Discuss about the Management Leadership on Quality Performance.
The aim of this report is to focus on the concepts of entrepreneurship and innovation applicable on Toyota Motor Corporation, the largest automobile manufacturing company headquartered in Japan. Entrepreneurship is considered as willingness and capacity to develop, manage and organize a venture while facing risks to make profitability. Innovation is one of the most important pillars of entrepreneurship as it remarks improved products, service, operational process and creative structure (Ryan & Giblin, 2012). This report considers Toyota for the application and implementation of innovation in practice including their production system, managerial and supply chain innovation. In the past decades, Toyota has contributed to the automobile industry and gained significant advantage over its competitors (Nambisan & Baron, 2012).
Innovation is a diverse concept that involves successful exploitation of new ideas. Innovation can be made in different forms namely: product and process innovation. The product attributes change the way it is noticed by the customers. The process of product or service can be changed as it is necessary to innovate in the medium and long-run (Galindo & Méndez, 2014). Innovation adds to differentiation of products thereby enhancing competitive advantage. The benefits of innovation are not limited as Toyota has access to globalized world. The company needs to understand the dynamic nature of innovation so that it can be defined and aligned with its vision. The emphasis on innovation is put by the entrepreneurs in the form of new products, services, forms of organization and market structures. An entrepreneur pioneers change as he has high aptitude for creating wealth (Ben Letaifa & Rabeau, 2013).
The entrepreneur links the production activities to real marketplace demand so that the quantities of items are used as and when needed. TPS or Toyota Production System is referred as the grand daddy of process innovation. When Toyota began its journey, it completely changed the landscape of manufacturing by introducing concepts such as pull production, Single-Minute Exchange of Die (SMED) and Just-in-Time (JIT) manufacturing (Aguado, Alvarez, & Domingo, 2013). The concept of pull production applied in Toyota, also known as kanban system, is applicable to avoid overproduction. The purpose of the system is to have a measure of raw materials, components, work in progress and any other thing that shall be pulled in the next step of production (Schilling, 2015). Therefore, it is analysed that Toyota applied the concept of entrepreneurship by providing the customers exact amount of goods at the right place and right time. The entrepreneurs of the organization manage the flow and production of materials in just-in-time system. Kanban or pull system eliminates the need for card and signs and manages inventory efficiently (Aguado, Alvarez, & Domingo, 2013).
The powerful and effective production system is considered as unique as it offers superior value to its customers. There is organizational competitiveness in the organization. Another lean production method is Single-Minute Exchange of Die (SMED). Toyota discovered that it was extremely difficult to change the dies producing large body parts of a vehicle (Wesseling, Niesten, & Hekkert, 2013). Therefore, the engineers took the first improvement method by placing precision measurement devices. This contributed in great success and economic lot size was reduced by effective entrepreneurship. The Just-in-Time production saves warehouse and other unnecessary costs to improve efficiency. It also involves organization and delivery of component parts so that the pre-existing issues can be addressed immediately (Alpenberg & Scarbrough, 2016).
Therefore, in the above case, Toyota has used innovation as a specific tool for entrepreneurship. As a start-up, Toyota had explored multiple opportunities to address the needs and meet the dynamic needs of production system in the automobile industry. The entrepreneurs empower the team members to optimize quality by eliminating unnecessary waste in the production process. The entrepreneur entrusts the employees with well-defined responsibilities encouraging every team member to strive overall improvement (Heller & Darling, 2011).
An efficient supply chain management is required to deliver the right products to customers at the right time. With the rapid increase in globalization, the entrepreneurs need to think more proactively and innovatively to balance product cost and flow throughout the cycle. Every product moves through different life cycle phases such as meeting demand and fulfilling customer needs (Prajogo, Oke, & Olhager, 2016). The emphasis is gradually shifting the improve supply chain efficiency and reducing cost while maximizing profitability. Toyota’s supply chain helps in integrating with the production system and allocating resources effectively. The company has significant ability to work with its suppliers and establish network (Hsu, Jayaram, & Laosirihongthong, 2014).
The company and its partners concentrate on sharing organizational alignment, cultural similarities and proximity. The supply chain of Toyota employs domestic production where significant percentage of components and materials are brought by the local partners. When Toyota entered the European market, it established a strong inter-organizational that is considered as one of the most important innovations (Matsuo, 2015). Toyota has a unique two-tier supply chain that ensures fast and smooth delivery. There are two parts centres that are used for emergency freight and safety stock to absorb interruptions in supply for ensuring consistent service to dealers (Lee, Ooi, & Seow, 2014).
The centralization of inventory adds to better handling and transportation in the supply chain. Centralization helps in better control and availability while enabling economies of scale, re-sorting, packing and picking of materials. Toyota has established partnership with a limited number of third-party logistics providers to deliver logistics services. Toyota needs a place to store supplies and avoid piling up too many assets. Toyota Motor Corporation is currently one of the model companies worldwide in many aspects of conducting a successful business practice, including supply chain management (Roh, Hong, & Min, 2014).
Managerial innovation is considered as one of the most important aspects as Toyota integrates all processes to shape its own competitive advantage for efficient management. Management innovation involves the fourteen management principles that reflect true essence of innovation and entrepreneurship. One of the principles followed by the company is that the management decisions are based on a long-term philosophy. To meet the short-term financial goals, Toyota needs to make effective management decisions (Eftekhari & Bogers, 2015). The management team creates a continuous process flow for bringing the problems to the surface. The company levels out the workload where employees are trained to work a constant but good pace. The organizational culture is built in a manner that prefers getting the best quality at the first time and fixing problems (Khan & Naeem, 2016).
The managers standardize the tasks and processes for employee empowerment and continuous improvement. Visual controls are used by the management team so that no problem is hidden. Only tested ad thorough technology is used by the automobile company for serving the people and process. Another principle is to grow leaders who know and understand the work inside out. Not only understating, but the leaders are expected to teach the same to subordinates. Exceptional people and team are developed who follow the company philosophy. The team members respect the extended network of suppliers and partners by challenging them to help improve (Teoman & Ulengin, 2017).
The Toyota managers are expected to ‘go-and-see’ operations as they cannot have an understanding without observing. The decisions made by the management are shared in a timely fashion, reported, informed and consulted in a timely manner. The decisions are made slowly, thoroughly after critical analysis. Toyota challenges people to do better, help suppliers to fix their problems. The base lies in problem solving nature through improvement and continuous reflection (Back, Parboteeah, & Nam, 2014).
Toyota is a learning organization and the management continually strives for improvement. Toyota rewards its employees who are loyal to the company while protecting the company and maintaining a positive spirit throughout the organization. The managers think outside the box hat contributes in innovation. The cross functional teams fix the problems and help the company in being a better supplier. The company empowers the employees to grow and improve while maintaining high quality. The management manage production systems, supply chain and integrate other functions together while avoiding wastage, maximizing productivity and profitability (Volberda, Bosch, & Mihalache, 2014).
Conclusion
Conclusively, Toyota has a positive innovation culture as the entrepreneurs have a positive attitude. The entrepreneurs of the organization manage the flow and production of materials in just-in-time system. The effective production systems have contributed in great success and economic lot size was reduced by effective entrepreneurship. As a start-up, Toyota had explored multiple opportunities to address the needs and meet the dynamic needs of production system in the automobile industry. The supply chain of Toyota employs domestic production where significant percentage of components and materials are brought by the local partners. Toyota has established partnership with a limited number of third-party logistics providers to deliver logistics services. The management team creates a continuous process flow for bringing the problems to the surface. Toyota challenges people to do better, help suppliers to fix their problems.
References
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