Toyota Operations Management

Toyota Operations Management

Introduction

Toyota is a multinational vehicles manufacturer whose headquarters are in Aichi Japan. The company has recorded a great market performance over the years making it the worlds sixth-largest company in terms of income. The company became the first automobile company to produce more than 10 million vehicles within the year 2012. It has also been the greatest producer of hybrid electric vehicles. The company has ventured in other cooperation holding 5.5% stake in Mazda, 5.9% in Isuzu and 16.6% in Subaru. The company stocks are besides listed in Tokyo stock exchange, New York Stock exchange and London stock exchange.

Toyota has been suffering a stake of loss due to various factors including natural disasters and market variations. Its production fell in 2011 following a tsunami while it threatened to cease production in Australia due to lack of export viability of the Australian dollar. It has also been observed that a “no-deal” Brexit will adversely affect the operations of Toyota in the European Union market like in the case of the 240 million pounds Burnaston plant investment aimed at manufacturing Auris and Avensis. A strategy, therefore, needs to be laid out in response to the changes to sustain the market performance of the company. A critical analysis of the competencies alongside the managerial skills required in the change management also ought to be undertaken. A recommendation of the optimal layout for the workflows and technological processes need to be finally proposed as clearly outlined in this paper.

Statement of the problem

Toyota is subject to the day to day changes in the market based on its diversified business activities around the world. It is for instance identified that the market operations in most parts of America and Europe are production and sales. The African and Asian markets are majorly sales points while Australia is a production and sales point. The most prevalent aspect in the commercial verge is the emergence of a challenging fuel economy. The price of a gallon of oil has been fluctuating in the market currently standing at $4. The trend is affiliated to a need for an alternative source of energy for automobiles due to both depletion and environmental pollution. The major challenge for Toyota is how to counter the variation of fuel prices subject to consumers’ response to sales.

The American market is for instance identified among the greatest competitors due to increased exports. The industry has however seen the development of electric vehicles pioneered by Tesla. United States has increased to an excess of 2 million units of locally produced cars and trucks to the 2.3 million subject to the restraint treaty of importation between the US and Japan. The only move implemented by Toyota, however, is the development of hybrid which to a large extent reduces consumption of fuel rather than engage an alternative. Toyota production strategy in Britain utilizes the just-in-time (JIT) system implying that it can be controlled. The production is managed to supply the European market essentially after the inception of Burnaston in Derbyshire.

It has been reported that production for Toyota for 2019 rose by 8% relatively above the British market production. There is however a fear, Brexit will have a negative repercussion on the market operations of the company in the European market. The Derbyshire firm, for instance, draws the majority of its labour from the UK market. It is expected that the population will be paralyzed in both labour and sales market. The UK is set to become an independent global market. She will thus undertake trade customs towards imports; it is in this case unknown the legislation that will be undertaken against external investors. Toyota Company’s target is not subject to limitation to the UK market. Setting a production firm in UK will not be appropriate upon Brexit. Importation to other European countries will attract higher duties since the UK is no longer in the European Union. Toyota is a major holding in the London stock exchange, which is expected to be affected by Brexit. The implication is that investors preference to the shares of the company will decrease hence decrease in returns that reflect in the long-term sales within the European market.

Operations strategy for change management (450)

Market split specialization

There are emerging markets Marjory in China and India. The company ought to devise market-specific production. The current American market, for instance, has a preference for smaller cars. It is further identified that the major competitors in the local US market including Ford are on the verge of producing large vehicles. Japan targeting producing smaller cars is thus a move to suit consumers’ needs. The market for the developing countries, on the other hand, has a suit for less expensive cars for the lower social classes. The countries, however, have a suit for luxurious cars for the higher social classes. Production is thus to be marginalized into social classes by increasing production and supply of the small vehicles like Auris and the larger vehicles like Lexus.

Development of smaller companies for various markets

Despite the pending challenge of Brexit Burnaston acts as a foundational reference of how well-diversified market-oriented production can take over the market. Within one year, the firm increased company sales by 8% above the UK firms. There is a higher cost of importation from either the headquarters or from regional firms due to differentiated custom duties. The management thus needs to split the market in respect to relevant of what need to be catered for. The American market that requires small cars should, for instance, be targeted by a local firm producing smaller cars only. The African market dominated by both higher and middle social classes, on the other hand, need firms supplying both smaller and luxurious vehicles.

Managerial skills and competencies for change management (450)

The most prevalent aspect that Toyota management is prone to need is uncertainty management. A market analysis shows that there is a higher market uncertainty as depicted in Brexit. Again the increased competition diversified by diversified increased market action provokes uncertainty. The American market is dominated by long-time players including Ford and Chrysler. The upcoming technological players like Tesla also pose a challenge to the market penetration of Toyota into both the American and international markets.

Organizational skills will be necessary for the allocation of resources in the development of new specialized markets. The regional markets will be assigned to regional managers. They need to understand the market context to define the most appropriate vehicles to suit their populace. There is a growing trend of multi-cultural labour task force inclusion. It is alleged that such a labour force positively contributes to decisional input in production. Although Toyota will have to draw some expatriates from both the headquarters and the best-performing branches, a priority shall be given to the local population. Such a move will be an ethical contribution to the cooperate social responsibility.

The most critical factor in increasing profitability will aim at positively reducing production cost. Resilience shall be required in the management of fewer economic resources. It will, however, be undertaken to provide optimal working condition for our task force. The regional managers will, in this case, diversify much of the resources into specialized production. A keen interest will also be undertaken carrying out intensive market research to identify the most newer market trends to keep up with changes.

Increased competition has largely been affiliated to reduced product cost. It is for instance identified that technological changes that have led to the holding of patents exclusively by some companies has led to market rivalry. Tesla is for instance much holding on innovation in the electric vehicles. Toyota might consider production of electric vehicles to satisfy the American markets. A challenge is thus expected in coming up with innovations that do not cross the production lines of other patent holders. As a measure to improve trust amongst market players, our regional, managers shall need to embrace trust-building. It shall thus be undertaken venturing into regional cooperations through undertaking common events. Consumers will also be stimulated to build trust with our products to charging of fair prices. Their complaints will also be received and acted upon. A different measure will also involve full inception of customer cares implemented through online platforms.

Optimum layout for process workflows and process technologies

The process workflows shall involve a breakdown of the steps meant to counter adverse effects to Toyota sales as a result of commercial technological changes in the market. Process technologies shall also involve the breakdown of implementations taken with respect to the changing technology. The initial step that ought to be undertaken is the breakdown of the market to suit various regions. The strategies manager at the headquarter shall refer the strategy to the human resource department to identify the most suitable regional managers. The plan shall have a detailed breakdown of the regions with the respective development. The finance department shall also get a copy of the same plan to roll out the outsource for the funds.

The program is subject to implementation within three years upon which the regional managers will assume their positions. Development of production firms for the developing countries cars shall, however, take three and a half years. The extended duration shall be due to the need for development of both small and large cars manufacturers. The human resource department in the regional firms shall engage in selection, recruitment and training programs for a labour force for a duration of six months. Production will eventually take off in four years.

Technological changes are targeted in countering the effect of electric vehicles in the market. There is a better alternative in ignoring and concentrating on normal production, however, future changes would adversely affect competence. The regional technology department ought to source out for the most skilled personalities to inspire newer innovations. The intermediary plan of production of hybrid vehicles shall intensively be advertised to increase sales. A transition shall, however, be adopted in the wrong upon identification of the next best alternative not infringing the existing patents.

Evaluation and recommendations

A market analysis identifies transformation in technology that is threatening Toyota dominance in the automobile market. Perhaps the most notable aspect is the need of the market to adopt a vehicle responsive to sources of energy as well as environmental pollution. Tesla-American based firm has commercialized the field and is expected to gain dominance by 2030. The next best counter of such innovation in the global market by Toyota is Hybrid vehicles. It is however expected that the company come up with a complete solution to environmental pollution and reliable source of energy. The pending Brexit is seen to also be a threat to Toyota dominance in European market bearing in mind the establishment of Barnston firm to produce Avensis and Auris. It is also projected that production based in Britain shall attract higher exportation charges. The market fate of the company thus remains at stake and danger of volatile operations.

It has been pointed out that the most probable measure would be to segregate the market to produce market-oriented products. The market is to be split into regions with a preference for the small cars (like America) and regions with preference for large vehicles and eventually where social classes cuts across. Technological process would better be implemented through the hiring of highly skilled personnel’s. The human resource department is challenged to outsource for professional individuals to bridge the gap. Collaborations also need to be undertaken with the most successful firms to identify the new changes. The human resource department at the headquarters ought to undertake the recruitment of regional managers as expatriates. The regional managers will assume their position after the finance department undertakes the development of new firms as directed by the strategy department and implemented by the project management teams. The human resource department in the regional firms shall eventually recruit a diverse team of employees to dominate the new spheres.

Despite the increased competition that might lead to unethical competition, the management is advised to uphold respect to all stakeholders. They, as a result, need to observe infringement of the competitors patent rights. Consumer needs shall also be maintained through upholding of quality standards. A consumer response department needs to be fully automated through an online platform to make consumers feel part of the globally diversified Toyota Company. The employees need to be provided with optimal working conditions. It is for instance projected that a training program is undertaken to improve the skills of the workers. The emerging trend of dual-occupation also needs to be considered in the culturally diverse labour task force to reduce family disconnections. The final recommendations need to be submitted to the main administration for approval.

Miscellaneous issues facing Toyota

The market responses have had it that Toyota brands are regarded as outdated essentially in the American market. Jesse Toprak through the TrueCar.Com has for instance challenges Toyota to hastily act against consumer complains against claims of faulty gas pedals. Toyota sales since 2010 has fallen by 16% as compared to other firms due to old-fashioned branding.

The Japanese local market is at a threat that seems not ending soon. The company sales, for instance, accounts for only 30% of the national sales despite dominance in the global market. The decreased performance is affiliated with natural disaster like Tsunami. The Japan-China backlash is also contributing to the German and Korean benefiting from Chinese market at the expense of Toyota.

Conclusion

Toyota market performance has been inspiring ranking it the sixth-largest Company in revenue. Market changes have however affected performance as a result of unsustainable competition. The American market has essentially been a threat mainly due to dominance in making of both smaller cars and improved technology. The pending Brexit is also a threat to the dominance of the Company in the European market due to new export duties. It has been realized that implementation of diversification of both the market and technology changes will save market operations of the Company. Market differentiation is undertaken to fully satisfy specific consumer needs. Smaller cars will thus target the developed countries while the large vehicles will cut across. The developing countries are identified to have diversification of social classes. Firms in developing countries will thus produce both small and luxurious cars for middle and higher social classes.

The regional firms will operate independently though reliance on expatriates from the mother firm. The labour force shall be culturally diverse considerate of dual-career with an all-inclusive decision-making platform. The human resource department shall bear the greatest role in this case of recruiting competent personalities. They shall also outsource the most skilled technical experts to bridge the innovation gap in the market.