Operations Management Role And Operations Strategy Toyota Accounting Essay

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Operations management is the maintenance of the production of goods or services that a company is developing for sale. The management team is charged with the task of ensuring a profitable and safe production system, and also ensuring that resources are allocated and used in an efficient manner, minimizing waste in labour and material resources. In order to meet these goals, the management team thus has to attempt to find the best operations strategy available for their particular situation and product. The biggest challenge for any organization and its operations is to try to maximize productions by cutting down on waste, Finding the right balance between getting the production up to the required standard by using the resources available to the optimal level.

There are many strategies that can be used by an operations manager depending on the needs of production, and in the first section we will examine some existing operation management strategies, and in the second section we will examine the effectiveness of these strategies, and how well they fit in with the goals of the target organization, Toyota.

2. Operations Managers Role

The Role of an operations manager is of utmost importance as any operations manager who can effectively utilize an organizations resources to efficient effect by producing outputs of a standard & sustainable quality, contributes to the organizations targets in maximizing profits by reducing costs.

"Operations management focuses on carefully managing the processes to produce and distribute products and services. Usually, small businesses don't talk about "operations management", but they carry out the activities that management schools typically associate with the phrase "operations management." Major, overall activities often include product creation, development, production and distribution. (These activities are also associated with Product and Service Management. However product management is usually in regard to one or more closely related product -- that is, a product line. Operations management is in regard to all operations within the organization.) Related activities include managing purchases, inventory control, quality control, storage, logistics and evaluations. A great deal of focus is on efficiency and effectiveness of processes. Therefore, operations management often includes substantial measurement and analysis of internal processes. Ultimately, the nature of how operations management is carried out in an organization depends very much on the nature of products or services in the organization, for example, retail, manufacturing, wholesale, etc." [1] 

A successful operations manager can contribute to the organizations success, by being smart on how they utilize the organizations resources, managing the inputs into outputs and thinking outside the box by focusing on the specifics of the operations and process keeping in line with the mechanics of the set up provided by the organization.

3. Operations Management

Lean Manufacturing

Toyota is no stranger to operations management, and is responsible for coming up with the lean manufacturing strategy, sometimes known as "Toyotaism." Essentially this strategy deals with the elimination of superfluous resources, particularly those which do not pertain to the value of the end product. Lean manufacturing also involves only employing resources towards services, products or features that the customer wants, thereby giving the customer the largest value with the lowest amount of resources. It is important when employing this operations management technique to first identify those areas which waste of resources is occurring, either because of work that is non-value adding, or simply wasteful and can be eliminated. One such example of lean manufacturing is the cycle-time variation technique, which saves on the time it takes to produce output units on a production line.

Six Sigma

Though Toyota is strong in employing the strategy of lean manufacturing to their operations, there are several other strategies that can be employed in order to benefit the organization. For instance, the six sigma approach to operations management, which was initially developed by Motorola, is another approach, though perhaps more controversial. By removing errors and limiting the variability in manufacturing, the six sigma process ensures that there is a very low level of defect in the output product, and improves the quality of the outputs. The six sigma approach also relies on the specialization of different aspects of the six sigma approach, and this system works on a hierarchy of people. At the top of this hierarchical chain are the executive leadership who serve to set out the vision for implementation of the six sigma, and then below them various levels of personnel who are in charge of broad implementation, specific projects, statistical projects, coordination and mentoring.


Another Japanese-born method of operations management is the principle of Kaizen, which focuses on incremental but continuous improvement. This approach is closely linked to the lean manufacturing approach in the sense that it also focuses on reducing wasted resources that do not add value to the end product, but in addition to this it also seeks to continually improve all areas of operations. This idea of continual improvement is carried out on a day-to-day basis, and serves to humanize the workplace by eliminating unnecessary hard work and thus encouraging all employees to participate in the improvement of the organization. Another important feature of Kaizen is to focus on carrying out small experiments and measuring their results rather than implementing large sweeping changes, as small changes can be judged and quickly adapted accordingly. Kaizen also involves an emphasis on self-discipline, teamwork, improved morale and suggestions for improvement from all levels of the organization.

Theory of Constraints

The theory of constraints is an operations management technique that suggests that typically there are small constraints that limit an organizations ability to achieve their desired goal, and as such the organization ought to identify these constraints and restructure their operations in order to address these constraints and thereby minimize them. These constraints can be internal to the company (equipment, policy, employees) as well as external. This strategy relies on the premise that there are only at most a few constraints limiting productivity and output, and that the most crucial step is to focus resources into minimizing the constraint, which will produce the maximum improvement in the overall organization. This strategy is employed by first recognizing and addressing the largest constraint, and then focusing on other constraints in turn.

Hoshin Kanri

The Hoshin Kanri model of operations management focuses on policy deployment, particularly by deploying policy at all levels of the organization, each level having its own targets and goals that are part of the larger goal of the organization. The main effort is centered around a goal, and then leaders are organized and positioned to each work on a part of achieving that goal, for which they will be accountable for. In this strategy, the focus is more on the overall goal rather than specific daily goals or short-term goals. The important emphasis is on every level having its own specific piece to contribute towards the goal, and each part being held responsible for the attainment of the goal laid out for them by the initial policy.

4. Operations Recommendations

There are a number of recommendations that can be made to Toyota to improve their operations management strategies and techniques. Toyota already uses the lean manufacturing method of operations management in their production of vehicles and as mentioned above, it can be said that the method is the Toyota method - it was pioneered and developed by this company and the company evidently still employ the method of continual improvement and efficiency in their operations dealings and waste management. However, it will be recommended here that to achieve the best possible operations management strategy, the lean manufacturing technique must be employed in conjunction with other techniques so as to establish the best possible operational efficiency and waste management.

The first recommendation is to do with the six sigma technique. This technique is often criticised but it can offer a suitable improvement to the operations management techniques of Toyota. It has been remarked that the six sigma technique is based on arbitrary standards of success - this is because the standard of success is always set at a standard deviation of 6 on the normal distribution of a production curve - and it is difficult to see how such an arbitrary number can offer anything of importance to widely different products and services that require greater or lesser amounts of quality control. However, though this criticism may make sense for something which requires a very high degree of quality control in which a standard deviation of 6 is highly irresponsible, such as military equipment, there is no need to apply this criticism to the motor vehicle industry where the six sigma system will work perfectly well and increase the quality of Toyota's product measurably. The six sigma system can be used alongside the lean manufacturing technique so that quality control and waste management can be suitably and efficiently controlled with the same process and management team. This will not only save on waste and improve quality but will ensure that the operations management team itself is running things smoothly from one optimal vantage point.

The next recommendation is in regards with Kaizen. This technique is very general and can be applied along with any other techniques that a company may already be using such as the lean manufacturing already being used by the company under scrutiny, Toyota. The reason for recommending Kaizen along with the current lean manufacturing and the other recommended technique of six sigma is because Kaizen is seen as a great motivational tool. Kaizen, as well as seeking to continually improve efficiency just like the lean manufacturing technique also employs a continual appraisal system that all of the workforce is encouraged to participate in and not only the operations management team. This is an incredibly successful motivational tool as it is quite obvious that a workforce that feel their voices are being heard and they have a tangible stake in the final product will work harder and far more efficiently to the betterment of the overall operations performance of the company. Toyota, and any company in fact, would be well advised to employ such a method of operations management that not only improves efficiency vastly but also raises the esteem of the production team as well.

5. Conclusion

In conclusion, it would be fair to say that Toyota already employs a very efficient and thorough operations management strategy and that to their credit they developed it themselves. However, lean manufacturing, in its very ideology asks for infinite continual never ending improvement, and the alliance of the lean manufacturing technique with the six sigma technique and the kaizen method represents that continual striving for improvement. These additional operation management techniques will add greatly to the performance of the company by giving the company a tangible quality control system, a highly motivated workforce and a decades old and highly refined waste management system. The amalgamation of these techniques will offer Toyota the best way forward in the global vehicle industry as one of the major players in the field and wll allow Toyota to be at the forefront of quality innovation in the operations field - the recommendations made in this assignment will achieve tangible and testable success in the performance of the production of goods and services by the company, Toyota.