Operation Management of Toyota

Manufacturing
5/18/2020

Report On Operation Management of Toyota Manufacturing

Contents
Executive summary...............................................................................................................................2
Introduction of company.......................................................................................................................2
Mission, Vision and Objectives.............................................................................................................4
MISSION..........................................................................................................................................4
VISION.............................................................................................................................................4
OBJECTIVE......................................................................................................................................4
Product and Process Strategies..............................................................................................................5
Capacity Planning..................................................................................................................................5
Internal plant capacity review............................................................................................................6
Supplier capacity review....................................................................................................................6
Location and Layout Strategies.............................................................................................................7
Location strategy...............................................................................................................................7
Layout strategy..................................................................................................................................7
Inventory Management..........................................................................................................................8
Material Requirement Planning.............................................................................................................9
Human Resource Management............................................................................................................10
Supply Chain management..................................................................................................................11
Generalized supply chain model..........................................................................................................12
DISTRIBUTION STRATEGIES.....................................................................................................13
SUPPLY CHAIN INTEGRATION STRATEGIES........................................................................13
TECHNOLOGY & DECISION SUPPORT SYSTEM....................................................................14
In the supply chain, technology plays an important role in all parts, whether its logistics, order
planning, inventory management, (Im, 2011)..................................................................................14
Information Flow Chart.......................................................................................................................14
Manufacturing Process Map................................................................................................................15
Pipeline Mapping.................................................................................................................................15
Gap Analysis.......................................................................................................................................16
Recommendation and Conclusion.......................................................................................................17
Recommendations...........................................................................................................................17
Conclusion.......................................................................................................................................18
References...........................................................................................................................................20
Executive summary

All knows the importance of operation management in all kinds of manufacturing

organizations. The companies that plan their processes and operations have more probability
to succeed rather than those companies who do not plan their processes and operations. We
take the example of Toyota motor corporations in our report and try to develop the point,
although there is a lot of competition in the market, the company can make their name
globally. Toyota Motor Corporation has successfully developed its core competency by
focusing on innovation and efficiency in production and manufacturing facilities.

Toyota is the most successful organization from the last couple of years. As the modern
world cannot survive without the operation management, the organization needs to develop
healthy operation management, as it has concluded that those organizations have healthy
operation management system have more chances to become successful as compared to those
organizations that don’t have an operation management system in their organization

Toyota motor corporations use Just-In-Time strategy to reduce their cost and maintain their
highest quality products. Toyota also believes in a lean production strategy which is known
as “Kanban”.

Toyota has the most efficient process technology like planning, capacity management
planning, lean production techniques, location and layout strategies, human resource
management, supply chain; through which Toyota performs well in the market. Even
concluded that effective supply chain management not only helps in cost reduction but also
participate in value addition to the customer by supplying good quality of material at a
minimum price.

Toyota is a master in using space, capacity and also providing the highest possible quality, so
it would be the best example to explain the operations management technique.
Introduction of company

In 1993, Kiichiro Toyoda has found the organization as a side project of his father’s
organization TOYOTA industries, to make automobiles. In 1934, the company produced
“Type A engine” which was the company’s first product and produced “TOYOTA AA”
which was the first passenger car by Toyota in 1936. Now it is one of the most dominating
bodies in the automobile industry and also a multinational organization. It is the largest
conglomerates in Japan. Toyota bought some companies as well; it owns them and operates
them as well as Lexus, Hino motors, Ranz, Daihatsu. Toyota also owns shares of the Subaru
Heavy industry, Yamaha, Mitsubishi Aircraft corporations, and Isuzu[ CITATION glo \l 2057 ].

Toyota is a well-known company and has global fame because of manufacturing high-quality
cars, and ranked as 2nd largest automobile manufacturer in the world after Volkswagen, based
on 2018 unit sales, and ranked as the largest automobile manufacturer in Japan. Toyota is
known for providing reliability, durability, convenience, comfort, and safety to their
customers.

Toyota is also one of the best companies that are playing with a hybrid in the market. The
first time in Japan in 1997, Toyota launched its first hybrid car which was Toyota Prius. In
2000, Prius was launched in the rest of the world. Now Toyota’s journey has reached in the
hybrid market where it has, the rage of models from a single model- Prius to 44 models in
hybrid market[ CITATION TOY \l 2057 ].

Toyota is also contributing a lot on social welfare. Toyota divides its social duties into three
categories:

1. Improve traffic safety

2. Social contribution
3. Communication with society[ CITATION Dea11 \l 2057 ].

Toyota also maintains the standards of its stakeholders like customers, business partners,
employees, environmental entities, etc.

Domestically Toyota has four production systems, Motomachi, Takaoka, Tsutsumi, and
Tahara. Each plant has different production systems, which contain different operation
management system[ CITATION You17 \l 2057 ].
Quality of product in Toyota is inspected under the supervision of operation management of
the organization. Mainly operation management in the department in Toyota is responsible
for insurance of efficient business operations. Operation management of Toyota is also
accountable for the efficient management of the resources as well as the distribution of
products. By adopting the different techniques, the operation management of Toyota motor
corporations helps in enhancing the production performance like Just-In-Time, leaning
manufacturing, total quality management, etc. The major and noble activity of operation
management in Toyota motors is to operate the supply chain management. Toyota motors are
combating the high level of pressure for producing improved high-quality products in the
international market. As Toyota motors adopt the Just-In-Time concept, it helps the Toyota
motors to eliminate the waste which leads to a reduction of storage and setup costs. Day by
day Toyota motors is increasing their efficiency and effectiveness in their operational
functions by using different operational management techniques.

Mission, Vision and Objectives

MISSION

"To attract and attain customers with high-valued products and services and the most
satisfying ownership experience in America[CITATION toy1 \l 2057 ]."

VISION

“To be the most respected and successful enterprise, delight customers with a wide range of
products and solutions in the automobile industry with the best people and the best
technology[CITATION toy \l 2057 ].”

OBJECTIVE

 Toyota’s basic objective is to maintain an economic atmosphere by contributing a

sustainable development in the economy and by providing innovative and quality
products.
 Toyota motors corporations have the objective to produce, sale, lease, and repair
of motor vehicles, industrial vehicles, ships aircraft.
 Toyota motors corporations have an objective to produce, sale, lease, and repair of
industrial machinery
  Toyota motors corporations have an objective to produce, sale, lease, and repair of
electrical machinery
 To gain a competitive advantage in the market full of competition
 To manufacture quality products
 To attain customer satisfaction

Product and Process Strategies

Toyota is always known by its innovation and attract their customers by their concern for the
environment. Toyota is always a leader to innovate and develop new products and
manufacturing. In many industries Toyota has set a benchmark for different firms. Toyota has
invested years for development and research to produce new products concerning design as
well as technology[ CITATION Jam06 \l 2057 ].

After world war II, when there was a time of improvement when the production rate was too
low then Ohno “vice president of Toyota” research for the methods that Toyota can perform
brilliantly after adopting that strategy. Then they discover the lean process strategy which
results more with less and also eliminates the waste. Toyota’s production system follows a
“lean manufacturing system” and “just in time” systems. Lean manufacturing system which
Toyota follows, “focuses on the creation of value and the elimination of waste [ CITATION
Muh11 \l 2057 ].”Toyota also introduces the new manufacturing process which is known as
“GBL”. GBL is a concept that allows producing different models on the same product line
which leads to improvement in efficiency and quality[CITATION daw05 \l 2057 ].

Toyota believes to minimise the cost and waste of time so they identify some non-value
manufacturing wastes like overproduction, over-processing, excess inventory, etc.[CITATION
lik03 \l 2057 ]. Toyota believes that these non-value manufacturing will lead to excess cost,
time-wasting, extra labor, extra material, extra transport, extra warehouses to store their
inventory which all raise the cost for the company. Most of the organizations want to reduce
their costs and increase their productivity however they are only words but Toyota has made
these words possible with strategy using TPS which only concerns to cut all extra costs
including warehouse cost, outsourcing cost, time delay, over inspection cost, etc. and
accomplish the market demands with the best quality of their products.
Capacity Planning

The supply chain must have to maintain the balance between demand and supply. The
capacity of every trading partner in the product distribution flow of the supply chain must be
compatible. This approach is not favorable that suppliers made promises even when they
don’t have material[ CITATION Joh00 \l 2057 ].

Capacity planning is the process of measuring the capacity of production that an organization
needs to hit its demands of product[ CITATION ana09 \l 2057 ].

Toyota capacity planning consists of two phases

 Internal plant capacity review

 Supplier capacity review

Internal plant capacity review

Toyota always not believe to lay off their employees so Toyota most of the times hire
temporary employees to support their normal production system. The purpose of internal
capacity planning is to evaluate the lower and upper limits of operations in the organization
of every product.

Toyota issued an active and very smart step to solve the problem of capacity issues. For
example, If they have a low demand for their products then they reduce their number of
temporary employees to reduce their cost and continue with their permanent staff. On the
other hand if the demand for their product increases they hire more temporary employees to
manage their production capacity system[ CITATION ana09 \l 2057 ].

Supplier capacity review

To maintain the supply chain, both internal capacity, as well as supplier capacity, must be
evaluated as it is the combined responsibility, to identify any kind of restriction in supply
purchasing and production control need to work together.

If the primary supplier of Toyota has any problem, they always have some backups. Toyota
also sustains a dual-source because there would some risk that can restrict the supplies
because of the supplier’s location.
Location and Layout Strategies

Location strategy

Toyota is the global producer of automobiles, so Toyota has to maintain strong strategies
because macro-environmental factors also influence, so they keep strategies smartly which
helps them to shine globally.

Toyota use three location strategies

 Global location strategy

 Regional location strategy
 Local location strategy

As Toyota wants to expand in global market, it has worldwide manufacturing and production
plants, so Toyota involves in setting up their operations outside the home region that report
directly to the home base, as it has its headquarter in Japan, also Toyota focus on local
location strategy by localizing its manufacturing plants in different areas, for example,
Toyota localized its manufacturing plants in US, China, Thailand.

Layout strategy

Layout of Toyota plants base on the concept of lean manufacturing principles. So they follow
product-oriented layouts

Product-oriented layout has some advantages like:

 Low variable cost per unit[ CITATION NSu15 \l 2057 ]

 Low material handling costs[ CITATION NSu15 \l 2057 ]

 Reduced work-in-process[ CITATION NSu15 \l 2057 ]

According to the TOYOTA, machine layout must be so efficient so that it leads to smooth
production flow. Therefore Toyota believed in multi-process handling which designed its
layout in a way that each worker can deal with three types of machines at the same time. This
layout results “one-piece production”, in this process one worker, as performing many tasks
at the same time, worker perform their tasks one by one, they finished their first task then
move to the second and then towards the third one within specific task time, which results
from the completion of finished product[ CITATION Yas12 \l 2057 ].

Inventory Management

In Toyota motor, if the firm realized that inventory is enough for the current specific time,
then the entire extra inventory will be eliminated from the frim, stores, and warehouses would
be clean to save inventory cost. Through this process limited material has to prepare, which
can withdraw as it produces, this method is also known as pull-system [ CITATION Yas12 \l
2057 ].

To increase efficiency, Toyota motors adopting Just-In-Time (JIT) strategies for the past 2
decades. JIT is the main attribute of its new production management system of Toyota motor
corporations[CITATION ImJ89 \l 2057 ].

Just-In-Time is the concept that says produces a limited number of products in a specific
number of quantities with specific limited time[ CITATION Yas12 \l 2057 ].

JIT is maintained by Kanban system, launched by Toyota motors, the Kanban system is an
information system which tells about the quantities of production of every process [ CITATION
Yas12 \l 2057 ].

You can find inspiration in the least likely of areas. Toyota production system, which is also
known as TPS, is come during shopping at a super mall. The idea about that system was
generated by analyzing the vending machine. This machine had a simple process of replacing
the product with those that were purchased. The product system if Toyota is also known as
“Just in Time” production. And this system was created by the founder of Toyota and his son.

TPS wants to get a solution of getting overburden and inconsistency. It also needs to get rid
of the waste as well. To decrease down the overproduction and correction, this system of TPS
is introduced. The most unique system of TPS is the small lot production [ CITATION Kry10 \l
1033 ] This allows Toyota to start a lot of new low-cost start-ups and less expensive. It gives
Toyota the freedom to produce different items and products on a small scale.

There is another principle known as “Pull Production” that lies under the Toyota Production
System. This process helps in cutting down the holding cost of inventory and decrease the
lead time also. This idea is developed by Toyota to strictly determined the quantity of work
which is performed at every stage in the development process. These techniques and
processes are mimicked in different industries globally. There is also a major component in
the JIT which is called Kanban. This technique is used for work and shipping of inventory. It
was originally developed and introduced by Toyota in 1950 to manage the flow of material
on the assembly line.

Material Requirement Planning

Material Requirement Planning is a software that is used for production planning and for
controlling the inventory system which is used to manage the manufacturing process.

The most critical input for the Toyota MRP is the invoice of material. BOM is a wide range
of lists about components, parts, and raw materials for manufacturing or repairing. In Toyota,
the relationship between the independent demand and the dependent demand of components.
If we talk about independent demand, it is solely generated outside the company or
manufacturing unit. And the dependent demand about the components and parts are created
inside the Toyota’s manufacturing plant. Strategically, companies need to manage their
purchases concerning types and quantities; the plan which product and in what quantity
would be produced; and believe that they would meet the present and future customer
demands, all procedure occurs at a possible lower cost. Low inventory levels in companies
are maintained by Material Required Planning. The company can lose money by making any
kind of bad decision in the production cycle. Manufacturers can better manage their
production according to the rise and fall in demand just by maintaining the appropriate level
of inventory. One of the best advantages of Toyota by MRP is it can juggle delivery timings
and to lead times more efficiently. It is very difficult for the managers of automobile
industries to keep an eye on hundreds of parts that are moving from one place to another. But
Toyota is using the MRP system that makes its production system more efficient.

In the MRP, there are three major inputs to the MRP system. The first input is Master
Production Scheduling. This MPS system is used to deal with the end items which are
finished goods. The general range of operation is provided by the aggregate plan. With the
help of MPS, it is known about what needs to be produced rather than what can be produced
and when to be produced. The second major input is BOM know as bill of material as stated
before. This contains the list of raw materials, parts, components, and other materials. Also, it
provides the sequence of these materials through which the product would be manufactured.
The third major input is the inventory record file. It contains three types of different
information. First, it contains information about every product which is manufactured.
Second, it contains data about the ordered items and the last information is about the
inventoried units[ CITATION Ian96 \l 1033 ].

Human Resource Management

The human resource management department of Toyota motors play a vital role in the
development of their employees and makes them a useful asset. As the Human resource
department is responsible for developing the employees of operations in a firm so HR
managers also must be skilled in operations.

Companies have to know that how to transfer knowledge from seniors to junior, how to share
the knowledge and experience from a skilled person to knowledge person. To deal with that
kind of issue, organizations must have to focus on the human resource development program
to entertain the employees with knowledge and skills. The most important thing that is
concerned with this perspective is proper communication. By maintaining the proper
communication, knowledge can be transferred easily. HR creates a platform for proper
communication and maintains the Human resource development programs and knowledge
management[ CITATION Rey14 \l 2057 ].

To target the training at specific interpersonal skills, the Human Resource of Toyota Motors
is highly favorable in selecting the team leaders that also enhance the person management
skill and public management skill of team leaders.

As Toyota is based upon lean management which only purpose is to eliminate the cost but
apart from that Toyota also concerned about the quality of their products. Toyota could not
compromise in its quality products. Thus the tool named as TPS is designed to solve these
kinds of problems, this tool helps the organization to strengthen their system.

Toyota’s HR department plays a tremendous role in employee recruitment and their

screaming. Toyota finds people who are willing to learn and want to develop themself; they
don’t prefer technically skilled persons because they believe to train their employees by
themselves.
Toyota is one of those organizations who’s Human Resource department manages all the HR
functions amazingly like compensation and benefits, employees and labor relation, safety,
and health.

Compensation and benefits cover salaries, bonuses, sick leaves payments etc. and the HR
department of Toyota motor corporations take the responsibility of developing and
administrating the compensation and benefits.

As Toyota is a multinational organization, organisation has to face a lot of diversity on their

workplace like gender diversity, race, religion and further issues like harassment, religious
discrimination, race discrimination, sexual abuses, etc. Toyota’s HR department is concerned
and takes action and tries to maintain the discipline and decorum of the workplace.

Toyota motors corporation concerned about the physical and mental health if their
employees. They also provide additional facilities to the family of their employees by
providing them medical treatments.

Supply Chain management

Effective supply management is very important in today’s world; it allows the company to
respond faster to the external world as compared to their competitors.

Required functions of supply chain management is

 To monitor all the suppliers throughout the supply chain

 To manage total supply chain inventory
 To maintain the standardization of raw material and production function

Especially in the electronic components, organizations have to combine direct control on

these functions[ CITATION Aut15 \l 2057 ]

Toyota much of their time to evaluate its suppliers to maintain long term, sustainable
relations with their suppliers. Toyota regularly assess their suppliers to evaluate their quality,
reliability, and cost. Toyota reduces its cost throughout the supply chain and then shares their
profits with their suppliers.
Toyota has developed an entirely low-cost supply chain; the whole proposes to reduce the
cost but Toyota never compromises in the quality of product, reliability of product, customer
satisfaction, delivery time.

The objective of supply chain management of Toyota motors corporations is to place the right
product at the right place in the right quantities to the right customers at the right price.

To sell cars in entirely different regions, Toyota has developed dealers all around the world,
which operated different strategies, according to their region and culture of the targeted area,
to capture the local needs of customers.

Toyota motor corporations is one of the model companies in the world that have driven
successful businesses and conducting successful business practices, including supply chain
management.

Toyota’s suppliers are generally within the 56 miles radius. Toyota has a supplier partnership
hierarchy in which Toyota develop, maintain, and sustain their relationship

Toyota has high coordination throughout the supply chain, which results in very productive.
Coordination between the supply network results in high performance throughout with the
flowing mechanism.

Generalized supply chain model

Generalized supply chain model, link and make connections between firms and distributors,
suppliers, logically and logistically.

Generalized supply model involves

 Receiving the orders of customers

 Establish a network of warehouses
 Carry product to the customers
 Arrange an invoicing system of received payments
There are a few supply chain strategies. These strategies help to achieve the goal

DISTRIBUTION STRATEGIES

Toyota has one distributor in each country. The air, roads, or sea is used for distribution. In
distribution strategies, which logistical method should be used to transport the product from
the warehouse to the showroom?

Out-bond logistics is also the part of distribution strategy because the out-bound logistics is
responsible for distributing the final product to the retailer.

SUPPLY CHAIN INTEGRATION STRATEGIES

this strategy tells us about the which type of information should have to share and how
information should be shared, it is difficult to apply integration strategy because every partner
have a different mean of interest, but Toyota always maintain their relationship with their
suppliers.
TECHNOLOGY & DECISION SUPPORT SYSTEM

In the supply chain, technology plays an important role in all parts, whether its logistics,
order planning, inventory management, [ CITATION ImJ89 \l 1033 ].

Information Flow Chart

Manufacturing Process Map

Pipeline Mapping

Toyota wants to use an extremely lean type supply chain but that would be analytical for the
production control manages to understand the position of the entire inventory in the pipeline.
We can define the parts pipelines as those parts which are ordered from the suppliers, but
these parts have not been unloaded at the endpoint known as the receiving plant.

There are number of methods to follow the parts during the way of the pipeline which is used
by Toyota. This process is started with the order of products this is delivered by the mean of
Electronic Data Interchange (EDI). And a Kanban bar code label is also put to the shipping
container of parts. The supplier sends a notification when the parts are shipped. This is called
an EDI Advanced Shipping Notice (ASN). The truck driver examines the Kanban
standardized identification name and recognizes the truck in which the portions are stacked.
When the truck shows up and is emptied at the cross-dock, the status of the parts is
transformed to show landing in the cross-dock. Once more, as parts are stacked on another
truck destined for the plant, trucks are checked and connected with their truck numbers. As
the truck enters from the entrance at the plant, the status of the parts is refreshed to express
that the parts are in the plant yard. The trailers stay in the yard to ensure the progress,
progress guides that they ought to be discharged at the dock. As the parts are drained out,
every section is checked to confirm the landing in the plant. Pipeline data empower Toyota to
have an eye on the parts pipeline. This pipeline database is particularly significant at
whatever point there is an emergency, for example, parts lack, short shipment, or delay in
transportation It is subsequently evident that assumes a key job in the administration of the
arriving parts coordination process. A portion of the measurements used to screen inbound
coordination are percent of cubic limit used, amount of victory loads, on-time pick up and
conveyance, and real mileage versus plan.

Gap Analysis

Gap Analysis is the way to analyze the difference between what the company wants to sell
and what the consumer is receiving. A gap between the standards and the delivery of those
standards is discussed in gap analysis. Before doing a gap analysis, it is recommended to do a
before and after analysis. Gap in Toyota has been analyzed and discussed.

The Toyota production system is too much cost consuming. It needs a significant change to
reduce the cost and make it cost-efficient. Many new and improved production systems are
used by world-leading automotive industries. Toyota needs to introduce a new cost-efficient
production system to achieve a low-cost goal. For that purpose, Toyota needs to dismantle the
previous system. And at the same time, it needs to train employers to use the new production
system sufficiently.

Toyota wants to use the method of Just in Time for its inventory. But there is a gap found in
it. Toyota keep a very small amount of inventory in hand in lean manufacturing. It also faces
a delay from the suppliers. Sometimes, the interruption is also faced due to suppliers.

Toyota has been working in the development of green technology for its automobiles. It has
launched several cars that are based on green technology, but it has failed to understand and
find its actual market. There is a market of China and India for this ecosystem cars, and there
is a potential customer available. But Toyota has failed to show its strong presence in the
emerging markets of China and India despite the opportunity for growth. Toyota does not
cover this gap but still there is time to capture that market.
In the last few years, the number of vehicles was undertaken by Toyota. This type of activity
has hurt the company financially and creates negativity in the consumer mind. So, a gap is
created in the level of brand equity. At the same time, Toyota has also lawsuits for the failure
of vehicles, which also caused the same damage to company reputation. To overcome the
gap, Toyota needs to decrease the higher recall rates.

Company has to create strong appearance in emerging markets like India and China where
fuel-efficient and green vehicles would be demanded but don’t have that much appealing
presence in those markets but they have opportunity in those areas. Asian market is most
appealing market for Toyota right now, as their competitors is weaker share in those markets

Companies can grow a lot by focus on their customers around the world as they show high
interest in hybrid and electic cars as cost of petrol is raising day by day and carbon emission
become very harmful for whole world and becoming a large alarming danger.

Toyota has to introduce some new models as well, as it has been observed that consumers
taste is changing day by day. People need something new which satisfy their needs.

Apart from technology, Toyota have market in motorcyles and marine products and also they
are financially stable there, so Toyota can invest in diversified portfolio of products and
services in new area and can build their image in that area.

If Toyota made priority in autonomous vehicle technology, it can bring great result for
Toyota because this technolgy is attractive for vehicle brands all around the world. By
investing in this area it would bring Toyota to another level.

World is moving to more efficient and environment friendly mode. Price of oil is becoming
higher over time, despite the period of Covid-19. Most of the customers are looking for those
cars that are more eco friendly and fuel efficient. So there is a gap that must be covered by
Toyota. Toyota need to must continue to manufacture fuel efficient cars or also develop
hybride and electric cars as well. In future, car will use electricity instead of petrol. So, to
maintain customer equity, Toyota must works on the development of electric mode of car.
Toyota has set goal of selling more than 5 million electrified vehicles by 2030, up to which
about 1.6 million cars are sold. So Toyota need to achieveits goal by filling gap.

Recommendation and Conclusion

Recommendations

There are few recommendations for Toyota to sustain its business. Toyota needs to work for
strengthening the management platform and try to raise its corporate value. Toyota needs to
revise its business and cost structure for an effective management platform, which makes
them able for responding quickly in the changing business environment. Toyota must reduce
the fixed cost and increase its business expansion in the emerging markets of developed
countries. This will help in maintaining the streamlined structure.

There are few recommendations for Toyota to sustain its business. Toyota needs to work for
strengthening the management platform and try to raise it corporate value. Toyota needs to
revise its business and cost structure for an effective management platform, which makes
them able for responding quickly in the changing business environment. Toyota must reduce
the fixed cost and increase its business expansion in the emerging markets of developed
countries. This will help in maintaining the streamlined structure. The expansion of business
would be beneficial for Toyota in the developing countries. This expansion can be done by
analyzing and monitoring the condition of respective areas and by delivering those products
that are needed and suited for each market. There is also a need to strive to establish very
efficient production and supply structures for the delivery of optimum product delivery and
price and to provide unique customer services in each region by enhancing the value chain.

Lexus should consider as a priority in the emerging market of China. That will make it able to
penetrate the market by making it a competitive advantage. Similarly, Toyota will be
empowered by creating more manufacturing units in Asia, that will cause less expensive
channels and become nearer to the developing business sectors. To give more authority to the
engineers regarding answering the need of customers and designs of the cars, Toyota should
eliminate the middle layers of management. Toyota needs to pursue advancement in the
usage of eco-friendly technology and less energy-consuming products and at the same time
delivering the functions and services to the customers globally. In three different business
units, it should need to aim for excellence. Firstly, Toyota should try to find solutions in the
field of material handling equipment and the logistics industry. Similarly, it needs to grow in
the key components in the area of car electronics and air conditioning compressors of cars as
well. And lastly, the mobility in the field of engines and vehicles. By enhancing the diversity
and power of the workplace, Toyota can support the consolidation of management globally.

By manufacturing the more fuel-efficient car at a low price, Toyota can capture the huge
market of the US. It also needs to support industries and social corporations internationally
by delivering products and its services that will make customers more loyal to the brand.
Conclusion

Toyota managed all operation management tools very effectively. The process technology
that Toyota applies in its organization follows the continuous flow of production. And how
Toyota designed layout, is very effective, easy employees can manage to deal with multi
machines for single products.

For capacity management, Toyota utilize optimal space very smartly, each machine can
perform with its high capacity. Toyota manages its inventory by using the Just-In-Time
approach, which indicated that Toyota is more concerned about the quality of their product .
The world had never seen equipment-space capacity, but there was Toyota who has not just
designed that system but also improved that system and now even today improving the
system. Toyota developed this concept just because that is way too hard to control and run
large batch size due to constraints of space, so that Toyota just developed the small-batch
production system with the U shape arrangement of equipment, Toyota placed equipment too
close, so that one employee can operate multiple machines at the same time. So the results
which we have concluded that organizations can also operate premium with less space than
traditional systems and operated with less capacity with more efficient results and become
more responsive than traditional manufacturing operations.

However, Toyota uses lean manufacturing approach, which is the ideal model for many
organizations but they are unable to apply them in their organization; Toyota is the company
which makes it possible to happen and apply lean manufacturing approach in its organization
and reduces all types of extra cost and increase its productivity without compromising on the
quality of product and customer satisfaction. The lean management system has become the
purpose of Toyota to achieve a competitive advantage in the international market. As a lean
manufacturing system helps in the improvement of financial performance but also lean
manufacturing management reduces human efforts by 50%.

Suppliers of Toyota Motor corporations also perform an important part, Toyota believes in
supplier relationship management. So it takes a lot of time at the beginning of their supplier
contract. Toyota believes to make a solid relationship with its suppliers so Toyota has
developed long-term and highly profitable partnerships with its suppliers over a time of some
decades. All kinds of times, either good or bad, Toyota and their suppliers have faced all
issues together. Toyota has built a bond of trust with its suppliers which brings strong and
close relationship building.
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