Control Measures in Toyota and the challenges associated.
Control is the act of artificially influencing something. The main reason why control exists is our determination to keep things in check. About a decade ago, the tyre manufacturing company, Pirelli ran a series of advertisements with the tag-line “Power is nothing without control.” The significance of this statement is grave to the business world. Control in business is important for the management, the owners, the customers as well as the employees. Control in business is the act of the manager or (whichever person with a supervisory role) ensuring that the business’ affairs are running in a manner that will ensure maximum profitability. This includes the introduction, implementation and maintenance of specific elements pertaining to the businesses activities.
Control measures vary from business to business depending on the size, industry as well as the labor requirements among other variables. For a small shop, control measures could be monitoring employees in sensitive areas and surprise audits. For larger businesses however, the issue of control takes a much more complex dimension. In the automotive manufacturing industry, the sensitivity of the market calls for extremely stringent control measures.
Toyota, the Japanese automaker has from the onset of its business been expanding their operations to other regions as the popularity of their cars continued to grow. In recent times, they have established a strong presence in the United States, even giving another auto-manufacturing company, General Motors a run for its money. However, to keep up with present market trends and economic factors that comes with operating in international markets spread across the world. These control measures were meant for success and they have sufficed in many respects (Bloomberg Business Week, 2005). However, the last five years have also proved to be a challenge for the company in terms of system failures that have cost them billions of dollars in the recalling of cars.
The company’s executives have instituted a series of control measures that were used to keep the manufacturing arm of the company running smoothly and efficiently. Firstly, the firm is directing its resources at their expansion efforts as well as their capabilities in these regions. This includes analyzing their capability in as regard to engineering, manufacturing, quality control and cost cutting measures.
Another control measure that has been given priority by the company’s executives is the avoidance of complacency or as they say, avoiding the “big company disease.” This is a phenomenon that is said to affect large scale companies that have recently experienced massive growth and are thus relaxed, satisfied with the progress they have made. For this reason, they intend to ensure that their operations are at par with the prevailing conditions (Bloomberg Business Week, 2009).
In an effort to cut costs and reduce uncertainty that results from the frequently changing exchange rates that are susceptible to negatively affect their operations when the Japanese Yen is strong. The good performance of the Japanese unit makes it less profitable to manufacture at home hence necessitating the increased number of manufacturing plants in the United States and other regions such as China.
Another control measure that the Toyota Company has implemented in its plants is the hands on SWOT analysis that is carried out by managers who physically inspect and sit through manufacturing processes so as to get an accurate feel of the challenges that are being experienced by the work force. Another ambitious initiative that is being carried out by Toyota company is the cutting of operational costs through massive retrenchment of as many as 5,000 casuals in its Japan plant alongside the reduction in production by half a million cars. The efforts that are being taken to reduce costs that the company has been incurring touch on virtually every facet of the company. This includes the use of stairs as opposed to lifts, road trips instead of flights and repurposing of the showroom floor to become a ballroom rather than hire a venue as was the norm in the past. In the long run, these efforts seem to be beneficial for Toyota’s books of account. The Construction of Cost Competitiveness for the 21st century or CCC21project was launched at the turn of the century and the idea behind it was to cut down the costs of component parts of cars by as much as 30% (Zhao, 2005).
It is following the implementation of CCC21 and the massive international expansion that queries began being raised concerning a slump in the quality of Toyota’s cars, especially those that were in the American market. Following a fatal accident, investigations suggested that the accident was due to a pedal that was stuck in a depressed position. Many other issues were complained about by the Toyota market compelled the factories to recall thousands of automobiles that had already been sold. This not only affected their budget but more importantly their ratings in regard to quality and safety of their vehicles (Bloomberg Business Week, 2009).
The main thing that can be assumed to have contributed majorly to this problem being faced by Toyota was an inadequate organizational structure. They have been performing well for as long as the operations were based within Japan. However when the plants started spreading all over the world, cost cutting remained a priority whereas uniformity of design and performance standards dwindled when their manufacturing was at an all time high. Perhaps it would have been better to balance cost cutting with quality assurance (Zhao, 2011).
Bloomberg Business Week (2005) The Man Driving Toyota. Retrieved from http://www.businessweek.com/stories/2005-07-21/the-man-driving-toyota On March 5, 2013
Bloomberg Business Week (2009) Toyota’s Cost-Cutting Drive: Making the Tough Choices Retrieved from http://www.businessweek.com/globalbiz/content/jan2009/gb20090128_259606.htm On March 5, 2013
Zhao, K. (2011) The Toyota Recall Crisis: Causes, Contexts, and the Impact on the Global Auto Industry. Retrieved from http://www.econed-il.org/icee/docs/2011/zhao.pptx On March 5, 2013
Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.[order_calculator]