All businesses are under pressure to raise the quality of their systems and operations
In order to support effective operations due to the rising global competition, less resources, and demand for higher quality. Total quality management highlights the mindset and organizational culture of businesses that offer services and goods to meet the expectations of their clients (Yüksel, 2012).
Motorola developed the six sigma methodology
In order to track flaws across millions of opportunities. To implement the methodology and achieve new standards and techniques, cultural change was necessary. Motorola managed to document huge savings ($16 Billion) due to the utilization of six sigma's continuous improvement efforts (Snyman and Kruger, 2004).
Kaizen - continuous quality improvement (CQI)
This is a Japanese methodology that was adopted by Toyota in between 1950-1960s and it involves the promotion of the instinct for continuous improvement through small incremental approach over a period of time (Shortell et al., 1995). The implementation of Kaizen quality management methodology highly depends on the senior organizational management. The methodology ensures increased efficiency, reduction in waste, continuous monitoring and improvement of products, increased employee satisfaction.
Total Quality Management (TQM)/ Continuous Quality Improvements
This is the earliest scientific methodology adopted in the process of improving all aspects of quality with wide application in Japanese and U.S. manufacturing sectors or in any other organization with competitive issues in implementing a disciplined approach of improving customer satisfaction (Rex et al., 2002). The management has to first identify the improvement goals and within what project these needs to be achieved. TQM seeks to integrate all organizational operation functions i.e. finance, marketing, engineering, designing, production and customer service to meet the organizational objectives and the customer needs. TQM is infinitely adaptable ad variable and a lot of organizations have been able to create different versions of TQM that are best suited for their functions (Schroeder et al., 2008).
Lean generation concentrates on disposal of waste
Of materials, time, inventory idle hardware, enhance efficiency and benefits by enhancing material taking care of, stock inventory, quality, planning, work force, and consumer loyalty. A key element is the strengthening of line specialists to actualize configuration changes and to end a procedure to maintain a strategic distance from mistakes—transforming workers into issue solvers. At first some people disputed the of idea Toyota's prosperity claiming that it was attached to social contrasts between Japan and the United States, the organization's achievement in actualizing the system in its North American plants killed the claims (Pryor et al., 2007).
TQM allows obligation chances for everybody in the association regarding quality
At each phase of generation, from the underlying plan stages to after sale deals benefit. On the off chance that an issue is discovered amid any phase of the generation procedure, it is settled by that individual, before it influences ensuing creation stages. Hence issues are resolved before they impact on the end client (Müller, 2011). The technique requires hierarchical pioneers to build up change objectives and to pick extends that can accomplish particular upgrades. Cross-functional groups devise a stream diagram of a procedure under investigation and utilize information to comprehend varieties from quality. The approach sees mistakes as results of ineffectively composed frameworks, not as the blame of individual specialists. Once groups have built up an advanced comprehension of a procedure, they begin a four-stage routine with regards to plan, do, study, act (Luo, 2007).
Mission, Vision and Values
The organizational values are best communicated through the written vision and mission of the organization that relate to the primary purpose of the organization. Companies that issue vision and mission statements that are communicated clearly, understood widely and shared collectively have recorded better performance than companies without the visions and mission statements. The company's mission and vision can only be said to be effective only if they are aligned with the organization's objectives, goals and strategies (Kumar and Ellingson, 2007).
The mission statement outlines the company's reason of being
And clearly communicates how it intends to serve its customers, key stakeholders, employees and investors. In some cases the mission statement can be used to sum up the values of the organization. On the other hand the vision statement is future oriented declarations of the aspirations and the purpose of the organization (Johnson and Whang, 2002). The vision statement bases its future aspirations on the purpose statement.
The vision and mission statement have three primary roles;
- Communication of the purpose of the company to stakeholders
- Development of measurable objectives and goals that are used to gauge the success of the company's strategy.
- Inform strategy development
STRATEGIC PLANNING AND MONITORING
When developing an organizational strategic plan there are a number of factors that go into consideration i.e. the type of management used determines if the strategic plan will be implemented using a top down approach or bottom up approach. The bottom up approach is considered to be democratic compared to the top down approach that is considered to be bureaucratic (Hart, 1992). The culture of the organization will at the same time define the behavioural approaches. Planning systems need to evaluate the impact of the strategic plans on the departmental level managers and targets.
The Ansoff matrix provides a simple way for business leaders and marketing team to identify risks of growth.
The planning methodology involves four stages of market development, diversification, market penetration and product development. The risk increases as one move from one growth strategy to another (Freeman, 2010). The BCG matrix on the other hand is used in reviewing of the product portfolio with long term strategic plans. BCG primarily helps a business to evaluate the available growth opportunities to identify investment opportunities or make decisions on developing or discontinuing products (Gunasekaran. and Ngai, 2004).
PESTEL ANALYSIS OF TOYOTA
The global automotive brands are facing lots of environmental pressures from the environment in which they operate. Amongst some of the factors driving the automotive industry is the technological shifts that have seen increased investments by competitors who are investing in self-driving vehicles technology. Competition is also another factor that influences the automotive marketing industry (Clark and Fujimoto, 1991). Here a PESTEL evaluation of Toyota that tries to provide insights into the various forces affecting the profits and market operations of Toyota.
POLITICAL
The growing operations of business on global levels entirely depends on political stability and the regulating policies for a business to operate its business I a given country. Political stability is associated with the creation of a calm business environment without political turmoil. Political instability can disrupt the distribution networks of raw materials and supply chains. Asia, the main operational base of Toyota, has maintained a stable and positive environment for Toyota to operate profitably. The political disruptions in Europe have however impacted the ability of Toyota to conduct business there with the recession (Decker, 1992).
ECONOMICAL
The passing of the economic recession Asia is recording amongst the fastest growing economies. However this is not witnessed on a global level as still some countries are struggling to emerge from economic slowdowns. Economic situation directly impact the level of employment and the purchasing power of citizens. Despite the economic challenges in other countries Toyota has managed to focus its efforts in the development of smaller cars that are economically affordable thereby increasing profits.
SOCIAL
Cultural and social forces tend to affect the sales of international brands. Toyota has dedicated lots of efforts to localization to ensure they appeal to local regional customers. The global market comprises of smaller markets that exhibit high social barriers hence localization helps advance brand acceptability. In addition to this, social trends i.e. change in preference has an effect on the Toyota business. Toyota plans to increase their production of electric vehicles that appeal to the younger generations by 2020.
TECHNOLOGICAL
Technology remains to be the backbone upon which the automobile industry is based. Improved technology directs impacts the rates of sales. Technology innovative brands invest huge amounts to improve passenger's safety. Technology has also grown to be a very influential marketing tool that allows for the connection and engagement with customers to address their concerns. Toyota aims to develop a new self-driving/ autonomous vehicle hence the need to invest hugely in technology.
ENVIRONMNTAL
Environment sustainability is a topic of concern in the automobile production business since emission of fumes result in polluting of the environment. Toyota has achieved a milestone in developing environment sustainability business strategy that resulted in the winning of reward for fuel cell vehicle that has led to reduced emissions. Still Toyota dedicates a lot of resources in ensuring that they protect the environment. Toyota is dedicated to development of the next generation hybrid vehicles, fuel cell vehicles and electric vehicles that are eco-friendly and have a lower CO2 emission rate. All this efforts serve to contribute to an eco-friendly environment (Debnath, 2015).
LEGAL
Legal compliance ensures that international companies operate within the jurisdiction of governing laws in their areas of operation. This ranges from labor laws to laws related to quality requirements, environmental protection policies and passenger safety issues. Toyota has developed internal controls that ensure that they operations are in-line with the legal compliance requirements at all levels. The corporate guiding principle adopted by Toyota is to honor the spirit and language of the law of all nations and undertake in fair and open corporate activities and most of all be a good citizen of the world.
PORTER'S FIVE FORCES ANALYSIS MODEL OF TOYOTA
Toyota remains to be one of the biggest producers within the automobile industry. However in recent time it has faced challenges from its close competitors like Volkswagen that has toppled its leadership in automobile market and brand recognition. As much as Toyota remains to be a widely known and accepted brand in the world it operates in an environment where several forces impact its business operations. The porter's five forces model is an analytical tool that allows for the evaluation of effect of competition and the strength of a brand within the market. The porter's fie forces evaluation of Toyota include;
Toyota's bargaining power of suppliers is weak
In the case of Toyota their suppliers pose a weak bargaining power. Most of the suppliers to Toyota are moderate in size and reduce their ability to influence Toyota. D to high number of suppliers Toyota has lots of options to choose from hence allowing for easy switching between suppliers. For the suppliers this means loss of business. These factors increase the control of Toyota over their suppliers thereby suppressing their bargaining strengths (Crosby, 1979).
Threats of substitutes is moderate
there is moderate level of threats presented from substitutes of Toyota. The public modes of transport is the biggest preferred substitute since it involves lower costs of switching making it convenient for many users. Threats majority of the middle and lower class people prefers the substitutes due to the economic advantage presented. Toyota has developed new models that consume lower levels of fuel, safer for family use while at the same time ensuring them area affordable to many. All this efforts try to mitigate the threat of substitutes to a small extent hence the threat remains at moderate levels.
Bargaining power of customers strong
the availability of cheaper substitues, lower switching costs and variety of options from Toyota's competitors gives the customers a strong bargaining power. The vast majorities of customers are highly informed of available alternatives and are free to decide on any brand with similar pricing and attributes. The little bargaining strength held by Toyota is due to their design and technological innovations that have increased customer loyalty.
Industrial competitive rivalry is strong
although the major global players' number is limited there exists a high level of competition. The companies employ aggressive marketing strategies. The automobile brands compete on several levels including designs, technological innovation, fuel efficiency, passenger safety and much more. The increased competency increases investments in marketing and R&D. close competitors of Toyota include Honda, Ford, Hyundai and many more.
Threats of new entrants weak
Entering into the automobile industry requires a huge capital investment to found and manage the brand. A new brand needs to extensively invest in marketing, hiring of experts in different levels, distribution system and a supply chain. For entrants to become even notices they must have a unique innovation that differentiates them from the rest. The automobile industry entry and exit barriers are huge and this limits the new entrants. At the same time the existing incumbent automobile brands are likely to exert pressure on new entrants a they have resources these includes investing heavily in research and production of new models at fast rates, heavy advertising and promotions to increase customer loyalty (Clark, and Fujimoto, 1991).
Task 2
The role of INFORMATION SYSTEMS TO SUPPLY CHAINS AND PROCUREMENT
Procurement is an important aspect of any business that is directly associated with the organization's success. Technological advancements have allowed for the change in the manner in which procurement operates. Information technology has allowed for the creation of appropriate networking infrastructures to allow for communication between suppliers and the business organizations. Most organizations are focusing on reducing the time and cost requirements of procurement processes and reducing the purchasing prices through use of technological comparative models (Hsin Changet al., 2013). In the modern complex supply chains business operations information technology is considered as a prerequisite for ensuring effective control.
Information technology is used in supply chain management for;
Transaction processing:
For this scenario IT usage is driven by the urge to reduce procurement costs, increase the transaction volumes, elimination of human errors seen in the traditional procurement models, and the speeding up of the whole process of information sharing.
Order tracking and delivery coordination:
Technology allows for in-transit delivery consolidation and business project orientation.
Supply chain planning and collaboration:
Technology is highly preferred since this process is highly unpredictable and operates in an environment that is logically demanding. The use of technology for the purposes of information sharing highly depends on the ability to predict demand. Sharing of information can bring significant value especially in scenarios of unknown demand i.e. during promotional situations and the sales of new products (Johnson, and Whittington, 2008).
E-procurement:
E-procurement has grown to be an important aspect of modern business addressing the business processes and relationships and their suppliers. The main points of focus in relation to e-procurement have been reverse auctions and online market places. The e-procurement processes can be used for the processing of orders whereby the sellers may be allowed to specify their costs and in most cases invite buyers to place their bids (Johnson, and Whang, 2002).
E-acquirement, the part of e-business which addresses the connections and procedures of a business with its providers, was an intriguing issue for quite a long while. Online commercial centers and invert barters were the fundamental concentration of intrigue. Presently the elation encompassing e-business has subsided, there is additionally less discuss e-procurement. What is the part of data innovation in the acquirement capacity of huge organizations today?
The acquirement association can essentially impact the achievement of an organization. Nowadays it works in a dynamic, complex condition and keeping in mind the end goal to work effectively and successfully it needs to make proper structures and make utilize of reasonable instruments. Data innovation can play an imperative part in this.
There are various types of e-procurement systems i.e.:
- Web-based ERP (enterprise resource planning)
- Web auctions
- E-sourcing
- E-MRO (Maintenance Repair and Overhaul)
- E-tendering
- Logistics service and international trade
The internet is the most used form of technology that influences the communication between buyers and suppliers which includes sending of invoices, delivery and availability flow of information acts as a backup to the supply chain. Technology is also used for filing of returns of goods mechanisms and supporting of various payment plans and payment platforms. Technology can also be used for tracking of transported goods through radiofrequency identifications and other communication plans.
The most vital general obtainment objective set by the organizations analyzed is the decrease of the obtaining cost furthermore, the aggregate cost of obtainment. Extraordinary significance is too joined to interior process enhancement. The most astounding need for the greater part of the organizations in the utilization of data innovation is for focal coordination and request total (50.8 %). The need of IT ought to be to offer help in the making of process proficiency and cost/consumption straightforwardness and accomplishing diminishments in the acquiring cost. For more than seventy five percent of the investigation members (78.2 %) IT makes a vital commitment to effectively doing the acquisition work. Likewise, desires of the instruments utilized are altogether met for an expansive extent of the acquisition associations (Kumar, and Ellingson, 2007).
The organizations have made considerable interests in their IT framework over the most recent five years; over a million CHF in the instance of about a fourth of the respondents. The fundamental core interest lay in the improvement of the materials administration framework (66.0 %), in the change of the detailing capacity (60.0 %) what's more, in electronic receipt preparing (54.0 %). Venture objectives were accomplished totally for 26.0 % of the organizations while the others needed to acknowledge bargains as far as costs, scope or, on the other hand, the arranged time span (Chopra, and Sodhi, 2004).
The request demonstrates that the cutting edge instruments of e-procurement and Supplier Relationship Management are just utilized reliably by a minority. Just the materials administration module demonstrates a reliably high level of utilization (67.2 %). Online-apparatuses for index based obtainment, for solicitations to delicate or buying barters and for coordinated provider collaboration are utilized just once in a while or every so often in correlation. There is likewise still potential for utilization of instruments for contract administration and provider assessment.
Various organizations have utilized technology to better their services. For this case let's still maintain Toyota. Considering that the use of IT is the backbone of most of the business operations of Toyota they have digitized their business processes especially in the procurement and supply chain sectors. Through the advanced technologies it is possible for them to place orders online and get the goods delivered to their favorable location. Goods can only be said to have been delivered when they reach the intended customer hence the company takes responsibility of tracking the logistics aspect of transporting goods to the consumers. In the future more technological advancements should be anticipated with better provisions being put in place to streamline the process of procuring product or services. Technology has proved to benefit many sectors thereby improving their efficiency, transparency of operations and more dependability (Bendell, 2006).
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