Toyota case study
Task 1 a) Brief overview of the critical importance of strategic operations management to a world class company. AND b) Critical review of Toyota’s strategic operations management activities from manufacturing, product/service and administration perspectives.
a) Strategic operations management is of great importance to any organisation. The very existence of organisations in the modern competitive world depends on mass customization, Lean production, agile manufacturing, customer-centric provision (Strategic Operations Management, Second edition, Steve Brown, Richard Lamming, John Bessant and Peter Jones), and so on – depend on the ability of the organization to actually do these things. Here strategic decisions play a crucial role. In my opinion Strategic operations management is a holistic approach, covering the whole organisation, touching different aspects of business. Further strategic operations management can be vitally important in achieving business goals, and gaining competitive advantage. At this point, I find it is worth to define the terminology – ‘Strategic Operations management’. According to Slack and Lewis, operations strategy holds the following definition: “Operations strategy is the total pattern of decisions which shape the long-term capabilities of any type of operations and their contribution to the overall strategy, through the reconciliation of market requirements with operations resources”( Slack et al 2007, p69). Generally strategic operations management activities are critical to the customer satisfaction & innovation. There are four types of advantages for strategic operations management in a given business (Slack et al 2007, p22);
1. Strategic operations management can reduce the cost of producing products and services, and increase the efficiency. When we analyse the case of Toyota Corporation, it is evident that cost is one of the critical competitive factors for the corporation, thereby strategic operations management at Toyota will definitely, help the company to reduce the cost and gain efficiency. 2. Strategic operations management can increase the revenue by increasing the customer satisfaction through good quality and service. As we analyse the Toyota Corporation, we can find the emphasis on customer focus and quality, this would increase the customer satisfaction and increase the revenue for the company. 3. Strategic operations management reduces the amount of investment required by increasing the capacity of the operation, and innovative resource deployment. Automobile industry in general is characterised by neck – to – neck competition, here any reduction in investment reflects in the cost, and eventually in the price to the customer. So, it is definitely going to be important for Toyota Corporation. 4. Strategic operations management provides the basis for future innovation, by building a solid base of operations skills and knowledge within the business. This is also a vital point for Toyota, strategic operations management would help the company to develop long term capabilities, which would play a key role in the future direction of the company.
While exploring the relevance of Strategic Operations Management, it is equally important to have a look at the four perspectives (Slack et al 2007 p, 69) as follows: Operations strategy might be a top-down or a bottom-up process when considering the business and corporate strategies. Similarly, an operations strategy might be developed in response to market requirements (i.e. market-led) or be based on the capabilities of its operations resources.
Fig.1.task 01 .SOURCE: The four perspectives on operations strategy, OPERATIONS STRATEGY, SLACK AND LEWIS, PEARSON EDUCATION LTD.
When analyzing the four perspectives, it would become clear that the ‘Top – down perspective’ would help us to understand the relevance of Strategic Operations management.
The top-down perspective is the...
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