point as they know quality is the priority. So any employee in the Toyota Production System can halt the process when getting signal for errors or defects in product by KABAN system used by Toyota.

To control quality Toyota used the principle “Jidoka”. It is used in TPS and Lean Manufacturing. ”Jidoka” means Intelligent Automation or Automation with human touch. At Toyota if errors occurred while manufacturing then machines stops and manufacturing stops and automation focused on eliminates the problem and ensuring that it never come again.

Following principles applies:

Fetch the problem

Stop the manufacturing

Fix the problem as soon as u can

Investigate why problem occur and install the counter measures

New quality control culture can be installed in Toyota. But the culture Toyota is using now can beat any Quality Culture. I suggest new quality culture is to make one separate team only for monitoring the errors. When error or defect occur Quality team take action immediately to correct that error. No other employee should be eligible to stop the manufacturing. And that team has responsible if that error occur again. By making separate team quality check is monitored continuously and company not has to depend upon the manufacturing team to find out errors. So this quality check culture is addition to the old quality check culture or we can say updating of old quality control culture. Because quality culture used by Toyota is best in the market so we can’t change this culture but we can update this culture.

Task (19.3 a)

Major problem affecting the systems of Toyota is:

Recently Toyota facing a very major problem is carelessness of quality team. Some Toyota automobiles owners reported for Toyota models accelerator that accelerators were strangely getting stocked sometime and this problem cause major accident while driving automobiles. So due to this problem Toyota issued recall on its selected model and also completely stopped the manufacturing of these models. So this would be the major financial collapse for Toyota. But by recalling on selected models and halted manufacturing will show that the Toyota is loyal to its principles and really care about its customers. According to Father of TQM quality and better than quantity. Toyota proved that they are not like other manufacturer they care about their customers. That’s why other competitors might be jealous of Toyota and they have right to be jealous because Toyota is a premier automobile manufacturer. When this problem will resolved by Toyota customers may be eager to buy its vehicles.

But now the issue comes that how this problem occurs. This problem occurs because of carelessness of quality check team and more dependence on manufacturing team about quality. Any employee in TPS can stop the system if error occurred. So what it means dependency on manufacturing team. That’s why I mention in Task (19.2 c) that Toyota has to make a quality check team which audit the quality in continues process not to be depending on manufacturing team about the quality and all the steps for Quality assurance process should be followed.

Steps are as follows:

First test the preceding commentary

Create the plan remove the defect or error

Design

Manufacture again with improvements

Review again

Test the new manufactured item

Opportunities that Toyota can avail to improve business process

As I mention above about the problem facing by Toyota in T.P.S is that the accelerator of cars getting stuck while driving. So after removing this problem or defect Toyota again starts manufacturing these models and customers will eager to buy those models because quality is checked again and rework is done on those models. So now these models should be perfect and without defects. Because more care should be give to these models because of past errors.

Task (19.3 b)

No matter Toyota is one of the largest organizations in automobile market and we know that no one is perfect. So the main improvement in Toyota is Quality check. If this quality check improved in Toyota then Toyota is no more left Toyota it becomes Perfect Toyota without errors. Main problem in Toyota organization is Quality control.

From 2000 to 2010 Toyota recalls the automobiles many times as a list follows:

2000-2004 Avolan - Toyota recalls the six cases for improper casting of the steering lock bar. Six cases are genuine in four years. But these six cases can be eliminating by improving the quality check.

2005-2100 Avolan - Toyota again recalls some cars for Floor Mat Entrapment.

2007-2010 Camry - Pedal recalls.

2009-2010 Corolla - Pedal and Floor recalls.

2008-2010 Highlander - Pedal and Floor recalls.

2009-2010 Matrix - Floor Mat Entrapment and pedal assembly recall.

2004-2009 Pirus - Floor Mat Entrapment recall.

2010 Pirus - Anti Lock brake system recall.

2009-2010 RAV4 - Sticking accelerator pedal recall.

2003 Sequoi - To upgrade program in its vehicle stability control.

1998-2010 Sienna - To Address Potential Corrosion on Spare Tire Cable.

2005 – 2010 Tacoma - Floor Mat Entrapment recall.

2009-2010 venza - Floor Mat Entrapment recall.

As we search the maximum recalls are for Floor Mat Entrapment and Pedal. So quality check team has to put more efforts on these errors and these errors should be eliminated forever.

Toyota can avail the new opportunities like after removing all these errors by just making the new efficient team for the quality control check. If all these errors are removed, no more recalls and then customers faith increases in Toyota and more sales, more profit more opportunities to develop new products and even Toyota can launch the new services too, because main strength is customers more customers u have more the successful organization is.

Task (19.3 c)

Impact of proposed recommendations with in Toyota

Toyota can avail the new opportunities after removing all these errors by just making the new efficient team for the quality control check. If all these errors are removed, no more recalls and then customers faith increases in Toyota and more sales, more profit more opportunities to develop new products and even Toyota can launch the new services too, because main strength is customers more customers u have more the successful organization is.

Main recommendations for Toyota are as follows:

Improve the Quality Management System.

Not fully dependent on the manufacturing team.

Work on the common errors. So no need to recall the automobiles again and again for same problems.

Quality checks should be in continuo’s manner (Regular check every day internally and one time in a week externally).

By doing all these changes first main thing is common errors removed for forever and customers will happy to buy the new error free products. Internally changes within the Toyota is confidence for error free product, Team work improves, Economy increases and organization become more successful.

These recommendations are very feasible to implement for the organization like Toyota

Because these changes require just updating the Quality System Management team or hire new team – This is not a big deal for Toyota. Because Toyota economy is very strong can easily update the team or easily hire new team.

Giving the team a proper duties and make sure that the team do team work with full dedications – For this Toyota have to hire the educated and experience Operational Manger or update the old one which can handle the manufacturing and Quality check team and take care of all the current processes and tell the team that at the end of the day every detail related to manufacturing and quality check should be on my table.

(Task 19.3 d)

Plan for implementation:

Following steps involved in implementing the plan:

Updated Quality Management System team will study all the common errors which bother the Toyota again and again and come up strategy. It will forward strategy to management team.

Management team will review the strategy and find out the resources used to implement the strategy and then take decision to go further or not. If any changes required then again pass the strategy to Quality Management System team.

When the strategy approved all the departments have meeting on allotment of recourses.

Now changes have to make further according to strategy on trial basis.

Evaluation will be done if the errors are removed if not then again take corrective action to avoid the problem.

If this strategy is not making the changes then slowly removed the strategy and work again from starting, but if doing well then continue the work with full stretch.

To avoid clash with the workers may be of timing issues, Operation manager have to take following steps:

While hiring the new staff take care of things like the new candidate is suitable for job and work according to organization requirements.

Note the days and timing when that person is not available and employee new person for that day so company works don’t suffer.

Keep one or two person for back up for situation if anyone falls sick or not come because of urgent work.

Tell every single employee about the guidelines for leave.

Use the notice boards for displaying information or to communicate.

Possible changes within the Toyota after the plan implemented

By introducing all these changes main changes comes in is all the common errors are removed for forever and customers will happy to buy the new error free products.

Internally changes within the Toyota

Increments are given employees.

Motivated and satisfied Employees confidence increases because of error free product.

Less work has to do.

Less tension.

Team work improves.

Economy of Toyota increases.

Organization becomes more successful.

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