Introduction Performance is broadly judged on the basis of output with respect to input.

When the ratio of output to the ratio of input is higher it indicates or is a measure of systems efficiency and effectiveness. But in accordance of output to input time period also has to be taken into consideration. In today's fast changing business environment organizations struggle to achieve competitive advantage for growth and survival. Be deployed by system operations irrespective of its application in functional areas of marketing, procurement or logistics. Resources are very scarce so it becomes a major priority for companies to effectively and efficiently utilize them Logistical operations require deployment of a lot resources for movement of goods and information across the supply chain. Hence monitoring, controlling and improving performance of logistical operations is very important in order to achieve goals of cost reduction and customer satisfaction.

Performance Measurement System Objectives There are certain criteria on the basis of which performance is measured; any performance measurement system shall have the following Objectives:  Monitoring  Controlling  Directing

MONITORING It refers to the present status of operation to the management. Monitoring system varies from one department to another department. Financial monitoring system reports to the management regarding inflow and outflow of funds. But in case of logistic monitoring system it reports on cost break-up across various logistical activities like:

   

Warehousing Transportation Packaging Material handling etc.

CONTROLLING Every firm or business organization has a set standard for performance measurement. The objective of controlling measures actual performance or output with that of the set standards. It measures the variance, difference or deviation from the set goals. For e.g.: out of 100% if the control system has 60% of the order fulfilment rate then it indicates 40% deviation. DIRECTING Without proper direction there can be no satisfactory output in spite of the input. Motivation plays an important role in enhancing and improving the performance measurement system. Rewards and incentives are one of the few motivators that enhance individual efficiency. For e.g.: the ware workforce engaged in material handling may be motivated through rewards for crossing the targeted dispatches in a specified time frame or even before that. LOGISTIC PERFORMANCE LEVELS In logistics performance measurement is done two different levels: 1. Internal measure 2. External measure There should be a balance between both internal as well as external measure. The internal and external measures include various factors which should also be taken into account they are: EXTERNAL MEASURES: 1. Customer satisfaction

Order fulfilment 4. Operating Cost 2. Asset MANAGEMENT FINANCIAL MEASURES: 1. Asset Management 3. It reveals the weak link in the logistic supply chain. this process is called Logistical Audit. Quality CUSTOMER PERCEPTION MEASURES: 1. Productivity 4. After sale service 3. Value added services INNOVATIONS: 1. A logistic audit measures the capabilities and . Productivity 2. Cost 2. Quality 3. Customer demand INTERNAL MEASURES: 1. Customer feedback 2. Benchmarking LOGISTICAL AUDIT For enhancing the performance of the logistical system it is necessary to take stock of the efficiency and effectiveness status together. Return on investment NON-FINANCIAL MEASURES: 1.2.

Packaging system 5. Any differences in costs are acutely supervised. Warehouse capacity 7. Earlier these specified limits on application of funds on each cost centre. These budgets are irrespective of the original reporting structures. But customer focused organization will have a flat . Terms is done on the following basis or criteria: 1. Automation 6. Structural Control System BUDGETARY CONTROL SYSTEM Every firm fixes up a budget for each of the logistical activities. Usually organizations go for the following two types of Control Systems: 1. Productivity 4. STRUCTURAL CONTROL SYSTEM. An organization having cost as its differentiation strategy will have various levels of reporting structure to cut cost at higher levels of investment proposals. External factors LOGISTICS PERFORMANCE CONTROLS. a powerful control mechanism needs to be evolved and implemented. Controls are exercised through proper organizational structure. Technology 3. Budgetary Control System 2. Quality 2.qualities of the logistic operations and highlights resources for rationalization and cost reduction. Strategic logistical planning 8. Here emphasis is more on cost saving instead of customer service. To direct the logistical activities for competitiveness in an organization.

It focuses on improving and tracking the health of the supply chain to remain competitive.reporting structure. .

 More established auto manufacturers in America and Europe. and the Japanese economy was in tatters. like Ford and Volkswagen. An entity born out of a cloth weaving company. like America.  Effects of the war on the economy had left little room for new investment to be raised. . However. Toyota faced four key problems:  The size of the Japanese domestic market for automobiles was much smaller when compared to the western countries. To have an efficient massproduction facility was out of the question as the cost for manufacturing would never be realised. This meant competition with well-established organizations. meant an increase in wage costs for the employers. and made the redundancy option difficult for employers. especially when the automobile industry is looked into.81 million vehicles in 2006. This.  The end of the war brought American administrators to Japan. In order to establish itself. It is important to understand the climate that Toyota actually was established in. while maintaining a high level of quality. World War II had just ended. had the size and financial resources to enter the Japanese market. Toyota overcame several hurdles before implementing its current setup. the journey has not been easy for Toyota. like Toyota.Managing Performance Case Study The Toyota Toyota presents one of the most fascinating success stories in the organizational history in the world. would not be able to secure financing as the business system was not willing to risk on something that had large chances of failure. with sales of 8. in turn. and begin operations of their own brands. This meant that ambitious projects. One of the laws introduced related to labour power. that had decades of experience in the running of assembly lines for automobiles. Toyota in sixty years established itself as the world‘s largest automobile company. who devised new functions for the business system to follow. which gave workers a strong right to bargain for their benefits. With initial problems of setting up an automobile manufacturing corporation in Japan to breaking into the international markets.

these markets came with two key obstacles: stronger competition from well-established manufacturers like Ford. Toyota‘s initial goal was to cater to the domestic Japanese market. The fact that Toyota ensured life-long employment and salary grading by seniority gave it a loyal and dependable workforce to push its goals for quality and efficient manufacturing of automobiles. As the initial manufacturing process followed by Toyota was the same as . and provided little help to the Japanese automobile manufacturers who were struggling to finance and compete with their Western counterparts. With time and growth. and a unionised national workforce which possessed strong bargaining power under the law. Toyota was able to work out a deal with its workforce which effectively removed any form of unionisation from the corporation. The key figure-head in the transformation of Toyota was a mechanical engineer. In context to the labour issues. and the marketing of the cars to the international market. The key problems that it faced by the 1950s were in the implementation of mass production facilities that were efficient and cost-effective. and most are company-oriented rather than industry-wide like the West. Ohno Taiicchi. including the supply of the various parts used. It is pertinent to mention that labour unions are not a common feature of the Japanese business system. and allow for a stronger foundation for Japanese manufacturers to streamline the processes.When the new Japanese government assumed control in 1950. the premise was to give time to the local manufacturing industry to come at par with the demands of the market. they introduced high tariffs on the importation of foreign cars and blocked all forms of foreign direct investment (FDI) into the local automobile industry. However. Ohno had worked within Toyota‘s weaving entity prior to the foray into the automobile unit. the unions normally play a part in effectively communicating the vision of the company to the workforce. Toyota‘s foray into the automobile manufacturing sector was from its understanding of the machines that weave high-quality cloth and the knowledge of the subject gained from education by its founder Toyoda Kiichiro. In terms of marketing. While this may seem as an uncompetitive move. However. Additionally. this action could not help in matters of quality control and efficient manufacturing. the prospects of entering larger markets enticed Toyota.

while performing additional aspects of the process. known as the team leader. which had become an industry-wide accepted method. with teams of workers being formed that were led by a member among them. there was little thought given on quality control. Ohno began to study the problems with the system and came out with the following five:  The build-up of inventories of parts due to the long production line meant high costs. these duties could be performed by the line workers. The provision of multiple tasks meant that workers were more involved in the overall process. There was the cost of the storage of these parts. this meant that repairing these defects would result in an increase in costs. This was primarily due to the already produced parts that were going to be placed in the design already specified in the production process. To develop new parts that conformed to market demands meant significant investment into research and manufacturing. and introducing changes that the customers desired. or perform other maintenance duties as required. Due to little incentive being given to this aspect. and the finished product sold. and had .  With workers assigned to one task in the production line. Logically. and these members could also be utilised within the normal production process.Ford. Toyota undertook the following steps to bring into effect an efficient and economical process:  Segregation among the workforce was removed. as well as the invested capital which laid tied up in these parts till they could be used in the manufacturing. All workers were required to be quality inspectors as well as maintenance specialists. both of which were not available to Toyota at that stage. or inspect quality. as quality control personnel down the line would catch any defects. as well as low productivity for the day. the perception in the minds of the workers was to keep doing their task.  The high level of segregation within the workforce meant having additional personnel to simply supervise.  There was little flexibility for diversifying the product portfolio. However. as well the availability of skilled labour. This meant that a mistake in the setting at the beginning would result in a large number of defects down the production line. In terms of manufacturing.  Equipment used to stamp body parts and manufacture various components were setup at the initial stage of the day.

and introducing efficient methods of utilising the full potential of the workforce. the one that did result in initial failure was its expansion in the US market. This means that the suppliers do not have a vested interest in the manufacturer. since the latter could go off to other suppliers to reduce costs or seek more favourable conditions. In line with the new duties.  The cost of holding large inventories meant a lack of financial resources to invest in expansion and improvement. regular workers were assigned with the changing process. partnerships with local suppliers were established. since unlike their Japanese counterparts.a chance to come up with ways to improve or correct any imperfections during the manufacturing. One of the reasons to explain their failures is the variation in business systems. Through trial and error. It relates to the cutting of overhead costs. as they are believed to be vital to the overall success of the organization. with terms that suited both parties. Western manufacturers have tried to copy the system developed by Toyota. In terms of the steps taken by Toyota to counter its problems. size played an . and incorporate more into design and production. the process became more economical. The Anglo-Saxon system is more dynamic in its approach. A key factor for this was a lack of understanding of the market and the consumers.  Dies used in the stamping process were normally changed by the specialist workers. The Japanese business system relies on longterm connections with suppliers and stakeholders. During this process. What Toyota discovered was that by doing smaller batch manufacturing. the time for the changing of dies was reduced from days to 3 minutes. the line workers remained idle. Additionally. The manufacturing process implemented and perfected by Toyota was coined as ―lean manufacturing‖. It also provided an avenue to cater to consumer needs and demands. This hammered the Western timescales of 2 to 6 hours for the same process. Thus. and bring changes to the design and components of the automobiles. Toyota‘s vision was to help the suppliers to the maximum. as that allowed them to reap the benefits of higher quality of parts and lower costs. It also prevented a large quantity of defective products being discovered at the end of the production line. outsourcing the manufacturing of parts could help in reducing the company‘s resources on that step. the network and the organization. and connections with stakeholders are up to the point of services being rendered or products being delivered. but have so far not found the success that the inventor is enjoying. In recent years.

Then assessment stage is critical. does not take away the innovative concepts that came out. promotions. the journey of Toyota to increase efficiency and build a network within its local industry to better serve the needs presents an ideal scenario for many corporations to copy. critical incident books.716 employees. Further. The performance management process of Toyota is started with planning process. Normally end . all compensations. The fact that the local culture and institutions helped Toyota make changes necessary for their improvement. and training and development activities are depended on the performance assessment of respective employees (Mcphaul. Hence. Accordingly top management to operational level these objectives are followed. 2005: p32). career development plans. 2005: p32). at the beginning of the year all employees are well aware about their objectives for the next financial year. Overall. These objectives are followed by the next level of hierarchy. the chairperson of Toyota gives his objective for the financial year. 2010: p18). Also these objectives may include long term plans of the organization. Toyota had to pull out after their first foray in the US accepting heavy losses of investment and lack of demand. The Toyota way of performance management is unique to Toyota Motor Corporation (Mcphaul. At the guidance programme employee can discuss their shortcoming and line-up again to achieve company objectives. These all objectives are properly documented. Hence. Toyota has effective methods for regular discussions. Further. who has employed 317. with no prior experience of the auto industry. At Toyota. Also critical incident records are maintained by managers to analysis the performance of their respective employees. or the fact that the world‘s largest automobile manufacturer was the child company of a textile weaving organization. Those include guidance programmes. At this stage. The second stage is regular discussions of objectives. succession plans. has effective performance management system. etc (Thun. It is clearly indicated what he wants to achieve during the year. these objectives are selected from the corporate strategies of the company. midyear review is a good tool to analyze whether employee are in correct tract. midyear review.important part in the decision-making process of an American auto buyer. The Toyota way of performance management Toyota since a large employer.

The Toyota‘s performance management system is very critical to the organization. Toyota use many ways as assessment tools. At the assessment stage.of the financial year the performance assessment is conducted but it is an ongoing process. all training and development needs are identified. Toyota seeks to develop human resources through the activity of making things. Thus. The costs of wrong promotions are very high. Toyota is building both tangible (a new learning facility) and intangible (course content) structures relating to team member development that ensures a secure and steady flow of qualified human resources to conduct Toyota's global business in the 21st century. all training needs are address by a very systematic way. The investment for training and development is huge and management is more concerned about the productivity improvement through training and development. at the end of the year these all results are summarized and compared with the year-end results. Thus. By that method. succession plan is done according to the result of end year assessments. and any other compensation depend on the rating. These identified training needs are amalgamated to the next year training plan of the organization. Also. During the year employee performance are measured by using deferent methods. undertaking global actions for the development of human resources has become a priority issue. this method has help Toyota to select best talent and maintain their competitiveness. In conjunction with the geographic expansion of business and the growth of business areas. their salary increments. Toyota believes that the development of human resources requires the handing down of values and perspectives. company has assured to minimize the mistaken promotions. nothing gets started until we train and educate our people. Also. training and development is a vital area of Toyota. A most commonly used method is 3600 evaluation. Human Resources Development "Because people make our automobiles. For these measurements both qualitative and quantitative methods are used. Firstly. it has helped organization to achieve superior profit in a highly competitive environment. . best talented employees will be identified to develop as future leaders. Further. which they obtained throughout the performance management process. The rating obtain by respective employees are very important. By this method stakeholders will comment on the performance of employees. bonuses. By this method. their promotions are depended on assessment rating. Those tools are depended on the level of management. which were expressed by Honorary Advisor Eiji Toyoda. Further." As seen in these words. Finally.

as well as specialized training for individual divisions. and "T shaped human resources"2 who are able to perform day-to-day activities and expand their skills in technical positions. language training. Toyota created the booklet "Toyota — Developing People" and distributed it to all associates to create a common understanding that "the source of Toyota's competitiveness is human resources development" and to promote the creation of workplaces where personnel development takes place at all sites and at all levels. Toyota has defined the required qualifications of "professional staff"1 for office and engineering positions. and special knowledge and skill training. In October 2002.Fully Committed and Thorough Human Resources Development Toyota conducts systematic company-wide and divisional training and assignments for training purposes with an emphasis on on-the-job training (OJT) to ensure that associates can fully utilize their abilities. Company-wide training is conducted based on employee qualifications. Fig: Key Principles of The Toyota Way 2001 Toyota and Ford Comparative Analysis A Comparative Analysis of the HRM Policies of Toyota and Ford .

who once dominated automobile manufacturing. Giants like General Motors. which are now foreign-owned. increasing their revenues and profits substantially. takeovers and pacts among industry members. businesses of all types in most countries face real or potential competition from foreign products or services. far reaching realignments of major corporations. Spurred by opportunities provided by advances in technology. the surfacing of breathtaking technological developments. and Chrysler. Toyota Motors. are yielded their markets to much younger Japanese companies like Toyota and Honda. This report attempts to analyse the HR policies of Ford and Toyota. and the phenomenal rise of Japanese auto makers. a Japanese car maker that commenced operations. and rapid economic growth. or from foreign-owned subsidiaries. Included in this revolution are extraordinary reorganisations of manufacturing processes. major business corporations have been able to spread their activities across continents. The world of automotive manufacturing. followed by a comparative analysis of HRM at Ford and Toyota. and domestic firms. in 1937. is also in the midst of sweeping shake-ups. Competition almost everywhere has become global in scope. these increased business opportunities have come along with competitive challenges from new and old companies. Ford. is now the biggest and most profitable car maker in the world. has never been as critical as now. globalisation. for long the bell weather of industrial production. numerous mergers.The closing decades of the twentieth century and the opening years of the current millennium have been periods of rapid and widespread change in global society. decades after GM and Ford established themselves. For business corporations. and thereafter concludes with suggestions on the best possible approach for British expatriates who wish to work in the auto industry in Japan. experts believe. comparing their corporate philosophies on the issue. In the midst of this chaos. Human Resource Management Human Resource management is best viewed as an inclusive term for describing a melange of distinctive approaches to people management. Structured in successive sections. the need for top class Human Resource Management. the report takes up the broad area of evolution of HR management and the challenges it faces in these days of internationalisation. It has evolved from a number of different . as well as their manifestation in HRM policies and practices at the ground level.

the hard model stresses on the quantitative and business-strategic aspects of managing employees like other factors of production. HRM outcomes. as also with concepts of flexibility. often contradictory. and secondly are used to categorise approaches to managing people. have created challenges both for management and for organised labour. and adaptability. have all played distinctive roles in the evolution of HR Management. performance outcomes. Theories put forward by Elton Mayo. and financial outcomes. and McGregor‘s Theory Y perspective. as well as practices adopted by Henry Ford. subsequently adopted and modified by Japanese companies. and less emphasis on employer sponsored career growth have not only fundamentally changed assumptions about careers and workforce but also led to anxieties and uncertainty. HRM practices worldwide are being continuously shaped by fundamental changes that have occurred and are occurring in society and in the working space. Maslow. industrialists. and business corporations. . which firstly are diametrically opposed along a number of dimensions. Decreased commitment between management and employees. from psychologists. and globalisation. double income families. Over the years it has evolved and grown with inputs. single parenting responsibilities. corporate managers. and teleworking. which places people at the centre of organisational activity and treats them as the most important organisational resource. and where HRM practices are dovetailed into the strategic objectives of organisations. communication. Even as western companies are increasingly using a mix of soft and hard concepts in constructing HRM strategies. and Herzeberger. which includes HRM strategy. behaviour outcomes. Managements of major corporations realise the complexity of current HR challenges and are trying to respond appropriately to optimise workforce effectiveness. HRM practices in the UK have again been influenced by David Guest‘s six-dimensional HRM model. employment-at-will agreements. HRM is often also described as a concept with soft and hard forms. temporary relationships. HRM practices. management experts. the Human Relations Movement. along with the realities of downsizing. Japanese businesses like Toyota have developed a people oriented ‗Z‘ theory. Whilst the soft model is associated with the Hawthorne Effect. Factors like diverse workforces.threads of thought and is most appropriately described as a loose set of theories about people management rather than a focused methodology.

manifested by tough and consistent practice of industrial relations and a clear focus on the continuity of production. Reacting to the success of Japanese manufacturing practices. and the restriction of workers to particular tasks. strict functional specialisation. Performance Management . bureaucratic. and workers knowing very little outside their specific areas of work. With assembly line stoppages remaining unattended on purpose until the arrival of specialists. Fordism came to be associated with hierarchical decision making. not quality. Organising the workforce of the company on the same footing as other factors of production. and the technical division of labour within companies and their production units. and workers were not allowed to involve themselves in any activity outside their specifically delegated functions. Fordism. extraordinarily good remuneration. mass production. The emphasis in Fordism was on quantity. HR policies have continued to be hierarchical and the company organisation is known to be multi layered.Analysis of HRM Policies at Ford and Toyota Fordism and current HRM Practices at Ford Motors Much of the origins of Modern Human Resource Management can be traced back to developments in American industry in the early years of the 20th century. as this set of personnel management practices came to be known. was identified with strong hierarchical control. the company even today typifies the ―production model‖ of HR. Whilst absorption and utilisation of modern technology and design have always been associated with Ford‘s way of functioning. Ford initiated changes in its personnel policies in the early 1980s to bring in elements of Japanese HR practice. more specifically to the management and production policies initiated by Henry Ford at the Detroit factories of Ford Motors. Ford was instrumental in introducing the concepts of assembly lines. both skilled and unskilled. or employee welfare departments. A number of measures for increasing participation and involvement of workers in Ford UK over the following years led to significant improvement in results. Ford Motors also saw the establishment of the first ―sociology‖. product quality in Fordism was allowed to be subordinated to the need to maintain and increase volumes. and with comparatively low levels of delegation and working independence. in which managers tried to ensure that domestic problems were not allowed to impinge on assembly line productivity. (the five dollar day). and tightly defined job design.

at 37 hours per vehicle. is. It is estimated that Ford has 12 levels between the shop floor worker and the Chief Operating Officer (COO) compared to 4 for Toyota.imperatives were incorporated into the remuneration structure and problem solving groups. The Toyota Phenomenon Unlike Ford and GM. Productivity levels. Industry analysts assert that the company is manager heavy and that individual managers are prone to guard their own turf. Despite recent efforts to renew workforce participation. once the glory of the company. Toyota has been on a roll. adding manpower is the last thing on the management‘s mind right now. with salaries and working conditions being governed by union agreements. Whilst Ford Motors is trying to make its HR policy more participative and focused on improving workforce skills and abilities. non-pay benefits for educational needs of employees also met with significant worker approval. A recent strike at Ford‘s Russian factory led to prolonged work disruption and resulted in across the board wage increases of more than 20% before production restarted. Steady inroads made by trade unions over the years also means that all Ford workers are covered by contracts that include not just pay and benefits but also a broad range of shop floor actions. Whilst selection and recruitment policies at Ford are extremely structured. much worse than Toyota‘s comparative figures of 27 hours. which allowed for non-work. The company became the largest car manufacturer in the world in . now flourish in the company. has initiated a process of downsizing its American workforce by 30. old bureaucratic practices still remain. opening factories and recruiting workers even as its American competitors vie with each other to close factories and terminate thousands of workers. similar to quality circles.000 workers. The company‘s Employee Development and Assistance Programme. The management. a proposal that has not been met kindly by its unions. not just at Detroit but also at Ford factories in other countries. even transparently effective recommendations for improving productivity and cutting costs are difficult to introduce because of complex and time consuming procedures and the need for union acquiescence. and which is likely to be the company‘s chief HR focus in coming months. which resulted in thousands of suggestions. Strikes are not uncommon. apart from selling off its Jaguar and Land Rover brands.

and Shojinka. the HR policy is easily articulated and extremely simple to understand. for example. hire the right people. employee commitment. familiar members of the global management lexicon. workforce flexibility and adaptability. an emphasis on quality. finance. the remuneration structure. among them marketing.2007.000 applications. Jidoka. the truth on the ground is quite different. and HR. Similarly HRM practices work towards promoting the four goals of employee integration with the organisation. not just of workers. bonuses. common canteens and equal treatment of all workers. derive their purpose from the demands of production (and the TPS). and responsibilities of all parties spelled out clearly. and develop them to work in sync with Toyota‘s needs. even though they are far lesser than at Ford are clear. it earned profits of more than 11 billion US dollars. The company offers good salary structures and benefits include pension schemes. its ramifications are complex. hospitalisation. common parking plots. even as GM moved towards bankruptcy. relocation support and car rental programme. dovetail with the needs of the TPS. Kaizen. Even though Toyota follows the widespread Japanese traditions of uniforms. which is the centre of the Toyota universe. holidays. there is a clear demarcation between managers and workers. but also of managers. Hierarchical levels. recent advertisements for 700 people for a newly opened truck manufacturing unit drew more than 40. Much of this is due to the greater stability of the Trade Unions in Japan than in the US and the UK. Union problems are however not completely . All other functions. disability and life insurance. finally. the mother of practices like Kanban. Purchasing techniques like Just-in-Time and Zero-inventory. as well as retraining and redeployment and transfers. and. as also to their consolidation in recent years into the Rengo. Whilst there is a widespread impression that Toyota‘s brilliance arises mainly from its revolutionary HR policies. meal vouchers. Trade Union influence at Toyota is significantly lesser than at Ford. purchasing. Whilst. which is based on seniority and not directly related to job type also helps in facilitating mobility within the organisation. The HR formula at Toyota is simple and clear. The company is a preferred employer. At the centre of Toyota‘s functioning lies the legendary Toyota Production System (TPS). pay them well. and Ford continued to fare poorly. The requirements for people are clearly laid down on company websites and the global size of the company has led to substantial local requirement. take good care of them. thus making layoffs unnecessary.

Staff development processes are based upon systemically involving employees in details of production processes. Whilst shop floor employees are by and large chosen from local people. which makes it necessary for its management to adapt to a range of cultural. The most significant features of Toyota HRM practices however lie in the compan y‘s employee training and development policies. (It‘s) ―Learnership‖ Learnership at Toyota is not separate from the work. differentiating organizational talent. calling for suggestions. economic. This continuous aim to improve in a myriad ways. And that‘s what leaders do. the company has a singular. employing 200. By continuously experimenting with how to perform your tasks better. he emphasizes. process and activity. encouraging work rotation. At Toyota. . and pushing for the inculcation of Kaizen. managerial employees are more international in their constitution. or more creatively or more efficiently. and political situations. it is the work. turning ideas into action – action that creates meaningful change. facilitating the development of a thoughtful approach. the philosophy of continuous improvement in working and personal life. in every department. in an article in the Wharton Leadership Digest makes a similar point from a different perspective.000 workers at 27 overseas locations. It is this belief in employee empowerment that forms the core of Toyota‘s quality control processes. evidenced famously by the authority of shop floor employees to stop factory lines when they spot defects. which the company has maintained with single minded purpose. The Toyota plant in India was shut for 14 days in 2006 because of labour violence over union demands for reinstatement of a few dismissed employees. as a systemic and ingrained approach is closely related to the environment of learning that pervades the organisation. Toyota has extensive international operations.absent. There are significant numbers of American and British managers in Toyota facilities in the US and UK. especially in western countries. even as it has expanded into a vast international group. you constantly raise the bar. Matthew May. some of whom are also sent for long periods to Japan to contribute towards the company‘s international strategy.

Operations Managers Role The Role of an operations manager is of utmost importance as any operations manager who can effectively utilize an organizations resources to efficient effect by producing outputs of a standard & sustainable quality. The biggest challenge for any organization and its operations is to try to maximize productions by cutting down on waste. inventory control. quality control. contributes to the organizations targets in maximizing profits by reducing costs. (These activities are also associated with Product and Service Management. logistics and evaluations. and also ensuring that resources are allocated and used in an efficient manner." Major. Usually. production and distribution. Finding the right balance between getting the production up to the required standard by using the resources available to the optimal level.that is. ―Operations management focuses on carefully managing the processes to produce and distribute products and services.) Related activities include managing purchases. development. Operations management is in regard to all operations within the organization. The management team is charged with the task of ensuring a profitable and safe production system. In order to meet these goals. A great deal of focus is . the management team thus has to attempt to find the best operations strategy available for their particular situation and product.Operation Management and Performance Operations management is the maintenance of the production of goods or services that a company is developing for sale. but they carry out the activities that management schools typically associate with the phrase "operations management. and how well they fit in with the goals of the target organization. and in the first section we will examine some existing operation management strategies. However product management is usually in regard to one or more closely related product -. overall activities often include product creation. Toyota. There are many strategies that can be used by an operations manager depending on the needs of production. small businesses don't talk about "operations management". minimizing waste in labour and material resources. and in the second section we will examine the effectiveness of these strategies. a product line. storage.

and improves the quality of the outputs. products or features that the customer wants.on efficiency and effectiveness of processes. the six sigma process ensures that there is a very low level of defect in the output product. or simply wasteful and can be eliminated. the nature of how operations management is carried out in an organization depends very much on the nature of products or services in the organization. either because of work that is non-value adding. operations management often includes substantial measurement and analysis of internal processes. which was initially developed by Motorola. Therefore. Ultimately. particularly those which do not pertain to the value of the end product. etc. manufacturing. wholesale. for example. For instance. there are several other strategies that can be employed in order to benefit the organization. the six sigma approach to operations management. is another approach. thereby giving the customer the largest value with the lowest amount of resources. One such example of lean manufacturing is the cycle-time variation technique. though perhaps more controversial.‖ Essentially this strategy deals with the elimination of superfluous resources. managing the inputs into outputs and thinking outside the box by focusing on the specifics of the operations and process keeping in line with the mechanics of the set up provided by the organization. Lean manufacturing also involves only employing resources towards services. and is responsible for coming up with the lean manufacturing strategy.‖ A successful operations manager can contribute to the organizations success. It is important when employing this operations management technique to first identify those areas which waste of resources is occurring. Operations Management Lean Manufacturing Toyota is no stranger to operations management. The six sigma approach also relies on the specialization of different aspects of the six . sometimes known as ―Toyotaism. Six Sigma Though Toyota is strong in employing the strategy of lean manufacturing to their operations. retail. which saves on the time it takes to produce output units on a production line. by being smart on how they utilize the organizations resources. By removing errors and limiting the variability in manufacturing.

employees) as well as external. but in addition to this it also seeks to continually improve all areas of operations. which will produce the maximum improvement in the overall organization. At the top of this hierarchical chain are the executive leadership who serve to set out the vision for implementation of the six sigma. Another important feature of Kaizen is to focus on carrying out small experiments and measuring their results rather than implementing large sweeping changes. This strategy relies on the premise that there are only at most a few constraints limiting productivity and output. coordination and mentoring. This strategy is employed by first recognizing and addressing the largest constraint. These constraints can be internal to the company (equipment. and that the most crucial step is to focus resources into minimizing the constraint. Kaizen also involves an emphasis on selfdiscipline. specific projects. and as such the organization ought to identify these constraints and restructure their operations in order to address these constraints and thereby minimize them. policy. This idea of continual improvement is carried out on a dayto-day basis. as small changes can be judged and quickly adapted accordingly. teamwork. This approach is closely linked to the lean manufacturing approach in the sense that it also focuses on reducing wasted resources that do not add value to the end product. which focuses on incremental but continuous improvement.sigma approach. . and this system works on a hierarchy of people. and serves to humanize the workplace by eliminating unnecessary hard work and thus encouraging all employees to participate in the improvement of the organization. and then below them various levels of personnel who are in charge of broad implementation. Kaizen Another Japanese-born method of operations management is the principle of Kaizen. improved morale and suggestions for improvement from all levels of the organization. Theory of Constraints The theory of constraints is an operations management technique that suggests that typically there are small constraints that limit an organizations ability to achieve their desired goal. and then focusing on other constraints in turn. statistical projects.

However. and then leaders are organized and positioned to each work on a part of achieving that goal. the lean manufacturing technique must be employed in conjunction with other techniques so as to establish the best possible operational efficiency and waste management. each level having its own targets and goals that are part of the larger goal of the organization. such as military equipment.it was pioneered and developed by this company and the company evidently still employ the method of continual improvement and efficiency in their operations dealings and waste management. though this criticism may make sense for something which requires a very high degree of quality control in which a standard deviation of 6 is highly irresponsible. there is no need to apply this criticism to the motor vehicle industry where the six sigma system will work perfectly .this is because the standard of success is always set at a standard deviation of 6 on the normal distribution of a production curve . it can be said that the method is the Toyota method . for which they will be accountable for. This technique is often criticised but it can offer a suitable improvement to the operations management techniques of Toyota. Toyota already uses the lean manufacturing method of operations management in their production of vehicles and as mentioned above. the focus is more on the overall goal rather than specific daily goals or short-term goals. However. The first recommendation is to do with the six sigma technique. Recommendations There are a number of recommendations that can be made to Toyota to improve their operations management strategies and techniques. In this strategy. and each part being held responsible for the attainment of the goal laid out for them by the initial policy. The important emphasis is on every level having its own specific piece to contribute towards the goal. The main effort is centered around a goal. it will be recommended here that to achieve the best possible operations management strategy.Hoshin Kanri The Hoshin Kanri model of operations management focuses on policy deployment. It has been remarked that the six sigma technique is based on arbitrary standards of success . particularly by deploying policy at all levels of the organization.and it is difficult to see how such an arbitrary number can offer anything of importance to widely different products and services that require greater or lesser amounts of quality control.

well and increase the quality of Toyota's product measurably. The amalgamation of these techniques will offer Toyota the best way forward in the global vehicle industry as one of the major players in the field and wll allow Toyota to be at the forefront of quality innovation in the operations field . and any company in fact. Conclusion In conclusion. a highly motivated workforce and a decades old and highly refined waste management system. This is an incredibly successful motivational tool as it is quite obvious that a workforce that feel their voices are being heard and they have a tangible stake in the final product will work harder and far more efficiently to the betterment of the overall operations performance of the company.the recommendations made in this . However. lean manufacturing. The reason for recommending Kaizen along with the current lean manufacturing and the other recommended technique of six sigma is because Kaizen is seen as a great motivational tool. These additional operation management techniques will add greatly to the performance of the company by giving the company a tangible quality control system. The next recommendation is in regards with Kaizen. Toyota. Kaizen. as well as seeking to continually improve efficiency just like the lean manufacturing technique also employs a continual appraisal system that all of the workforce is encouraged to participate in and not only the operations management team. The six sigma system can be used alongside the lean manufacturing technique so that quality control and waste management can be suitably and efficiently controlled with the same process and management team. This technique is very general and can be applied along with any other techniques that a company may already be using such as the lean manufacturing already being used by the company under scrutiny. and the alliance of the lean manufacturing technique with the six sigma technique and the kaizen method represents that continual striving for improvement. Toyota. would be well advised to employ such a method of operations management that not only improves efficiency vastly but also raises the esteem of the production team as well. This will not only save on waste and improve quality but will ensure that the operations management team itself is running things smoothly from one optimal vantage point. it would be fair to say that Toyota already employs a very efficient and thorough operations management strategy and that to their credit they developed it themselves. in its very ideology asks for infinite continual never ending improvement.

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