The British automakers have historically experienced dark years of decline, which saw some of the leading brand names in the industry being sold in the overseas markets. Nonetheless, the auto industry in Britain is beginning to stage a comeback with names, such as Nissan, Toyota, and Honda. During this period, the Japanese automobile industry provided a lesson that was learned by the British automobiles. This report analyzes the lessons that Japanese automobile organizations had in affluence of the organizational performance in the United Kingdom in terms of lean thinking, quality leadership, and environmental sustainability leadership. Using Toyota Automobile Manufacturing Company in the United Kingdom, this report also looks into the challenges the firm encounters in dealing with supply chain vulnerability resulting from global sourcing and recommends performance recommendations to be adopted by the organization.
Globalization of automobile industry has remained one of the great pillars of the world great economies (Sturgeon & Florida, 2000). Nonetheless, since the onset of the 1980s, it has been established that Japanese firms, led by Toyota, have continued to enjoy the highest degree of production efficiency in the global automobile industry. The has been attributed to different factors that have reflected the manner in which the organizations conduct their manufacturing processes that meet the consumer markets demand quality. The organizations have managed the automobile production industry effectively as a result of the new developments. Towards the end of 1980s and early 1990s, Japanese organizations, apart from automobiles, were all over and many people venturing into business or management publication read about Japanese corporations, their effective management practices and the competitive advantages that they imparted. Particularly, there was much interest in the famous ‘Three Pillars’ of Japan’s major corporations, which incorporated permanent employment, rank-based recompense and promotion, as well as enhancement of organization trade unions. These facets were considered safe in enhancing effective employment ties and joint commitment between the employer and employees. Therefore, the history of the Japanese auto industry provided a great lesson for the United Kingdom automotive industry. This report critically assesses the lessons that have been learned and the affluence that the Japanese car manufactures have had on the organizational performance of the UK/EU automotive manufacturers as a result of their because successful experience globally (Ahmadjian & Lincoln, 2001). The report also investigates the challenges faced by the manufacturing industry and give recommendations for the performance objectives that need to be adopted by the organization.
Affluence of the Japanese Manufacturers to the UK Automobile Industries
In the three main nations namely America, Europe and Japan. This led to a stiff global competition among the nations, which was heightened in 1980s. Initially, in comparing the automobile industry among the nations in the early 1980s, many studies concentrated predominantly on the production cost and assembly output between the Japanese and the US automobile manufacturers. However, the relative analysis that took place later in 1980s extended the scope of the research physically by incorporating the European manufacturers. According Radeka (2009). to these studies, it was apparent that there are several elements that drive success in the average performance of the Japanese automobile assemblers and producers, which was expressively higher as compared to the American and European industries with regards to assembly productivity, production quality, product development, lead time and dealer satisfaction among others elements.
Despite the fact that the production and competitive gap between the Japanese and the Western averages constricted later on, the Western automakers had learned a lesson from the Japanese automobiles who maintained the competitive advantage throughout the 1980s. Numerous factors led to this upper hand in the Japanese competitive advantage that the UK automobiles learned from. This report discusses the concept of lean thinking, quality leadership and environmental sustainability leadership.
The concept of lean and lean thinking is widely referenced to the production model that was pioneered by Toyota in Japan. Later on, the concept became a machine that transformed the whole world, particularly the Japanese automobile production methods as compared to traditional Western mass production systems. This model also decorated the superior performance of the Japanese automobile industry as compared to the European industry. The concept of lean thinking is traced back in Japan in the 1940s by the Toyota Production System (Surowiecki, 2008). This was grounded by the automotive industry aspiration to produce a constant flow that was not dependent on production runs to be effective. However, this system was based on the fact that a small amount time and energy to process a product added value to the end customer.
However, this model was a direct reverse of the production process model that was being practiced in Europe, which was characterized by mass production that was dependent on materials resource planning (MRP) and the mass manufacture values that were initially advanced by Henry Ford (Holweg, 2008). The concept of lean originates from the benefit of the production technique that focuses on human effort, manufacturing space and investment to come up with a new product to meet the consumers’ need. Through the lean thinking, the Japanese automobile industry identified the concept of value, eliminated waste, and ensured general value to the customers. Several benefits that accrued from the model were later on adapted by the European automobile manufacturing, for instance, a reduced lead times for customers, low inventories for manufacturers and enhanced knowledge management.
Another difference that existed between Japanese and European automobile industries in the organizations style of management. Despite the fact that the industries in the two nations tried to incorporate certain rudiments of American Fordism, they were different. The Japanese auto maker’s leadership, Toyota in particular, created a distinctive system of manufacturing, acquiring and produce development that joined the notion of the Just-in Time paradigm and Total Quality Control (TQC). This was commonly called the production system. Importantly, the quality leadership of the Japanese automobile system focused on the continuous enhancement of productivity and quality through employees’ empowerment. Additionally, the production system by the industry in Japan as a result quality leadership also focused on cross-functional communication within the organization and external communication with customers and suppliers. For example, during the familiarization and assimilation of given indispensable rudiments, the Japanese auto manufacturers did not adhere to the strict specialty as in the case of Fordism but molded in a different form.
The Toyota company advanced a multi-practiced work organization where employees were skilled to undertake manifold responsibilities in their work stations and teams. Furthermore, the automobile industries also ensured that supervisors and employees in the shops were accountable for resolutions and unceasing progress.
Additionally, through quality leadership, the Japanese automobile imported their technology, thereby evading the risks of high R&D expenditures. They managed to undertake this through negotiated license agreements to create practical new products. Through incorporation of the strategies, the industries were able to build ability in acclimatizing prevailing product designs and speeding up production processes, therefore, coming up with greater quality at competitive prices for their automobiles. This was significant in providing them a competitive edge in the global markets, which was also a lesson to the European automobile manufacturing industry.
Environmental Sustainability Leadership
Furthermore, in the early 1980s, it was apparent that Japan enjoyed the leading position in the automobile because of effective sustainability leadership. Immediately the Japanese motor manufacturers’ market position started to boom in 1970s, there was a major concern about the 1973 Arab oil impediment and ensuing increase in gas prices. This means that many vehicle clients in the global markets were forced to change to small fuel consumption vehicles. Because the Japanese automobiles were already deep-rooted in the small car market, they experienced a substantial natural competitive advantage in the market (Okano-Heijmans, 2012). This was as a result of the leadership sustainability strategy that saw production of less consuming fuel cars that were aimed at preserving the environment. This was also another facet that impacted the need for better organizational performance by the UK market to enhance their automobile productivity.
The automotive industry in the United Kingdom has experienced both positive and negative growth; nonetheless, several organizations have thrived in the last decades. This trend has been common in most European nations, for instance France, Italy and Spain. Since its inception in 1937, Toyota Motor Corporation has strived to build quality automobile through the capitalization of the Japanese concept of continuous improvement. The company has built a worldwide reputation for manufacturing affordable quality automobiles leading to its consideration as a conservative company. This is because of its concentration on quality and competence in establishing re-known brands in Europe, United States and across the globe. The organization’s entrance into in the United Kingdom market saw a major transformation in the automobile industry. Despite enduring all the market challenges, Toyota UK has strived to gain root in various markets across the world, which has seen it experience rapid growth over the years and the last decade proved productive as it was able to surpass established automotive brand in the other regions, for instance, Ford and Chrysler.
A phenomenal achievement of the company occurred in 2007 when it obtained billions of profits, making it the largest amount in the company’s history and the biggest ever for a Japanese company trading outside the Japanese market. Despite the fact that the 2008 worldwide recession greatly affected the world economy leading to sudden drop in sales of automobiles, Toyota gained from the drop as it was able to increase its market share to become the world’s largest automaker. General Motors previously held this record for 77 years. However, it is critical to observe that although Toyota was able to increase its market share surpassing other automobile companies, during the recession period, it recorded one of the major historic loss.
Toyota UK has experienced several challenges, particularly in dealing with supply chain vulnerability resulting from its sourcing from low cost nations. It is apparent that many of the cars are outsourced and exported to different nations. There are several challenges that organization encounter apart from the losses observed from the 2008 recession. For instance, the 2008 recession resulted in emotional accidents of the firm motors leading to 52 deaths that were seemingly as a result of the acceleration problem. These necessitated recalls of several automotive industry products, especially in the U.S. In such a situation where the organization outsources its production process, there are several challenges that affect the complex global supply chain. Since the organization sources from low cost nations, getting car dealers across the globe for repairing the cars becomes intricate. Furthermore, this also provides a huge challenge in signaling all the car owners across the globe besides sourcing materials for the new parts of the cars globally. The organization needs to fix the unplanned procedures of recruiting new employees in both the plants and extensive supply chains that entail additional costs.
Given the fact the automobile organizations operate under a lean manufacturing strategy, which implies that stock is only manufactured in relation to demand and limited spares, this also becomes a huge task for the outsourcing organization (Shimokawa, 2010).
Toyota UK supply chain has also been enhanced by the notion that there are cheaper labor costs, which highly determine the decision concerning the location of the plants. It is apparent that wages are significantly higher in the United Kingdom as compared to other places, for instance, Eastern Europe. Nonetheless, the other challenge for Toyota UK is that despite the fact that labor costs are low in low cots nations, other legacy costs associate with outsourcing from the nations, for instance, pensions and traditional obsolete employment practices are still active that the organizations need to endure. This also affects the company operations in supply chains.
One of the strategies that Toyota need to incorporate fully and uphold is the importance of product quality in its adoption of “Total Quality Control” as a way of competing against well-established car manufacturers. This is because the organization had undergone a reputation damage and it strived to build in the perception of the general public; especially the Japanese, for whom Toyota is the commercial face represents the country to the outside world (Minhyung, 2010). Through this approach, the organization will ensure that machines in the plants remain significant at all levels of production. Therefore, the engineers will continue to emphasize on the continuous identification and elimination of waste. As a result, the Toyota Production System (TPS) will be able to use fewer resources than mass production. Different firms have discovered that by through detecting and removing waste besides effecting important lean tools, they can constantly enhance their production, upsurge value, and become more cost effective.
Furthermore, extensive manufacturing runs, immense accumulations, and elongated are increasingly becoming outdated forms of in their operations. The reason behind these facets in the automobile industry is the necessity by the customers who increasingly expect products that are designed precisely with their specifications and delivered on time.
Toyota organization also need to develop a robust basis that will reflect the future of the organization, which will reflect the firms long term well-being. These can be attained through ensuring quality three main elements of preach phase of the supply chain beginning with product development and extending to after sales services. The products ought to be the best in the market and sold through the best service networks. Moreover, Toyota company needs to maintain the tendency of quick-response in case of any emergency or arising issue in the market globally without having excuses, particularly during the delivering process. In many instances, the manufacture ring organization might find itself in uncomfortable situation of having to obey the needs of clients, which is normal. Failure to observe these facets will lead to the firm having a low completive edge as compared to other organizations who aim at meeting the customers’ needs within a short time cycle (Minhyung, 2010).
Moreover, the organization need to put in place strategies that will ensure that in a lean context, the existence of collapses should not be part of the firm processes at all costs. This can effectively the organization machinery to avert any hurdles or failures. This is achieved by a scheduled maintenance programme or conditioned-based maintenance (Li, 2013). To enable preventive maintenance, other supportive approaches such as autonomous maintenance or training of machine operators are necessary to make a preventive maintenance system work effectively. Training machine operators is a necessity for the successful implementation of Total Productive Maintenance (Sugimori, Kusunoki, Cho & Uchikawa, 1977). Furthermore, the overall equipment effectiveness can be increased by ensuring that maintenance prevention machines are improved during the development process.
Currently, the world is experiencing several researches in the manufacturing industry, which is significant in controlling production and management. This has been enhanced by the introduction of information technology for the past decade. For instance, towards the end of 1970s, there was a massive outburst of focus on materials supplies, design and the prospects that were manned and controlled by advanced mechanization through technology. Accordingly, this provided an opportunity by several creative thinkers in the automobile industry as a mechanism of integrating sophisticated strategies as well as industrialized know-hows commonly referred to as computer-integrated manufacturing (Čiarnienė & Vienažindienė, 2013). This technological advances are what Toyota Comnay need to continue to integrate in their manufacturing plans so as to meet the customers’ and gain competitive advantage globally. Innovation in technology id being discovered everyday besides different automated cars that are being produced with different automated features. Therefore, for the organization to remain relevant in the market, technological innovation is key.
At the same time, the world of general management was dominated by questions about the nature of manufacturing work (Thun, Druke& Grubner, 2010). Furthermore, the organization management also need to ensure that the needs of its employees are being met accordingly. Best output comes from well-motivated employees. Therefore, for Toyota Company to experience better output, I would also recommend that the organization strives to meet the needs of its employees in terms of remuneration, better working conditions and enhancing their skills.
The emergence of revolutionary digital technologies in 1990s made organizational capabilities designed to deal with complex products and operations less important. Most of the new digital products, driven by electrons and governed by abstract logic, could be modularized more easily than traditional mechanical-analog products. These undercurrents led to a broad expectation that manufacturing innovations of the future would revolve around lots of computers and workers doing lots of varied and fulfilling role that the organization need to incorporate (Chiarini & Vagnoni, 2015). This implementation in Toyota Company will ensure that the organization embraces standardization of work to an apparently enthusiastic degree, and a level that is enhanced by computerization mode of operation in the manufacturing. Although there has been a great deal of research done on the competitive functions of Toyota-style manufacturing systems, including the Toyota Production System (TPS) and on the historical development of the systems, little research has been conducted to persuasively link the two.
Toyota style manufacturing capability has garnered significant attention from both Japanese and non-Japanese companies since 1990s. Firms that have adopted this system include Japanese automakers in the 1980s, non-Japanese automakers in the 1990s, non- automobile manufacturing firms worldwide in the 2000s, and non-manufacturing firms such as hospitals and supermarkets in recent years. One conclusion that can be drawn from the history of Toyota-style manufacturing capability is that a complex coordinative system like this is not always the result of a deliberate strategy; it often results from evolutionary processes of emergent capability-building.
Since 1970s, Toyota-style manufacturing systems have been recognized worldwide as a major contributor to industrial performance. They have even been effective in non-manufacturing sectors, where the basic principle of flow orientation has been applied in the form of “Lean Service.” However, the sudden collapse of Toyota’s profit performance in the wake of the U.S. financial crisis coupled with the company’s product recall problems raised doubt in the minds of many people both in the UK and other places outside Japan regarding the effectiveness of the Toyota-style system (Toyota Motor Corporation SWOT Analysis, 2016). Additionally, even before this “Toyota shock,” the industry’s customers across the globe had become less interested in adopting Toyota-style manufacturing systems. Furthermore, in the evolution of any manufacturing system, luck or fortune may play a role, but it is never the principal component. This means that as an organization, Toyota needs to focus only on strategies that seize the opportunities that fortune presents. Therefore, the organization employees need to be trained to understand that they possess evolutionary capability. The physical world of the 21st century, with its increasing environmental and energy constraints, is growing even more complex and trend will continue. Toyota employees, therefore, need to create automobile products that are designed to deal with such a complex world of limitations that continue to become more complex and integral according to theories of design and architecture. This will ensure that the organization attains a competitive advantage.
Moreover, as the users of such automobile products or cars become more experienced, their functional requirements and expectations tend to increase, and the artifacts’ designs will become complex and integral, as other things remain equal. As a manufacturing organization, Toyota needs to continue upholding a steadfast manufacturing capability, which will see it attain a superior competitive performance and stable profit performance for such a long period of time due to the manufacturing, improvement and evolutionary capabilities. For a long-term competitive advantage in a changing environment, a firm must possess these three capabilities.
The organization also needs to incorporate a new group of low-cost low-performance models, with a new value network. This can lead to reversing the concept of product complexity that will meet the needs of customers within a given value network since they tend to become increasingly demanding, thereby making the product models more complex (Netland, 2013). Thus, the presence of streams of new value networks from the organization will likely average complexity of a given automobile product category. This will also enhance the importance of complexity-handling capabilities, including Toyota-style manufacturing.
The wage gap between advanced countries and emerging economies has already started to narrow, as the former stumbled and the latter expanded. For example, the relative wage ratio between China and Japan as of 2012 is between 1/5 and 1/10 in many cases, and the gap continues to narrow rapidly. This implies that the relative productivity ratio in the industry once again increases its importance in determining the relative production cost. Such cost calculations may partly explain why there is renewed interest in Toyota-style manufacturing methods among certain global firms and industries. Therefore, there is a need to revive the Toyota-style manufacturing routines and capability as a key strategic tool for global management and maintenance of a competitive advantage.
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