PRODUCTION MANAGEMENT

Table of Contents

Part 1. 3

Significance of Effective TQM… 3

How Quality Effects Competitive advantage. 5

Part 2. 6

Implementation of Production Management Practices. 6

Factors Affecting Toyota Global Production Management Practices. 8

References. 10

 

 

Production Management

Total Quality Management is a management framework grounded in the belief that an organization’s long-term success can be achieved by all its employees, from the lowest rank to the top, concentrate more on quality improvement. The primary focus is on progressive improvement rather than financial gains that are short term. The aim of TQM is to performance enhancement and fulfill or exceed the client’s expectations. TQM is achievable through the integration of all processed and functions associated with quality. Most organizations that have succeeded have invested more in total quality management since it yields benefits and has numerous benefits. With TQM’s help, the company can identify employees’ deficiencies and appropriate education or training to minimize the deficiencies. Total quality management is an integral part of any organization that operates in a competitive world.

Part 1

Significance of Effective TQM

Successful total quality management is significant to a company in various ways. One, an organization can focus more on addressing and meeting customers’ needs. In the current market, clients expect to be offered top quality goods and services; an area where most companies fail. Most organizations do not bother researching customer requirements so that they can offer exactly what is needed. Being in an apposition to meet the customers’ needs is essential in building a long-term relationship with customers and winning their loyalty. Focus on customers enables the company reliable goods on time with higher productivity and efficiency (Sadikoglu & Olcay, 2014). Keep the customers close, engaged, and happy, and they will never bother seeking services and goods from other competing companies.  Meeting customers’ expectations increases their satisfaction, and the company will make more sales and raise market share.

Total quality management is significant in that it facilitates continuous improvement of the entire organization. It’s is a progressive process that requires all related functions, policies, and procedures developed by management to improve gradually. Do a thorough research and engage the market to understand the challenges and developments. Then make an effort to regularly addressing the challenges and developing new techniques to improve the goods and services being offered. Through TQM, employees and trained routinely to enhance their skills and proficiencies in various fields. Effective training of employees yields sustainable quality management and better quality, which results in the company’s success. Additionally, the organization adopts unique behaviors that enable it to adapt to changes in the market and distinguish it from competitors. Quality is an overall responsibility of the entire organization, and therefore, training should be offered based on the assessment of employees.

TQM builds a winning culture among employees and streamlines the company’s leadership. Culture is a key factor that influences a company’s success; therefore, it needs to be improved continually. Total quality management modernizes an organization’s culture so that employees are encouraged to give feedback. Employees are full of knowledge since they are on the ground performing most tasks, and therefore, they understand the challenges and what needs to be improved. The company creates a culture where employees feel free to share their ideas. Then the management should consider the various ideas and implement the valid to help grow the business. In a TQM system, the leaders support employees’ development, create a proper communication channel, and utilize information appropriately (Sadikoglu & Olcay, 2014).  Leaders take charge of encouraging employees to be a part of the decision-making process. For TQM to succeed, managers are expected to show the way.

How Quality Effects Competitive advantage

Improvement of quality has turned out to be a potentially key technique of improving company performance and achieving a competitive advantage. The first way quality creates a competitive advantage is that customers, whether businesses or individuals prefer consistent and reliable products and services (Alghamdi & Bach, 2013). With the current technology, where clients can access quality assurance reports and reliability ratings, they easily decide where to get their products. Quality assurance is a key tool in achieving a competitive advantage; a higher rating gives competitors an advantage. Car companies such as Toyota and Mercedes have higher ratings higher. Hence, they record higher sales than others. For instance, durability and reliability, which are both products of quality assurance, are reasons why most clients prefer certain car brands to others.

Improved quality assurance tools minimize the cost of production more so when utilized in each stage of the production process. Rather than inspecting after completing the product and having to redo flawed goods, manufacturers adopt the total quality management technique to ensure quality at every production stage. The technique minimizes wastage of resources and at the same time creates a consistent product resulting in enhanced satisfaction of customers and cost-cutting, which are competitive advantage elements. Reduced production cost means that the company has the upper hand in creating an affordable pricing strategy, which may not be achievable by other companies.

Unquestionably, offering service and products that are superior in quality has the probability of increasing company sales. Customers need to see the value for their money. Therefore they are likely to opt for quality products (Alghamdi & Bach, 2013), which means that organizations that offer quality goods and services have an advantage over their rivals. Additionally, companies with top quality goods can have prices, unlike other firms that produce inferior quality products. For instance, Apple Inc. has always concentrated on producing quality phones and computers, thus the higher product pricing. Higher prices increase the chances of a company making higher returns. Such companies have bargaining power over the competitors as far as controlling market price is concerned.

Part 2

Toyota Motors could not be what it is today were it not for Total Quality Management.  Toyota is well known for its effective production system. According to the Fortune Global 500, it is among the ten most important organizations globally and the only one to address TQM directly. Toyota has been awarded severally for proper utilization of TQM. Such awards include Japan Quality Control Award and the prize for Demin Application in 1970 and 1965. Toyota Motors’ total quality management is based on the customer-first concept, which requires total participation and improvement of all employees. This is the core concept of the production system of Toyota Motors and has contributed to the overall improvement of the entire company but more quality of the products.

Implementation of Production Management Practices

Kaizen is the first and key production practice used by Toyota Motors to manage production systems internationally. The core principle behind the Kaizen concept to have continual improvements. They are not necessarily projects that require an investment of huge capital but small projects that should make progressive improvements. The management encourages ideas and suggestions from employees closest to the departments that need improvement, which is later used to make changes for the better (Rutledge & Simpson, 2010). However, feedback may also be collected from other stakeholders, such as customers and suppliers. The employees are expected to adhere to standard procedures set and find ways to enhance them. Supervisors collect suggestions regularly, review them, and act on them promptly. However, this does not mean that all suggestions are implemented; it is upon the managers to decide on the ones to act on. The frequent small changes lead to continuous improvements, which will significantly change after a certain period.

Toyota also utilizes the Kanban or just in time technique where customers’ demand stimulates its production. Inventory that is in excess could be termed as waste, and the cost of maintenance and storage could be high. Just in the time production technique eliminates the unnecessary cost, saving resources that could be used for other purposes. It works as a visual signal which is sent to indicate that there is a demand for a particular product. Take an example of a widget, which is formed by stem-bolt, gauge, and case. When one of the parts misses during the widget assembly, a Kanban is sent to the corresponding area showing that more parts are required. Signaling through Kanban should be timely in that assembly of the widget will have enough parts. The Kanban technique ensures that the company does not have a warehouse filled with faulty widgets. Also, it is easier to identify an error before major damage occurs.

The entire production system of Toyota Motors is controlled by visual communication (De Moura, 2017). To manage a company’s production system globally, there needs the most efficient and effective way of communication to avoid misinterpretation of information. In this case, visual communication is the most effective one. Employees receive information quickly and understand easily compared to any other communication method which could have been used. In the manufacturing department, information needs to be relayed simultaneously to various people without contradiction. Visual communication ensures quality is maintained, improves productivity, and relays required information. At no point will the various Toyota branches receive differently or misunderstand information. This is a coordinated way of ensuring that all functions run smoothly and without fail. Toyota cars and components manufactured in different areas will have similar quality as those in the company headquarters. Therefore, at no point, Toyota Motors will be in a position of substandard manufacturing products.

Factors Affecting Toyota Global Production Management Practices

Toyota has been experiencing challenges managing its global production system due to the following factors. One of the major factors is the differences in cultural beliefs. Toyota has not been able to create a common improvement culture due to differences in language and culture. These barriers result in the problematic implementation of policies and getting employees and customers to contribute. The second challenge is resistance to implement some policies. For instance, Toyota’s policies require that activities that are not valuable to the company be eliminated. The worker’s resistance to adopting such policies is due to the fear of losing their jobs since, after evaluation, some may be found not to be adding value to the company. Lack of enough resources to implement the Lean manufacturing technique. A huge investment is needed in new markets where Toyota is required to train its staff. The company may have inadequate time and capital to carry out such programs.

Additionally, the Toyota production system is challenged by top management’s lack of involvement in its implementation. Not all manufacturing sites are lucky to have a top manager who fully supports and understands the production process. There is a probability of misplaced priorities, which may lead to wrong decision making, lack of commitment, and poor communication. To have a successful process, there is a need to have proper leadership that will offer both intellectual and physical support. Also, market fluctuations and slow responses affect the production process. It is difficult to have an organized production system with inadequate raw materials and fluctuations in demand. In new offices, there are challenges to understanding the whole production process comprehensively. Thus, the company may take a little longer to adapt and produce goods of its standards.

 

 

References

Alghamdi, H., and Bach, C., 2013. Quality as a Competitive Advantage. International Journal of Management & Information Technology, 8(1), pp.1265-1272.

De Moura, D.A., 2017. Toyota production system-one example to the shipbuilding industry. Independent Journal of Management & Production, 8(3), pp.874-897.

Rutledge, J., Xu, M., and Simpson, J., 2010. Application of the Toyota Production System improves core laboratory operations. American Journal of Clinical Pathology, 133(1), pp.24-31.

Sadikoglu, E., and Olcay, H., 2014. The effects of total quality management practices on performance and the reasons for and the barriers to TQM practices in Turkey. Advances in Decision Sciences.

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