Professional Documents
Culture Documents
1. Management issues in this case: a. Planning Toyota grew from a family run business growing from carpentry to machinery business. As the business grew and expanded into the automobile business it became apparent that there was need to have plans so as to produce in a more effective and efficient ways. The visit to the Ford Motor Company in Detroit to study the US automotive industry by Kiichiro convinced him that there was need to have better plans to increase on the productivity of the company. This arose from the fact that he realized that the US workers productivity was nine times that of the Japanese worker. This lead to development of Just-in-time (JIT) within the Toyota Group. Through the JIT system, there was need for proper planning so as to ensure that the right parts were available at the right time. This planning element contributed greatly to the success of the JIT system. It was however evident that as the firm grew there was lack of proper planning especially in regard to what the future of the company was beyond the end of World War II. This lead to financial problems experienced by the company immediately after the war and which required them to be bailed out by a consortium of banks. This lead to the change in strategy by the company which saw them segregating functions and choosing other growth strategies such as expansion to other markets outside of Japan. Overall, the success of the JIT system is based on having well laid out plans and strategies that would ensure the firm is able to have the right part at the right time. Toyota capitalized on this and evidently developed innovative methods of ensuring that its production activities run smoothly right from the supplier to ensuring that customer demands were met in good time. This they achieved by having well planned operational strategies.
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DSM 501 MANAGEMENT PRACTICE ASSIGNMENT NO. 1 b. Organizing In the case of Toyota, it became evident that in order to survive there was need to change their organization structure to a functional structure. The end of the war meant that they could no longer sustain their business through sale of trucks and buses to the army, and as such they had to establish a separate function to aggressively market their new product i.e. the small cars. A functional structure was then adopted which would allow the different functions to focus on their core functions i.e. manufacturing and sales. The functional structure was important as demand was no longer certain and there was need to dedicate some efforts on sales.
c. Leading In leading managers are required to determine the direction and state a clear vision for employees to follow. In the case of Toyota, leadership played a key role in the success of the JIT system. Under Taiichi Ohno, the firm made great strides by expanding into new markets. The leadership was visionary and it helped the Toyota achieve success. The success of the JIT system depended greatly on employee participation. The success of the system at the Toyota group, even under different leaders, makes it evident that workers were highly motivated and had commitment to the company.
d. Controlling In regard to controlling, the Toyota JIT system required that waste was to be eliminated by ensuring that at all times the minimum amount of equipment, materials, parts and workers were utilized. The introduction of Heijunka is one of the ways that Toyota ensured that they had a consistent production volume. In this way the Management ensured that they exercised control on costs of production and that they took early corrective actions to improve on their performance.
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DSM 501 MANAGEMENT PRACTICE ASSIGNMENT NO. 1 The development of overseas production plants was another way that Toyota used to ensure that they maintained low production costs. Having entered into the North American markets it was important that they retained their low cost model and as such strategically placed themselves closer to their distribution channels. e. Implementation of flexible manufacturing systems In order to promote efficiencies in its production, Toyota developed flexible manufacturing systems. The adaptability the Toyota allowed it to successfully meet its customer demands at the least cost through optimal use of its resources. This shows that organizations need to exercise some level of flexibility so as to remain responsive to the demand by customers.
f. Culture: - Many companies outside Japan reported difficulties in the implementation of the concept. This shows that there were cultural aspects in Japan that promoted the success of JIT and which were not replicated in organizations outside Japan. Culture is thus seen to be a crucial component in the successful implementation of JIT systems in Japan as opposed to other implementations undertaken in other countries. g. Top Management Support JIT as a system affects a whole span of functions within the organization and its success must have required full support of the Top Management. The personal involvement of Taaichi Ohno in the implementation of Kanban, an essential component of Toyotas JIT concept, and the recognition of the element of waste by Fujio points to the factor that the success of JIT was directly attributable to the involvement and commitment exhibited by the Top management of the company. h. Education and Training the introduction of the JIT system required the workers to acquire new skills and an understanding of the Kanban system. This brings forth the importance of proper education and training of employees for any change to be successful. In the case of Toyota, the employees had to master the workings of
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DSM 501 MANAGEMENT PRACTICE ASSIGNMENT NO. 1 Kanban which evolved to into a sophisticated system that lead to the success of the JIT system. i. Motivation & Empowerment of Employees The success of the Toyotas JIT is also attributed to the presence of highly experienced and highly motivated managers. By delegating responsibility and empowering managers to oversee production, there is commitment and which in turn generates enthusiasm towards the success of a common goal. In this regard it is evident that motivation and empowerment of employees are essential factors in ensuring the success of operations in an organization. j. Total Quality Management (TQM) Toyota greatly stressed on the production of high quality products and continual improvement of its product. It is evident that Toyota recognized the need to consistently meet customer expectations by ensuring that their products were of high quality and that all employees understood the importance of quality production. This is also seen in the fact that one of the six rules of the Kanban system required that parts be 100 % defect free.
k. Change Management: - The implementation of a new system is often met with resistance by employees who may not immediately understand the direction of management. The introduction of a new way of work requires that Management communicates and sensitizes the employees on the need to change so as to avoid the possibility of strikes. Through participatory management, delegation of responsibility and team work it then became possible to successfully implement a complicated system like JIT.
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DSM 501 MANAGEMENT PRACTICE ASSIGNMENT NO. 1 2. Leadership Styles a. Okuda, Shoichiro Toyoda and Fujio The leadership style of the three above was more of transactional leaders. As leaders, they had key roles in ensuring that Toyota continued to grow. Their role was not very participative in the actual innovation of the JIT system but they were inspirational and supportive of the growth initiatives that were in place. b. Taaichi Ohno On the other hand, Ohno was a transformational leader who led by example. He is the inventor of the Kanban system and is credited with the implementation of JIT in Toyotas manufacturing plants having visited the US and observing the replenishment system of store shelves based on quantities picked by the customers. Ohno believed that customers should have high quality products in the shortest time possible and worked together with his managers to achieve this vision. He was a problem solver and worked actively to eliminate the problems of overproduction. Ohno was also a confident and optimistic leader who led Toyota through an era of great growth and expansion. He was able to seize the opportunity in the global markets and through this gained entry into the US and other major car markets. He recognized the need to adapt to these markets and developed a global network of design and research and development facilities in this way he had a huge role in penetration of these markets. He was a visionary leader who seized early opportunities and as such he championed the development of a vast network of overseas production plants from Brazil to Northern America.
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DSM 501 MANAGEMENT PRACTICE ASSIGNMENT NO. 1 3. Environment that Toyota operates in and similarities of operations at Toyota to a similar company familiar to you. a. Environment that Toyota Operates in: Highly competitive the environment that Toyota was operating in was highly competitive. Other automotive firms existed in US and Europe and these were directly competing with Toyota on the automotive market. Further, at the time Toyota entered the market these firms were far ahead and were already enjoying high productivity. Culture the Japanese people had a culture of collective orientation and this played a key role in the success of the JIT system in Japan as opposed to the other countries War the World War II provided Toyota with the perfect opportunity to grow in the automotive industry. In this regard Toyota benefited greatly from the war environment
b. Similarities of Operations at Toyota to a familiar company The case of Toyota can be equated to that of Safaricom. The visionary qualities of Taiichi can be equated to those of Micheal Joseph who took Safaricom through a great period of rapid expansion, product development and differentiation. Safaricom was able to get the right blend of elements to appeal to the consumers by ensuring that they had different product offerings for their different markets. The entry of Bob Collymore on the other hand has seen him focus on consolidation of functions and maintenance of those expectations that the firm had created for their customers. The entry of Okuda in Toyota saw him consolidate operations and focusing on safeguarding the bottom line of Toyota.
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