Toyota Motor Corporation: Operations and Information Management

Topic: Management
Words: 3792 Pages: 5

Executive Summary

Working to optimize operational processes through appropriate strategic solutions and innovation is a significant aspect of business development. This paper analyzes the opportunities for improving operational practices at the Toyota Motor Corporation. Operations and information management of the company are assessed, and relevant visual and analytical tools are utilized to reflect on the existing approaches to maintaining business performance. Based on the evaluation of potentially viable software programs to implement in the corporation, several applications have been identified. Given the analysis of their characteristics, the LastPass Enterprise program is the most optimal for Toyota to introduce. Despite the potential risks associated with its maintenance, this application offers the most valuable options in terms of value for money product.

Introduction

Companies must make strategic decisions to manage their operations effectively and ensure the appropriate flow of information. Indeed, operations management is about production process administration and efficiency promotion. On the other hand, information management is about controlling the availability and flow of information to influence decision-making. This paper contains Part A and B, respectively, focusing on operations management and information management. In Part A, the author considers the process design and facility layout of the Toyota Motor Corporation to illustrate the importance of strategic decisions on selecting an appropriate process and facility layout to manage the organization and production of goods and services. Section A includes a flow chart to justify the information presented therein. Part B focuses on information management and contains two sub-parts: B1 and B2. B1 is about business process management and strategy analysis, while B2 is on software comparison and recommendation. In both B1 and B2, the author will be an employed consultant advising on the effective implementation of strategic changes.

Operations Management

Toyota Motor Corporation is among the largest and most profitable firms globally. It is headquartered in Toyota City in Aichi, Japan, and designs, produces, and sells motor vehicles. The company’s managerial practices exist in six organizational mechanisms. Three of these are mainly social and include integrative leadership, close supervision, and mutual adjustment. The other three are standardization forms that include design, work process, and skills standards (Yaser, Embrandiri & Tajarudin, 2020). Although each mechanism accomplishes little work, they achieve much together by reinforcing each other. They give Toyota the tightly knit product development systems that ensure practical coordination and functional expertise. With this strategy, integration over time and across projects is possible in the company. The company is constantly evolving and changing its production approaches to minimize waste and increase profitability (Yaser et al., 2020). The layout had three to four sub-lines about 300 meters long (Yaser et al., 2020, p. 77). In this traditional method, engineers installed electrical components in the trim line. In the chassis section, engineers added the exhaust, motor, and drive train, among other components.

Despite the fact that the methods used by Toyota management show good results, it is impossible to unequivocally evaluate all actions as exceptionally effective. The fact is that frequent changes in production and organizational approaches can lead to a lack of opportunity to identify urgent problems in a timely manner. To detect and eliminate weaknesses in production, it must have the nature of a continuous flow (Kelkar, 2021). It is necessary to realize the movement of products and information between processes and people. In this way, the company can improve the efficiency of finding gaps, since such a structure will improve several areas at the same time (Kelkar, 2021). Based on this, Toyota management should pay particular attention to the elimination of the strategy of permanently replacing one approach with another.

Toyota’s ongoing focus on quality improvement has led to several layout design changes. In 1992, the company conducted layout experiments at the new Kyushu assembly plant. The company split the assembly line into eleven self-contained, 100-meter long sections (Morgan & Liker, 2020, p. 17). Figure 1 below illustrates these design changes at the new assembly plant. The new design aimed to minimize waste and ensure more efficient and effective work processes.

Kyushu assembly line layout 
Figure 1: Kyushu assembly line layout 

In line with its philosophy of continuous improvement, Toyota created another layout design in 1994 at the Motomachi plant. The aim of the new design was reducing the production cost and increasing efficiency while reducing wastes. The renovation of the Motomachi plant was not as radical as the one conducted in 1992 in the Kyushu plant (Morgan & Liker, 2020). The renovation involved splinting longer segments into smaller parts as shown in Figure 2 below. The ongoing design changes culminated in better products and outcomes.

1994 Motomachi assembly line layout 
Figure 2: 1994 Motomachi assembly line layout 

Today, Toyota uses a different design layout that represents ongoing effort at improving outcomes and its productivity and profitability. In 2014, the company created a new assembly layout at the Motomachi plant. The 2014 layout, showed in Figure 3, represented a significant improvement from the one from 1994 (Morgan & Liker, 2020). The new 2014 design motivates workers, represents an opportunity to finish the assembly work faster, and improves productivity. It stops a segment only and minimizes the likelihood of error and error transfer from one segment to another.

2014 Motomachi assembly line layout 
Figure 3: 2014 Motomachi assembly line layout 

Information Management

The recent COVID-19 pandemic wreaked havoc globally, making it difficult for businesses to make profits. Small and medium enterprises, especially those in the travel, music, entertainment, and events industry. Although the COVID problem has dissipated, SMEs still need specific information and appropriate ideas regarding technology’s potential to develop, support, and future-proof livelihoods (Kelkar, 2021). Charles and Christina, who are classical musicians and music teachers, can use technology to do social media marketing, online business accounts, maintain an updated calendar of events, and track their communication with clients. Some of the technologies they can utilize for these improvements include enterprise resource management software and customer relationship management software (Kelkar, 2021). The following section analyzes the business process model strategy that Charles and Christina can use and compares and recommends software for utilization in their business.

Business Process Models and Strategy Analysis

Business Process Models

The first business process model (BPM) that Charles and Christina should consider is one that involves direct online booking. This BPM offers direct communication and will help the couple respond promptly to customers and their requests. Online booking will also help Charles and Christina monitor their business and make appropriate changes depending on demand (Kelkar, 2021). As shown in Figure 4 below, this online booking is such that the customer must sign into the online platform first before requesting and performing the booking. The model provides an opportunity for increased profitability by reducing the chances and likelihood of competition.

Dedicated online booking BPM
Figure 4: Dedicated online booking BPM

The second alternative is for Charles and Christina to register on popular classified websites, such as Craigslist, where they can list their services. Customers needing musicians or music teachers can come to that website and search for the service they desire and choose from the available options (Kelkar, 2021). As shown in Figure 5, this second business process model is straightforward, although the customer’s search will most often return numerous possibilities from which the customer chooses.

Booking from a shared platform BPM
Figure 5: Booking from a shared platform BPM

 It should be noted that the online booking model is the most suitable in the case of Charles and Christina. This is explained by the fact that such an approach implements several of the most important and profitable aspects of doing business at once. The online booking system significantly expands business opportunities, provides customers with services in a convenient form and increases sales. The development of such a system will bring it to a new level, increase customer loyalty, and ensure round-the-clock operation of the company.

The online booking system compares favorably with traditional offers. It allows customers to get acquainted with the conditions of the company, study the offers, choose the most suitable one and make a reservation at any convenient time. Moreover, it is highly suitable for hotels, hotels, private households, which are rented to visitors. It can also be used for concert venues, art spaces, restaurants. The features of the online booking system are as follows:

  • Creation of a unified customer base, its constant expansion and segmentation depending on the needs of the business;
  • The reservation is fully controlled by the administrator, all information is provided in a convenient way,
  • Quick search allows management to get the necessary data, and the work of the manager is simplified;
  • Employees of the institution receive information about a new booking, which allows them to immediately prepare a room, distribute tasks and provide quality services to the client;
  • The client receives booking reminders (Kelkar, 2021);
  • The booking system for the site makes it possible to immediately receive additional services, this is implemented using tools that offer the visitor to select additional functions;
  • Online booking works around the clock, visitors can automatically book a hotel room or a table in a restaurant at any time, and the application will be processed during the manager’s working hours, while other visitors will not be able to book this position until the application is processed by the manager;’
  • Online payment tools simplify communication between the user and the business, increase sales through quick decision making, and the reservation will not be idle and lost.
  • Online booking systems have a wide range of possibilities, they are implemented directly into the existing website or web application (Yaser et al., 2020). For business, the development of a booking system provides the following benefits:
  • Site conversion increases, users spend more time studying information;
  • Increase sales due to booking by the client at the moment of decision making;
  • Communication with clients improves, loyalty to business grows;
  • The client receives full information about the institution, can study the data in real time, get acquainted with the prices (Yaser et al., 2020);
  • The work of employees is simplified, the burden is removed from the manager, and other employees receive relevant tasks;
  • Real sales statistics are collected, it is easy to track the effectiveness of services, the quality of staff work and other data.

The booking system for the site allows management to increase sales, improve business processes and leads to scaling and development. This is a digital tool that is suitable for a modern company. It is important to note that the above advantages of the business model fulfill the needs of Charles and Christina in several areas at once. They need to delegate a number of responsibilities as much as possible to facilitate the work of managers and themselves. Online booking, however, allows one to avoid several of these disadvantages. In addition, in the context of modern society and in particular the COVID-19 pandemic, the demand for Internet services is increasing (Yaser et al., 2020). Accordingly, the introduction of such digital tools significantly increases both the opinion about the organization and the overall loyalty of customers due to the convenience.

SWOT Strategic Analysis

To assess the business situation in the company more objectively, it is necessary to conduct a SWOT analysis. It is one of the most important stages of marketing planning and consists in determining the strengths and weaknesses of the company’s activities, potential external threats and favorable opportunities for the company and assessing them relative to strategically important competitors. The strengths of Toyota are as follows:

  1. Strong credibility, the brand name is associated with quality and history;
  2. A first-class culture of personnel management, with the ability to critically assess the factors necessary to maintain excellence (Morgan & Liker, 2020);
  3. Complete elimination of losses in production due to the “just in time” system,
  4. First-class internal information system and dealer coordination system;
  5. Numerous capital reserves that provide the company with funds for investment, as well as making it possible to finance a strategy for expanding the business into new markets with high potential;
  6. Competitive advantage, which consists in innovative technological development;
  7. Moderate pricing policy;
  8. Contribution to environmental protection.

In turn, the company has some weaknesses:

  1. Lack of experience in the European segment of mini-cars compared to the experience of aggressive local competitors (Morgan & Liker, 2020);
  2. Lack of experience in working with Generation X consumers who have established preferences within the framework of the products of European automakers (Yaser et al., 2020);
  3. Concentration of the main production capacities in Japan and the USA, which hinders the effect of “scale economies” in European countries.

The increase in market share, which other Japanese automakers in Europe have not achieved, can be explained by the fact that Toyota has a unique production system. However, with the creation of a European joint venture with PSA Peugeot Citroen, the effect of owning a unique production system will be partially offset (Kelkar, 2021). It was economic efficiency that prompted Toyota to join forces with PSA, as this strategic approach allowed the company to enter European markets without the need for financial leverage. In addition, this joint venture will not only provide Toyota with the necessary “know-how” to operate in Europe, but will also strengthen distribution channels and increase dealer learning (Morgan & Liker, 2020). Through the analysis of advantages and disadvantages, it is possible to identify the current business situation in the company, which mainly consists of both opportunities and threats.

Current Business Situation based on the Existing BPM and SWOT

SWOT analysis of Toyota Kirloskar Motor
Figure 6: SWOT analysis of Toyota Kirloskar Motor

Based on the analysis above, it turned out that Toyota lacks mobility in closing deals. The fact is that the industry is designed for a specific consumer who studies the issue on his own in advance. This negatively affects potential buyers who do not have sufficient knowledge in this area (Morgan & Liker, 2020). This is the main disadvantage of the company because generation X is gradually becoming the target consumer (Morgan & Liker, 2020). A feature of representatives of this age group is the lack of knowledge of the product provided by Toyota. To solve this problem, corporations need to modernize their production and service delivery by adding new software (Morgan & Liker, 2020). This solution will allow realizing two advantages at once – to establish contact with a potential client and control the business through flexible pricing.

The system of organization and management is based on the complete elimination of losses in production. The just-in-time system, according to which the production of a car is started only after the receipt of an order form from the dealer for it, allows minimizing the volume of overproduction and stocks of the enterprise (Morgan & Liker, 2020). Nevertheless, the main element of success is still the reverent and respectful attitude of the plant’s employees to each other. It makes them constantly improve the production process, not being indifferent to the performance of their part of the work.

The joint venture between Toyota and PSA can be taken as proof that the company is serious about developing its production in the European market and is ready to make a local transition from its global standardization strategy. Its launch caused serious concern among experts due to the fact that both creators are competitors to each other (Morgan & Liker, 2020). However, it was economic efficiency that prompted Toyota to join forces with PSA, as this strategic approach allowed the company to enter European markets without the need for financial leverage (Morgan & Liker, 2020). In addition, this joint venture will not only provide Toyota with the necessary know-how to operate in Europe, but will also strengthen distribution channels and increase dealer learning.

Thus, one of the main reasons for the success of the project is the fact that both companies managed to successfully synchronize their interests. The winning party, in this case, should be considered PSA due to the fact that the joint venture was built in accordance with Toyota’s operating schemes (Morgan & Liker, 2020). This means that PSA has gained a basic understanding of the essence of the most competitive advantage of one of its greatest rivals, the TPS system.

In an effort to establish itself as an environmentally responsible manufacturer, Peugeot is already stepping on the heels of its Toyota counterparts with the launch of its first hybrid vehicle in the fall of 2010. Model 3008 HYbrid4 producing only 99g, CO2/km, and the previously launched and highly reminiscent Toyota iQ Peugeot iOn, which Peugeot claims are the first 100% electric cars on the market (Morgan & Liker, 2020, p. 99). The start of mass production of the mini-model Toyota Aygo at the plant in the Czech Republic, although it fell on a period of growth, presented many challenges for the company (Morgan & Liker, 2020). The mini-car segment is price sensitive, and production costs had to be kept under tight control. It was in this connection that Toyota decided to organize a joint venture with PSA. This decision shows that cost reduction was a fundamental criterion for Toyota.

Software Comparison and Recommendation

To identify the software required for Toyota, it is necessary to identify the characteristics on which the study will be conducted. It is based on four aspects that affect the vital elements for a large-scale company. The Table 1 below demonstrates the comparison of such aspects as efficiency, maintainability, portability, and code in regards to four types of software.

Table 1. Definition of complex indicators of quality

Software Characteristic
Efficiencies Maintainability Portability Code
Asana Demanding on the technical support of computers and hard drives since it is a difficult program to implement Extremely unstable, as it requires large resources to perform large-scale amounts of work; a high price, which is financially unjustified Transferred from one database to another, regardless of technology and its support (Santos, 2022) Opened
Last Pass Enterprise It has a large number of tools to use all the resources of the corporation, while improving the quality of the system. Easy to use and independent of the power of the equipment Produces any desired modifications and improvements to existing systems and bases (LastPass, 2022). The software has the necessary autonomous processes that detect shortcomings and is able to conduct analytics. The program offers different pricing plans for distinctive business sizes Transferred from one database to another, regardless of technology and its support Finished commercial product
Microsoft Project It is a simple program that is supported on the vast majority of devices. Possesses sufficient tools to implement the entire volume of resources available to the company (Microsoft, 2022). The most financially available program of all the applications reviewed Can carry out any modification activity with the proper skill of specialists Transferred from one database to another, regardless of technology and its support Finished commercial product
Pilot-ICE It is a complex program that is able to release all the possibilities only with the powerful technical equipment of the corporation (Pilot-ICE, n.d.). Maintenance costs may not be justified due to limited functionality Extremely unstable, as it requires large resources to perform large-scale amounts of work It is practically non-mobile, as it is integrated into a ready-made database and business system. If a situation arises where data transfer is required, the integration process must be restarted Opened

As a result of comparative work, the most suitable option for Toyota was identified. This is the popular LastPass service, an online storage of passwords and dynamic data. The service created LastPass Enterprise for corporate clients, which allows management to combine all corporate passwords into a common vault (LastPass, 2022). The ability to create large quantities of access for content managers and other specialists from one place saves the project manager’s time, which increases the efficiency and profit of the company (Yaser et al., 2020). Thus, it is content managers who will be able to direct the spectrum of attention to generation X, identifying their habits and interests, thereby attracting customers to Toyota.

There is a rule in the Internet services market, according to which, the more common the product among customers, the more expensive it is. Such a marketing ploy allows corporations to develop but, at the same time, harm customers. As a result, the risk of a decrease in demand arises from the dissatisfaction of target customers. In this case, LastPass Enterprise is the most profitable product among competitors (Kelkar, 2021). It is not as common among organizations as Microsoft Project, which predetermines its lower cost (LastPass, 2022). The range of services and capabilities is not inferior to those analyzed by competitors, therefore, LastPass Enterprise is an absolutely profitable solution from any point of view.

The risks associated with integrating LastPass Enterprise concern an insufficiently productive technical base, which, in turn, is fraught with poor software performance. A situation is possible when computers may not be able to cope with the increased power (LastPass, 2022). This means that the organization needs to plan for the planned replacement of obsolete hardware to avoid risks (Kelkar, 2021). While it makes the overall integration of LastPass Enterprise more expensive this way, overcoming a competitive barrier is still more expensive.

Another risk is the lack of specialists with sufficient knowledge about working with such programs. While LastPass Enterprise has a clean interface and automated processes, people must interact quickly and competently with the software. To avoid possible failures and lack of experience, advanced training courses should be held in advance. Moreover, this is not relevant to all specialists but only to those who are associated with programming activities (LastPass, 2022). Thus, despite the presence of risks, there are specific tools to prevent them.

Conclusion

Based on the foregoing, it must be emphasized that business processing is one of the most difficult areas of doing business. The fact is that this area is extremely extensive and is responsible for many processes. At the same time, it is due to the control and perfection of management in this area that the corporation can maximize the efficiency of its activities. To make it easier for entrepreneurs and organizations to implement projects, third-party firms create software. In turn, these products greatly facilitate the control of business processes.

In addition to other things, it is worth highlighting that the management and organizational structure of any corporation are the most important indicators. Using the example of Toyota and Christina’s business, it was found that the right choice of development and improvement strategies contributes not only to increasing profits, but also to improving all indicators. Proceeding from this, in any company it is necessary to have highly competent specialists occupying senior positions and permanently studying the market.

Reference List

Kelkar, S. A. (2021). Business process management. A concise study. Delhi: PHI Learning Pvt. Ltd.

LastPass. (2022). Overview of LastPass business. Web.

Microsoft. (2022). Microsoft Project. Web.

Morgan, J., & Liker, J. K. (2020). The Toyota product development system. Integrating people, process, and technology. Oxfordshire: Taylor & Francis.

Pilot-ICE. (n.d.). Key features of Pilot-ICE. Web.

Roser, C. (2014). Evolution of Toyota assembly line layout – A visit to the Motomachi plant. Web.

Santos, J. M. D. (2022). Asana software review for 2022. Web.

Shastri, A. (2022). Extensive SWOT analysis of Toyota Kirloskar Motor. Web.

Yaser, A. Z., Embrandiri, A. and Tajarudin, H. A. (Eds.). (2020). Waste management, processing and valorization. Singapore: Springer Singapore.

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