The Market In Terms Of Performance Objectives At Toyota Marketing Essay

With the rise in the competitive automobile market, it is becoming essential for car industries to implement an effective operations management in order to meet the customer’s high expectation of goods and services.

The aim of this report is to create comparative and contrasting analysis of operations of two organisations for automobile sector: Toyota VS Honda. The report presents the deign for such both plants in which includes the following components: the market in terms of performance objectives (quality, speed, dependability, flexibility and cost), transformational processes, operations management concepts / theories / techniques underpinning these transformation processes, comparative analysis, conclusion and recommendations.

As a result of this processes make Toyota to manufacture vast amount of vehicles with high standard of operation. Toyota has approached a new and different way to manufacture products better than any competitors. Slack, et al (2007e) identifies that true customer satisfaction would be achieved only when its products were delivered when promised, with no defect and early-life failures and when the product did not fail excessively in service. To achieve this, Toyota initially aims at utilizing fewer parts variances to build the different car styles, which cut the time of change over and enhance efficiencies (Espinoza, Bond and Kline, 2010). This leads to Toyota to manufacture new vehicles to take 12 months or less, whilst two or three years will be required by other competitors (Tay, 2003). It can thus be assumed that with Toyota Production System, Toyota has become faster, leaner and more efficient which allows for more consistent product quality and eventually lower costs and lower consumer pricing.

Materials-processing technology

In order to transform the materials to its production of vehicles in a speedy way, Toyota uses automated guided vehicles (Yagi, 2006). It has a big impact on Toyota’s production. Because the robots enable the processes faster and consequently efficiency of the operation has been enhanced.

Operations Management concepts / theories / techniques underpinning these transformation processes at Toyota

Method Used in Controlling Waste

Toyota has striven above its competitors with the use of TPS which refers to reduce cost by eliminating waste and make full use of human capabilities as well as Just-in-time (Slack, et al. 2007c). The reason why that Just-in-time process is important is that it brings parts along with the time when they are needed on the line. This tends to focus on the micro issues or structural issues at the operation in Toyota. Consequence of TPS, production capacity has been increased such as in the UK from 220,000 vehicles to 270,000 and from 184,000 to 240,000 in France (Anonymous, 2003). The evident of this finding suggest that Toyota created the new innovative way of operating which results in improving their efficiencies.

4Vs at Toyota

The reason why 4 dimensions are used is to point out the difference between Toyota and Honda through this analysis.

Volume – High repeatability in the transformational processes which manufactures large number of vehicles every day and the systemization of the factory where standard procedures are set.

Variety – From the research finding’s point of view, it can be assumed that Toyota has low due to routine of operation system.

Variation – Toyota seems to be low variation because they are able to sustain the ability to reduce cost and quality improvement continuously.

Visibility – This could be low because the transformation processes are standardised.

Purchasing Policy

Toyota has a monopolistic purchasing power from suppliers to achieve cost effective customer service (Simpson, et al 2007). It is apparent from the power that this enables Toyota to buy more row materials.

The Market in terms of Performance Objectives at Honda

Quality

They focus on meeting customer satisfaction with respect to all of their products and services (Howell and Sakurai, 1992).

At this specialized service department, resolution of any quality issues and keep customers up to date are provided by spreading the latest update on recommended maintenance procedures (Honda, 2006a).

Speed

Externally speed is vital due to quick response to customers. Honda describes speed as how much faster an order can be processed compared to the other competitors (Honda, 2010b).

They work its way through suppliers in providing the spare parts on time and maintaining an internal customer design (Li and Choi, 2009).

Dependability

Serving their customers the best, the delivery times given to customers depending upon the car option and models is thus verified and Honda tries its best to never to delay any customer’s order (Frits and Matthias, 2004).

Honda established its cars in huge batches to a schedule which is fixed six months in advance (Pilkington, 1998a). Using this method, the company believes that it is able to best maintain the engineering standards of the vehicles (Pilkington, 1998b).

Flexibility

Be able to produce different kind of models on the same assembly line (Daniel et al, 2009)

 Honda focuses on enabling and constraining thought and action of organisational actors (Peltokorpi, 2008).

Cost

Honda buys row materials and certain components and parts from various external suppliers (Tabeta and Rahman, 1999).

Honda has ability to obtain main suppliers which for the items and raw material that use in the manufacture of its products due to their efficient and cost-effective manner to numerous factors (Honda, 2009c).

Transformational Processes at Honda

At Honda, the transformational processes are to produce vehicles in large batches, not the batch of JIT approach favoured by Toyota (Pilkington, 1998c). Honda use batch processes differentiated from Toyota’s process type.

The following features show the transformational processes (Honda, 2010d):

Stamping

Welding

Shipping and export

Quality assurance

Instrument panels

Plastic injection molding

Painting

Testing

Assembly and sub-assembly

Shipping to the store and will be purchase by customers

Honda transformational processes are similar to Toyota’s processes, but they are supported by more raw material stocks and a planning system which is fixed up to six months in advance (Pilkington, 1998d). As it can be seen from comparing the Toyota’s processes that in stead of sending the vehicle to paint shop Honda ships and export the vehicle and several processes are implemented at that point. As a result of this, Honda seems to ensure the quality of vehicle efficiently so that they can meet customer satisfaction with respect to all of their products and services.

Product Layout

To manufacture a large amount of vehicles when it is required, the layout of the assemble line is critical to the factory. Honda initially aimed at helping manufactures by making their mass production system run better with superior layout (Helper and Kiehl, 2004). Thus they improved the efficiency of producing the vehicles at given time.

Operations Management concepts / theories / techniques underpinning these transformation processes at Honda

4Vs at Honda

The reason why 4 dimensions are used is to point out the difference between Toyota and Honda through this analysis.

Volume – High volume due to the high demands from customers.

Variety – It could be low for Honda because they try to keep down processing costs.

Variation – Ongoing orders seem to happens at Honda, therefore variation is low

Visibility – Activities at Honda factory are rarely seen from customers so that low contact tasks, therefore visibility is low.

Contrasting each 4Vs with Toyota and Honda, it thus can be assumed that both companies have similar operations in order to sustain the ability to reduce costs.

Purchasing Policy

With the power of economies of scale, Honda purchases their row materials from parts suppliers in large quantities (Wasti, 2008). This leads to the fact that they enable to reduce the associated manufacturing costs and increase productivity

Conclusion and Recommendations

This report has shown that both Toyota and Honda have used the similar method of operation at factory. It can be seen that numerous similarities such as processes type, the 4Vs operations and purchasing policy. It is difficult to find the difference between Toyota and Honda’s operations of two organisations, however in the transformational processes, Toyota moves the vehicle to paint shop line straightaway after the process of stamping shop, whereas Honda ships and export the vehicle as well as few more processes before it is painted.

Both companies have tried to purchase materials as low price as possible. However there are certain things that need to be taken into consideration here. Honda’s purchasing power is based on economies of scale which refers to the financial advantage of producing vehicle in very large quantities, because cost per material is lower, whereas Toyota is using a monopolistic power to purchase materials which emphasis in controlling or trying to control materials. Even though both companies are trying to reduce costs, there is a slight differentiation of relationships with the suppliers.

Multiple regression analysis revealed that both Toyota and Honda provided the same basic operations according to 4Vs. Most notably, they are trying to minimize costs as row as possible as well at the section. It seems that the most vital things at operation is how to reduce the operation costs.

As noted earlier that Honda differentiates from Toyota transformational processes. Honda establishes its vehicles in large batches to a schedule which is fixed six months before. It is therefore likely that Honda’s methods of processes are especially suited in this current market.

Recommendations would be the followings:

According to overall analysis both company should focus on more environmental factor such as reducing carbon dioxide from the factory.

Should use more technology to reduce cost of labours

If Honda loss a key supplier, it may affect the capacity and increase the cost, therefore supplier relationships are vital to keep good relationship.