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OPERATIONS AND LOGISTICS MANAGEMENT.

 

Managers of many organizations are nowadays faced with an assortment of complicated communication as well as information technologies coupled with cut-throat global competition. These factors threaten the existence of their organizations and as such they must be prepared take drastic and decisive decisions such as making big bets and taking big risks which must be managed strategically in order to make sure that these organizations survive the increasingly fierce competition in the global market. Corporate strategy assists managers by presenting them with the most recent methodologies that are suitable for use in developing and implementing workable strategies for their organizations (Saloner, Shepherd, & Polony, 2006, pp.62-107).

Drawing from appropriate conceptual frameworks as well as real life examples, managers or such other people involved in corporate strategy and operational management must have the appropriate knowledge that will enable the to develop business, corporate as well as functional strategies besides managing the merging of strategy with technology (Matthew, 2008, p. 34).

Technology has greatly changed management by offering flexibility in the available strategic positions and operational management. These technological advancements have influenced changes in operational management and are opportunities for increasing productivity and as such do not shift the strategic direction of the organization, leading to a strategy based on value. An operations strategy that is supportive to the company’s organizational strategy gives the company a competitive advantage in the global market (Roth, 2008, pp. 61-74).

 

The top priority of Toyota Corporation’s operation organizational strategy is to ensure a steady increase in terms of corporate value in the long run. In order to realize this goal, the corporation has made the necessary efforts in building business – friendly relationships with its stakeholders who include customers and shareholders, local communities, business partners and employees. The corporation’s conviction is that products that cater to the needs of the customers will enable them to achieve a stable and long – term growth.

In view of this situation, the corporation seeks to strengthen the field of corporate governance – which is their corporate strategy wing – by way of putting in place a variety of policies aimed at further enhancing its capacity as a worldwide corporation. Corporate strategy assists in giving the company direction as well as the scope the organization takes in the long run (Kazmi, 2008, pp. 28-41).  This is advantageous because resources are configured within an otherwise challenging environment hence ensuing that the organization meets market needs and that it fulfils stakeholders’ expectations.

          Toyota Corporation has put in place some basic approaches to harmonize the operations management department with the corporate strategies department in a bid to ensure that these two departments work in good relationship with a view to achieving its goals of being the global leader in the motor vehicle industry. The corporation has introduced an improvised system of corporate strategic management whose focus is on prioritizing on prompting decision making aimed at developing their global strategy as well as hastening operations. The corporation has an in –  house long- standing councils and committees that are charged with the responsibility of monitoring as well as discussing corporate management activities based on the viewpoints of their stakeholders. They do this in a bid to ensure that there is a heightened transparency besides fulfilling social obligations.

The international motor maker’s corporate strategy includes a culture that puts great importance on solving problems and taking preventive measure so that they give the right information to the operations management department which translates these decisions into production. This is to say that these two critical areas work hand in hand in the company’s endeavor to satisfy customer needs. The operations management department on its part has the approach of building in quality using the manufacturing processes and also through the enhancement of quality of the operations of every day besides the strengthening of corporate governance. When it comes to the area of operations management, the management team and its workforce conducts operations and makes decisions that are founded on a common system characterized by checks and balances which are based on a set of standards of ethics that are very high.

Toyota Corporation’s management system has an appropriate way of ensuring operational functions work hand in hand with those of strategic management to ensure a coordinated workforce that meets the set production targets while maintaining very high quality standards. The current system of management encompasses a wide range of operational functions throughout the entire production workforce, the directors who in this case are the chief officers and they serve in the capacity of the supreme authorities of the precise operational functions whereas non – board managing directors serve the purpose of actually implementing the operations.

2. Critical evaluation of ways in which Toyota operates in the area of corporate strategy and operations management.

Toyota Corporation’s operation and strategic management teams are quite distinctive, a system that has its basis on the corporation’s philosophy and policy as well which emphasizes developments where the actual production takes place. This system is very effective in making sure that when it comes to on – site operations, the management makes decisions directly following the opinions of on – site personnel on issues to do with strategic management and they swiftly implement them into actual operations management decisions.

Toyota Corporation has an auditor system that is used for monitoring the management. This monitoring system has its basis in a law known as the Japanese Corporation Act. The corporation’s auditor system has four external auditors whose duty is to ensure that the corporate activities are transacted in a transparent manner. Toyota has crafted an advisory board to ensure that it has a system of appropriate management. These two – the external auditors and the advisory board – are the bodies that the Toyota corporation has put in place to act as neutral agents for evaluating the corporation’s corporate strategy and the operations management departments.

The board of advisors, which operates under the name International Advisory Board (IAB), is constituted with about ten advisors who are distinguished. They are all drawn from foreign countries so that the corporation can ensure fair evaluation of these two important sectors. These advisors have vast knowledge in various fields such as economics, politics, the environment and business as well. On issues touching on business, Toyota seeks advice from these members who are supposed to give the managers workable ideas on a universal perspective.

The corporate strategic management department of Toyota Corporation undertakes drafting, implementation and evaluation of decision making which in this case is a cross – functional process. This is done with a view to enabling the achievement of the corporation’s long – term objectives (Porter, 2004, p.98). The corporate strategists of Toyota specify the corporation’s mission, vision as well as its objectives. It also develops plans and policies in the context of programs and projects all of which are crafted with a view to achieving the set objectives and also to help facilitate the allocation of resources towards the implementation of the laid down plans ands policies as well as programs and projects.

The corporate strategy management department of Toyota Corporation uses a scorecard in the evaluation of the company’s overall performance in the business sector. It also evaluates the company’s progress which is geared towards the achievement of its objectives. The scorecard that the Toyota Corporation’s strategic management uses is always balanced so as to make sure that there is fairness in the evaluation of all the concerned sectors.

The corporate strategy department of Toyota Corporation, just like any other major global corporations and organizations, concerns itself with the setting of goals as an activity in management. This department also assists the corporation in providing it with the most suitable tactics it should use in the area or operations management. Some departments such as production and marketing fall in the area of operations management and they are therefore the biggest beneficiaries of the overall direction provided by the corporate strategy management team of the organization.

The corporate strategy and the operations management teams are linked together in a working relationship which operates in terms of alignment in strategy between the corporation and the immediate environment. The corporate strategy is evaluated in terms of its consistency with reference to its application on the running of the operational functions of the corporation.

In the evaluation of the organization’s corporate strategy, one important factor of consistency in strategy is considered. This consistency in strategy occurs when the corporations’ actions are in consistency with what the management expects. This acts as a pointer to the fact that for everything that the company undertakes to do, it must ensure that it is consistent with what the operations management expects. In the absence of a consistent strategy, the corporation will automatically operate at a loss because production has to match demand. The goods thus produced have to be on time as well. The organization’s corporate strategy structure includes technocrats and stakeholders so as to ensure all the possible areas of weaknesses are taken care of in order to avoid any shortcomings in operations. This structure of organization is very effective as it ensures coordination between the corporate strategy department and the operations management leading to an increase in production and an effective marketing team.

In terms of evaluating the performance of these two interrelated departments, Toyota Corporation does it in a continuing process to evaluate and at the same time control the areas that the corporation involves itself in such as business as well as industries. In this process, the corporation does the assessment of adherence to its set goals, the organizations it competes with and the relevance and effectiveness of the laid down strategies. The assessment is done regularly so as to ensure that the corporate strategy and operations management departments are under constant evaluation to ensure efficiency and to seal any possible loopholes (Jakotiya, 2003, pp. 64-82).

The organizations that have the potential to offer serious competition are studied keenly and an appropriate strategy is devised to counter any of their maneuvers that could otherwise cut the company’s market share if left unchecked. In evaluating these departments and the suitability of their strategies, the corporation ensures a proper assessment so that it can be determined whether there is success and if not, whether there is need for a replacement by putting in new strategies that can meet the changing circumstances, emerging competitors, changing technologies and new environment in terms of economical, financial, social and political factors.

3. Ways in which Toyota’s operations add value to the diversity of goods and services.

The corporate strategy and operations management departments of Toyota Corporation function in a complementary way so as to ensure that there are no loopholes that can lead to failures in the manufacturing plant or in the marketing team as well as the logistics department which falls under the corporate strategy department.

The corporation has an organizational strategy of on – time delivery that works efficiently in making sure that waste is kept to the possible minimum levels if not done away with completely. This kind of delivery is facilitated by a well coordinated approach to the corporation’s manufacturing requirements by corporate strategy and the operations management teams. Each team plays its part effectively to ensure that anything that the manufacturing department needs is delivered on time (Kazmi, 2008, p. 89). The workers in the manufacturing plant are supplied with the materials that they require at the right time and as such no plant sits idle leading to increased production which is timely at the same time. The corporate strategy department makes sure that it organizes for the materials that are needed in the production plant are sourced and delivered just at the right time. The operations management on the other part does the necessary efforts to facilitate timely production of goods for the market so as to maintain customer trust.

There is a well equipped logistics team in the corporation’s corporate department which coordinates all the activities and makes sure that everything goes according to plan. All the raw materials are brought in time. The production team in the manufacturing plant on the other hand puts the necessary equipment in place so that there is no waste in terms of delays or improper use of materials that are used in making vehicles for example iron. This has led to increased productivity and therefore increasing the corporation’s profits. This is the organizational strategy that has enabled Toyota Corporation to become the world’s leading motor vehicle manufacturer.

 

4. Critical evaluation of the areas of operations management which need improvement.

Despite the fact that Toyota Corporation is the global motor vehicle manufacturing giant, there are some failures which can be traced to an oversight or lack of some crucial policies in the operational management department. One such area that needs innovation is the manufacturing plant. The corporation needs to make changes to the manufacturing plant so that it can meet the challenges of the ever increasing rate of change in technology. It is clear that for the corporation to withstand the emerging competition for state-of-the-art technology that is currently in use in the motor vehicle industry, they must come up with a new strategy aimed at producing a lot more sophisticated cars that meet the market demand (Slack, 2004, pp.12-43).

The managers in the corporate strategy department should commission its aesthetics team to come up with new and more appealing designs that can compete with the new models being produced by upcoming companies such as Chrysler and Nissan which have for some time now been slicing Toyotas market share. A reduction in Toyota’s sales has led to a decline in the corporation’s shareholder value ( Walters, 1999, pp. 125-142).

Considering the recent string or recalls of Toyota cars due to defects in manufacturing, a change of strategy in planning and production is urgently needed. The specific areas that nave been identified need a closer look as failure in the manufacturing of these vehicles has given an undue advantage to other manufacturers to sale their cars more than Toyota. The corporation has to invest more in technology so as to meet the ever changing standards to avoid more recalls which may be detrimental in the long run (Coopers, Lybrand & Strategic Risk Management, 2000, pp.53-94). This may affect the corporation in reduction of the total sales due to lack of customer confidence if the faulty areas are not corrected with speed and further defects prevented. The only way in which they can affect this is by equipping the operation department with the right apparatus so as to be able to detect anything that can lead to defects in the cars that they produce for example the steering wheel, brake peddles, and speed recorders which have seen fleets of some models recalled in recent years.

The corporation needs to undertake the process of taking its managers through refresher courses and exchange programmes. This is a very effective way of ensuring that the corporate strategists are well acquainted with the latest changes in technology and therefore improve on the necessary areas of production. For any automobile manufacturer to stay afloat in this highly dynamic industry, they must put in place a continuous process of evaluation. This is exactly what Toyota should do. They need to initiate a process of evaluating the performance of their new brands, some of which are in the category of recalled cars due to manufacturing defects. The strategy department must ensure accurate and timely information reaches the operations manufacturing plant in the right way and at the right time. Such a move will serve to ensure that the corporation takes to the market vehicles that suit their needs and which function to the optimum standards in order to retain customer confidence and beat their competitors as well as to increase profitability (Walters, 1999, pp.58-84).

Operations management should be monitored more closely so that the organization can make more progress in the production department. They must make decisions that reflect the immediate needs of the customers who in essence are the stakeholders in this company and who must be held as the most important people to the company. This gives the corporation a competitive advantage in the global market.

            The corporation’s operational strategy needs to be reorganized to meet the demands of the business world of today which is continuously reconfiguring. The management of risks as well as losses has been ignored by the strategic management of the corporation. Structures must be put in place so as to avoid taking the of unnecessary risks and losses the corporation has been experiencing of late as a result of the numerous recalls (Mentzer, Myers  & Stank, 2007, pp. 78-92).

            The managers should be put on an individualised evaluation process so that they can be more effective in execute their duties.

Coopers, Lybrand & Strategic Risk Management, (2000). Strategic risk management.

Universities Press.

Jakotiya, (2003). Strategic Financial Risk Management.Vicas Publication House pvt Ltd.

Kazmi, A. (2008). Strategic Management and Business Strategy. Tata Mgraw Hill.

Matthew, M, J. (2008). Business Policy And Strategic Management. Raj books and Subscription Agency.

Mentzer, J. T, Myers, M. B & Stank, T. P, (2007). Handbook of Global Supply Chain Management. Sage Publications.

 

 

 

Porter, M (2004). Competitive Strategy: Techniques for Analyzing Industries and Competitors. Free Press.

Roth, A, V, (2008). Handbook of Metrics for Research in Operations Management: Multi-item Measurement Scales and Objective Items. University of Minnesota: Sage Publications.

Saloner, G, Shepherd, A & Polony, J, (2006). Strategic Management. John Wilney and Sons.

Slack, N (2004). Operations and Process Management: Principles and Practice for Strategic Impact. Financial Times/Pentice Hall.

.Walters, D. (1999). Marketing and operations management: an integrated approach to new ways of delivering value: Department of Business. School of Economic and Financial Studies, Macquarie University, Australia. Vol. 37 Iss: 3