Introduction Performance is broadly judged on the basis of output with respect to input.

When the ratio of output to the ratio of input is higher it indicates or is a measure of systems efficiency and effectiveness. But in accordance of output to input time period also has to be taken into consideration. In today's fast changing business environment organizations struggle to achieve competitive advantage for growth and survival. Be deployed by system operations irrespective of its application in functional areas of marketing, procurement or logistics. Resources are very scarce so it becomes a major priority for companies to effectively and efficiently utilize them Logistical operations require deployment of a lot resources for movement of goods and information across the supply chain. Hence monitoring, controlling and improving performance of logistical operations is very important in order to achieve goals of cost reduction and customer satisfaction.

Performance Measurement System Objectives There are certain criteria on the basis of which performance is measured; any performance measurement system shall have the following Objectives: Monitoring Controlling Directing

MONITORING It refers to the present status of operation to the management. Monitoring system varies from one department to another department. Financial monitoring system reports to the management regarding inflow and outflow of funds. But in case of logistic monitoring system it reports on cost break-up across various logistical activities like:

Warehousing Transportation Packaging Material handling etc.

CONTROLLING Every firm or business organization has a set standard for performance measurement. The objective of controlling measures actual performance or output with that of the set standards. It measures the variance, difference or deviation from the set goals. For e.g.: out of 100% if the control system has 60% of the order fulfilment rate then it indicates 40% deviation. DIRECTING Without proper direction there can be no satisfactory output in spite of the input. Motivation plays an important role in enhancing and improving the performance measurement system. Rewards and incentives are one of the few motivators that enhance individual efficiency. For e.g.: the ware workforce engaged in material handling may be motivated through rewards for crossing the targeted dispatches in a specified time frame or even before that. LOGISTIC PERFORMANCE LEVELS In logistics performance measurement is done two different levels: 1. Internal measure 2. External measure There should be a balance between both internal as well as external measure. The internal and external measures include various factors which should also be taken into account they are: EXTERNAL MEASURES: 1. Customer satisfaction

2. After sale service 3. Customer demand INTERNAL MEASURES: 1. Cost 2. Quality 3. Productivity 4. Asset MANAGEMENT FINANCIAL MEASURES: 1. Operating Cost 2. Return on investment NON-FINANCIAL MEASURES: 1. Productivity 2. Asset Management 3. Order fulfilment 4. Quality CUSTOMER PERCEPTION MEASURES: 1. Customer feedback 2. Value added services INNOVATIONS: 1. Benchmarking

LOGISTICAL AUDIT For enhancing the performance of the logistical system it is necessary to take stock of the efficiency and effectiveness status together, this process is called Logistical Audit. It reveals the weak link in the logistic supply chain. A logistic audit measures the capabilities and

qualities of the logistic operations and highlights resources for rationalization and cost reduction. Terms is done on the following basis or criteria: 1. Quality 2. Technology 3. Productivity 4. Packaging system 5. Automation 6. Warehouse capacity 7. Strategic logistical planning 8. External factors LOGISTICS PERFORMANCE CONTROLS. To direct the logistical activities for competitiveness in an organization, a powerful control mechanism needs to be evolved and implemented. Usually organizations go for the following two types of Control Systems: 1. Budgetary Control System 2. Structural Control System BUDGETARY CONTROL SYSTEM Every firm fixes up a budget for each of the logistical activities. These budgets are irrespective of the original reporting structures. Earlier these specified limits on application of funds on each cost centre. Any differences in costs are acutely supervised. Here emphasis is more on cost saving instead of customer service.

STRUCTURAL CONTROL SYSTEM. Controls are exercised through proper organizational structure. An organization having cost as its differentiation strategy will have various levels of reporting structure to cut cost at higher levels of investment proposals. But customer focused organization will have a flat

reporting structure. It focuses on improving and tracking the health of the supply chain to remain competitive.

Managing Performance Case Study The Toyota Toyota presents one of the most fascinating success stories in the organizational history in the world, especially when the automobile industry is looked into. An entity born out of a cloth weaving company, Toyota in sixty years established itself as the worlds largest automobile company, with sales of 8.81 million vehicles in 2006. However, the journey has not been easy for Toyota. With initial problems of setting up an automobile manufacturing corporation in Japan to breaking into the international markets, while maintaining a high level of quality, Toyota overcame several hurdles before implementing its current setup. It is important to understand the climate that Toyota actually was established in. World War II had just ended, and the Japanese economy was in tatters. In order to establish itself, Toyota faced four key problems:

The size of the Japanese domestic market for automobiles was much smaller when compared to the western countries, like America. To have an efficient massproduction facility was out of the question as the cost for manufacturing would never be realised.

Effects of the war on the economy had left little room for new investment to be raised. This meant that ambitious projects, like Toyota, would not be able to secure financing as the business system was not willing to risk on something that had large chances of failure.

The end of the war brought American administrators to Japan, who devised new functions for the business system to follow. One of the laws introduced related to labour power, which gave workers a strong right to bargain for their benefits, and made the redundancy option difficult for employers. This, in turn, meant an increase in wage costs for the employers.

More established auto manufacturers in America and Europe, like Ford and Volkswagen, had the size and financial resources to enter the Japanese market, and begin operations of their own brands. This meant competition with well-established organizations, that had decades of experience in the running of assembly lines for automobiles.

When the new Japanese government assumed control in 1950, they introduced high tariffs on the importation of foreign cars and blocked all forms of foreign direct investment (FDI) into the local automobile industry. While this may seem as an uncompetitive move, the premise was to give time to the local manufacturing industry to come at par with the demands of the market, and allow for a stronger foundation for Japanese manufacturers to streamline the processes. However, this action could not help in matters of quality control and efficient manufacturing, and provided little help to the Japanese automobile manufacturers who were struggling to finance and compete with their Western counterparts. In context to the labour issues, Toyota was able to work out a deal with its workforce which effectively removed any form of unionisation from the corporation. It is pertinent to mention that labour unions are not a common feature of the Japanese business system, and most are company-oriented rather than industry-wide like the West. Additionally, the unions normally play a part in effectively communicating the vision of the company to the workforce. The fact that Toyota ensured life-long employment and salary grading by seniority gave it a loyal and dependable workforce to push its goals for quality and efficient manufacturing of automobiles. Toyotas foray into the automobile manufacturing sector was from its understanding of the machines that weave high-quality cloth and the knowledge of the subject gained from education by its founder Toyoda Kiichiro. The key problems that it faced by the 1950s were in the implementation of mass production facilities that were efficient and cost-effective, including the supply of the various parts used, and the marketing of the cars to the international market. In terms of marketing, Toyotas initial goal was to cater to the domestic Japanese market. With time and growth, the prospects of entering larger markets enticed Toyota. However, these markets came with two key obstacles: stronger competition from well-established manufacturers like Ford, and a unionised national workforce which possessed strong bargaining power under the law. The key figure-head in the transformation of Toyota was a mechanical engineer, Ohno Taiicchi. Ohno had worked within Toyotas weaving entity prior to the foray into the automobile unit. As the initial manufacturing process followed by Toyota was the same as

Ford, which had become an industry-wide accepted method, Ohno began to study the problems with the system and came out with the following five:

The build-up of inventories of parts due to the long production line meant high costs. There was the cost of the storage of these parts, as well as the invested capital which laid tied up in these parts till they could be used in the manufacturing, and the finished product sold.

Equipment used to stamp body parts and manufacture various components were setup at the initial stage of the day. This meant that a mistake in the setting at the beginning would result in a large number of defects down the production line.

With workers assigned to one task in the production line, there was little thought given on quality control. Due to little incentive being given to this aspect, the perception in the minds of the workers was to keep doing their task, as quality control personnel down the line would catch any defects. However, this meant that repairing these defects would result in an increase in costs, as well as low productivity for the day.

The high level of segregation within the workforce meant having additional personnel to simply supervise, or inspect quality, or perform other maintenance duties as required. Logically, these duties could be performed by the line workers, and these members could also be utilised within the normal production process, while performing additional aspects of the process.

There was little flexibility for diversifying the product portfolio, and introducing changes that the customers desired. This was primarily due to the already produced parts that were going to be placed in the design already specified in the production process. To develop new parts that conformed to market demands meant significant investment into research and manufacturing, as well the availability of skilled labour; both of which were not available to Toyota at that stage.

In terms of manufacturing, Toyota undertook the following steps to bring into effect an efficient and economical process:

Segregation among the workforce was removed, with teams of workers being formed that were led by a member among them, known as the team leader. All workers were required to be quality inspectors as well as maintenance specialists. The provision of multiple tasks meant that workers were more involved in the overall process, and had

a chance to come up with ways to improve or correct any imperfections during the manufacturing. It also prevented a large quantity of defective products being discovered at the end of the production line.

Dies used in the stamping process were normally changed by the specialist workers. During this process, the line workers remained idle. In line with the new duties, regular workers were assigned with the changing process. Through trial and error, the time for the changing of dies was reduced from days to 3 minutes. This hammered the Western timescales of 2 to 6 hours for the same process.

The cost of holding large inventories meant a lack of financial resources to invest in expansion and improvement. What Toyota discovered was that by doing smaller batch manufacturing, the process became more economical. Additionally, outsourcing the manufacturing of parts could help in reducing the companys resources on that step, and incorporate more into design and production. Thus, partnerships with local suppliers were established, with terms that suited both parties. Toyotas vision was to help the suppliers to the maximum, as that allowed them to reap the benefits of higher quality of parts and lower costs. It also provided an avenue to cater to consumer needs and demands, and bring changes to the design and components of the automobiles.

The manufacturing process implemented and perfected by Toyota was coined as lean manufacturing. It relates to the cutting of overhead costs, and introducing efficient methods of utilising the full potential of the workforce, the network and the organization. In recent years, Western manufacturers have tried to copy the system developed by Toyota, but have so far not found the success that the inventor is enjoying. One of the reasons to explain their failures is the variation in business systems. The Japanese business system relies on longterm connections with suppliers and stakeholders, as they are believed to be vital to the overall success of the organization. The Anglo-Saxon system is more dynamic in its approach, and connections with stakeholders are up to the point of services being rendered or products being delivered. This means that the suppliers do not have a vested interest in the manufacturer, since the latter could go off to other suppliers to reduce costs or seek more favourable conditions. In terms of the steps taken by Toyota to counter its problems, the one that did result in initial failure was its expansion in the US market. A key factor for this was a lack of understanding of the market and the consumers; since unlike their Japanese counterparts, size played an

important part in the decision-making process of an American auto buyer. Hence, Toyota had to pull out after their first foray in the US accepting heavy losses of investment and lack of demand. Overall, the journey of Toyota to increase efficiency and build a network within its local industry to better serve the needs presents an ideal scenario for many corporations to copy. The fact that the local culture and institutions helped Toyota make changes necessary for their improvement, does not take away the innovative concepts that came out, or the fact that the worlds largest automobile manufacturer was the child company of a textile weaving organization, with no prior experience of the auto industry. The Toyota way of performance management Toyota since a large employer, who has employed 317,716 employees, has effective performance management system. The Toyota way of performance management is unique to Toyota Motor Corporation (Mcphaul, 2005: p32). The performance management process of Toyota is started with planning process. At this stage, the chairperson of Toyota gives his objective for the financial year. It is clearly indicated what he wants to achieve during the year. Also these objectives may include long term plans of the organization. Further, these objectives are selected from the corporate strategies of the company. These objectives are followed by the next level of hierarchy. Accordingly top management to operational level these objectives are followed. These all objectives are properly documented. Hence, at the beginning of the year all employees are well aware about their objectives for the next financial year. The second stage is regular discussions of objectives. Toyota has effective methods for regular discussions. Those include guidance programmes, critical incident books, midyear review, etc (Thun, 2010: p18). At the guidance programme employee can discuss their shortcoming and line-up again to achieve company objectives. Also critical incident records are maintained by managers to analysis the performance of their respective employees. Further, midyear review is a good tool to analyze whether employee are in correct tract. Then assessment stage is critical. At Toyota, all compensations, promotions, career development plans, succession plans, and training and development activities are depended on the performance assessment of respective employees (Mcphaul, 2005: p32). Normally end

of the financial year the performance assessment is conducted but it is an ongoing process. During the year employee performance are measured by using deferent methods. For these measurements both qualitative and quantitative methods are used. Finally, at the end of the year these all results are summarized and compared with the year-end results. The rating obtain by respective employees are very important. Firstly, their salary increments, bonuses, and any other compensation depend on the rating, which they obtained throughout the performance management process. Also, their promotions are depended on assessment rating. By that method, company has assured to minimize the mistaken promotions. The costs of wrong promotions are very high. Thus, this method has help Toyota to select best talent and maintain their competitiveness. Further, succession plan is done according to the result of end year assessments. By this method, best talented employees will be identified to develop as future leaders. Also, training and development is a vital area of Toyota. The investment for training and development is huge and management is more concerned about the productivity improvement through training and development. At the assessment stage, all training and development needs are identified. These identified training needs are amalgamated to the next year training plan of the organization. Thus, all training needs are address by a very systematic way. Toyota use many ways as assessment tools. Those tools are depended on the level of management. A most commonly used method is 3600 evaluation. By this method stakeholders will comment on the performance of employees. The Toyotas performance management system is very critical to the organization. Further, it has helped organization to achieve superior profit in a highly competitive environment. Human Resources Development "Because people make our automobiles, nothing gets started until we train and educate our people." As seen in these words, which were expressed by Honorary Advisor Eiji Toyoda, Toyota seeks to develop human resources through the activity of making things. Toyota believes that the development of human resources requires the handing down of values and perspectives. In conjunction with the geographic expansion of business and the growth of business areas, undertaking global actions for the development of human resources has become a priority issue. Toyota is building both tangible (a new learning facility) and intangible (course content) structures relating to team member development that ensures a secure and steady flow of qualified human resources to conduct Toyota's global business in the 21st century.

Fully Committed and Thorough Human Resources Development Toyota conducts systematic company-wide and divisional training and assignments for training purposes with an emphasis on on-the-job training (OJT) to ensure that associates can fully utilize their abilities. Toyota has defined the required qualifications of "professional staff"1 for office and engineering positions, and "T shaped human resources"2 who are able to perform day-to-day activities and expand their skills in technical positions. Company-wide training is conducted based on employee qualifications, as well as specialized training for individual divisions, language training, and special knowledge and skill training. In October 2002, Toyota created the booklet "Toyota Developing People" and distributed it to all associates to create a common understanding that "the source of Toyota's competitiveness is human resources development" and to promote the creation of workplaces where personnel development takes place at all sites and at all levels.

Fig: Key Principles of The Toyota Way 2001

Toyota and Ford Comparative Analysis A Comparative Analysis of the HRM Policies of Toyota and Ford

The closing decades of the twentieth century and the opening years of the current millennium have been periods of rapid and widespread change in global society. Spurred by opportunities provided by advances in technology, globalisation, and rapid economic growth, major business corporations have been able to spread their activities across continents, increasing their revenues and profits substantially. For business corporations, these increased business opportunities have come along with competitive challenges from new and old companies. Competition almost everywhere has become global in scope; businesses of all types in most countries face real or potential competition from foreign products or services, or from foreign-owned subsidiaries, and domestic firms, which are now foreign-owned. In the midst of this chaos, the need for top class Human Resource Management, experts believe, has never been as critical as now. The world of automotive manufacturing, for long the bell weather of industrial production, is also in the midst of sweeping shake-ups. Included in this revolution are extraordinary reorganisations of manufacturing processes, the surfacing of breathtaking technological developments, far reaching realignments of major corporations, numerous mergers, takeovers and pacts among industry members, and the phenomenal rise of Japanese auto makers. Giants like General Motors, Ford, and Chrysler, who once dominated automobile manufacturing, are yielded their markets to much younger Japanese companies like Toyota and Honda. Toyota Motors, a Japanese car maker that commenced operations, in 1937, decades after GM and Ford established themselves, is now the biggest and most profitable car maker in the world. This report attempts to analyse the HR policies of Ford and Toyota, comparing their corporate philosophies on the issue, as well as their manifestation in HRM policies and practices at the ground level. Structured in successive sections, the report takes up the broad area of evolution of HR management and the challenges it faces in these days of internationalisation, followed by a comparative analysis of HRM at Ford and Toyota, and thereafter concludes with suggestions on the best possible approach for British expatriates who wish to work in the auto industry in Japan. Human Resource Management Human Resource management is best viewed as an inclusive term for describing a melange of distinctive approaches to people management. It has evolved from a number of different

threads of thought and is most appropriately described as a loose set of theories about people management rather than a focused methodology. Over the years it has evolved and grown with inputs, often contradictory, from psychologists, management experts, corporate managers, industrialists, and business corporations. Theories put forward by Elton Mayo, Maslow, and Herzeberger, as well as practices adopted by Henry Ford, subsequently adopted and modified by Japanese companies, have all played distinctive roles in the evolution of HR Management. HRM is often also described as a concept with soft and hard forms, which firstly are diametrically opposed along a number of dimensions, and secondly are used to categorise approaches to managing people. Whilst the soft model is associated with the Hawthorne Effect, the Human Relations Movement, and McGregors Theory Y perspective, as also with concepts of flexibility, communication, and adaptability, the hard model stresses on the quantitative and business-strategic aspects of managing employees like other factors of production, and where HRM practices are dovetailed into the strategic objectives of organisations. Even as western companies are increasingly using a mix of soft and hard concepts in constructing HRM strategies, Japanese businesses like Toyota have developed a people oriented Z theory, which places people at the centre of organisational activity and treats them as the most important organisational resource. HRM practices worldwide are being continuously shaped by fundamental changes that have occurred and are occurring in society and in the working space. Factors like diverse workforces, double income families, single parenting responsibilities, and teleworking, along with the realities of downsizing, employment-at-will agreements, and globalisation, have created challenges both for management and for organised labour. Decreased commitment between management and employees, temporary relationships, and less emphasis on employer sponsored career growth have not only fundamentally changed assumptions about careers and workforce but also led to anxieties and uncertainty. HRM practices in the UK have again been influenced by David Guests six-dimensional HRM model, which includes HRM strategy, HRM practices, HRM outcomes, behaviour outcomes, performance outcomes, and financial outcomes. Managements of major corporations realise the complexity of current HR challenges and are trying to respond appropriately to optimise workforce effectiveness.

Analysis of HRM Policies at Ford and Toyota Fordism and current HRM Practices at Ford Motors Much of the origins of Modern Human Resource Management can be traced back to developments in American industry in the early years of the 20th century, more specifically to the management and production policies initiated by Henry Ford at the Detroit factories of Ford Motors. Organising the workforce of the company on the same footing as other factors of production, Ford was instrumental in introducing the concepts of assembly lines, mass production, and the technical division of labour within companies and their production units. Fordism, as this set of personnel management practices came to be known, was identified with strong hierarchical control, extraordinarily good remuneration, (the five dollar day), and the restriction of workers to particular tasks, both skilled and unskilled. The emphasis in Fordism was on quantity, not quality, and workers were not allowed to involve themselves in any activity outside their specifically delegated functions. Fordism came to be associated with hierarchical decision making, strict functional specialisation, and tightly defined job design. With assembly line stoppages remaining unattended on purpose until the arrival of specialists, and workers knowing very little outside their specific areas of work, product quality in Fordism was allowed to be subordinated to the need to maintain and increase volumes. Ford Motors also saw the establishment of the first sociology, or employee welfare departments, in which managers tried to ensure that domestic problems were not allowed to impinge on assembly line productivity. Whilst absorption and utilisation of modern technology and design have always been associated with Fords way of functioning, the company even today typifies the production model of HR, manifested by tough and consistent practice of industrial relations and a clear focus on the continuity of production. HR policies have continued to be hierarchical and the company organisation is known to be multi layered, bureaucratic, and with comparatively low levels of delegation and working independence. Reacting to the success of Japanese manufacturing practices, Ford initiated changes in its personnel policies in the early 1980s to bring in elements of Japanese HR practice. A number of measures for increasing participation and involvement of workers in Ford UK over the following years led to significant improvement in results. Performance Management

imperatives were incorporated into the remuneration structure and problem solving groups, similar to quality circles, now flourish in the company. The companys Employee Development and Assistance Programme, which allowed for non-work, non-pay benefits for educational needs of employees also met with significant worker approval. Whilst Ford Motors is trying to make its HR policy more participative and focused on improving workforce skills and abilities, old bureaucratic practices still remain. Industry analysts assert that the company is manager heavy and that individual managers are prone to guard their own turf. It is estimated that Ford has 12 levels between the shop floor worker and the Chief Operating Officer (COO) compared to 4 for Toyota. Despite recent efforts to renew workforce participation, which resulted in thousands of suggestions, even transparently effective recommendations for improving productivity and cutting costs are difficult to introduce because of complex and time consuming procedures and the need for union acquiescence. Steady inroads made by trade unions over the years also means that all Ford workers are covered by contracts that include not just pay and benefits but also a broad range of shop floor actions. Productivity levels, once the glory of the company, is, at 37 hours per vehicle, much worse than Toyotas comparative figures of 27 hours. Strikes are not uncommon, not just at Detroit but also at Ford factories in other countries. A recent strike at Fords Russian factory led to prolonged work disruption and resulted in across the board wage increases of more than 20% before production restarted. Whilst selection and recruitment policies at Ford are extremely structured, with salaries and working conditions being governed by union agreements, adding manpower is the last thing on the managements mind right now. The management, apart from selling off its Jaguar and Land Rover brands, has initiated a process of downsizing its American workforce by 30,000 workers, a proposal that has not been met kindly by its unions, and which is likely to be the companys chief HR focus in coming months. The Toyota Phenomenon Unlike Ford and GM, Toyota has been on a roll, opening factories and recruiting workers even as its American competitors vie with each other to close factories and terminate thousands of workers. The company became the largest car manufacturer in the world in

2007; it earned profits of more than 11 billion US dollars, even as GM moved towards bankruptcy, and Ford continued to fare poorly. Whilst there is a widespread impression that Toyotas brilliance arises mainly from its revolutionary HR policies, the truth on the ground is quite different. At the centre of Toyotas functioning lies the legendary Toyota Production System (TPS); the mother of practices like Kanban, Kaizen, Jidoka, and Shojinka, familiar members of the global management lexicon. All other functions, among them marketing, purchasing, finance, and HR, derive their purpose from the demands of production (and the TPS), which is the centre of the Toyota universe. Purchasing techniques like Just-in-Time and Zero-inventory, for example, dovetail with the needs of the TPS. Similarly HRM practices work towards promoting the four goals of employee integration with the organisation; employee commitment; workforce flexibility and adaptability; and, finally, an emphasis on quality. Even though Toyota follows the widespread Japanese traditions of uniforms, common parking plots, common canteens and equal treatment of all workers, there is a clear demarcation between managers and workers. Hierarchical levels, even though they are far lesser than at Ford are clear, and responsibilities of all parties spelled out clearly. The HR formula at Toyota is simple and clear; hire the right people, pay them well, take good care of them, and develop them to work in sync with Toyotas needs. Whilst, the HR policy is easily articulated and extremely simple to understand, its ramifications are complex. The requirements for people are clearly laid down on company websites and the global size of the company has led to substantial local requirement, not just of workers, but also of managers. The company is a preferred employer; recent advertisements for 700 people for a newly opened truck manufacturing unit drew more than 40,000 applications. The company offers good salary structures and benefits include pension schemes, hospitalisation, disability and life insurance, bonuses, meal vouchers, holidays, relocation support and car rental programme. Trade Union influence at Toyota is significantly lesser than at Ford. Much of this is due to the greater stability of the Trade Unions in Japan than in the US and the UK, as also to their consolidation in recent years into the Rengo; the remuneration structure, which is based on seniority and not directly related to job type also helps in facilitating mobility within the organisation, as well as retraining and redeployment and transfers, thus making layoffs unnecessary. Union problems are however not completely

absent. The Toyota plant in India was shut for 14 days in 2006 because of labour violence over union demands for reinstatement of a few dismissed employees. Toyota has extensive international operations, which makes it necessary for its management to adapt to a range of cultural, economic, and political situations. Whilst shop floor employees are by and large chosen from local people, managerial employees are more international in their constitution, especially in western countries. There are significant numbers of American and British managers in Toyota facilities in the US and UK, some of whom are also sent for long periods to Japan to contribute towards the companys international strategy. The most significant features of Toyota HRM practices however lie in the compan ys employee training and development policies, which the company has maintained with single minded purpose, even as it has expanded into a vast international group, employing 200,000 workers at 27 overseas locations. It is this belief in employee empowerment that forms the core of Toyotas quality control processes, evidenced famously by the authority of shop floor employees to stop factory lines when they spot defects. Staff development processes are based upon systemically involving employees in details of production processes, encouraging work rotation, calling for suggestions, facilitating the development of a thoughtful approach, and pushing for the inculcation of Kaizen, the philosophy of continuous improvement in working and personal life. This continuous aim to improve in a myriad ways, in every department, process and activity, as a systemic and ingrained approach is closely related to the environment of learning that pervades the organisation. Matthew May, in an article in the Wharton Leadership Digest makes a similar point from a different perspective. At Toyota, he emphasizes, the company has a singular, differentiating organizational talent, (Its) Learnership Learnership at Toyota is not separate from the work; it is the work. By continuously experimenting with how to perform your tasks better, or more creatively or more efficiently, you constantly raise the bar, turning ideas into action action that creates meaningful change. And thats what leaders do.

Operation Management and Performance Operations management is the maintenance of the production of goods or services that a company is developing for sale. The management team is charged with the task of ensuring a profitable and safe production system, and also ensuring that resources are allocated and used in an efficient manner, minimizing waste in labour and material resources. In order to meet these goals, the management team thus has to attempt to find the best operations strategy available for their particular situation and product. The biggest challenge for any organization and its operations is to try to maximize productions by cutting down on waste, Finding the right balance between getting the production up to the required standard by using the resources available to the optimal level. There are many strategies that can be used by an operations manager depending on the needs of production, and in the first section we will examine some existing operation management strategies, and in the second section we will examine the effectiveness of these strategies, and how well they fit in with the goals of the target organization, Toyota.

Operations Managers Role The Role of an operations manager is of utmost importance as any operations manager who can effectively utilize an organizations resources to efficient effect by producing outputs of a standard & sustainable quality, contributes to the organizations targets in maximizing profits by reducing costs.

Operations management focuses on carefully managing the processes to produce and distribute products and services. Usually, small businesses don't talk about "operations management", but they carry out the activities that management schools typically associate with the phrase "operations management." Major, overall activities often include product creation, development, production and distribution. (These activities are also associated with Product and Service Management. However product management is usually in regard to one or more closely related product -- that is, a product line. Operations management is in regard to all operations within the organization.) Related activities include managing purchases, inventory control, quality control, storage, logistics and evaluations. A great deal of focus is

on efficiency and effectiveness of processes. Therefore, operations management often includes substantial measurement and analysis of internal processes. Ultimately, the nature of how operations management is carried out in an organization depends very much on the nature of products or services in the organization, for example, retail, manufacturing, wholesale, etc. A successful operations manager can contribute to the organizations success, by being smart on how they utilize the organizations resources, managing the inputs into outputs and thinking outside the box by focusing on the specifics of the operations and process keeping in line with the mechanics of the set up provided by the organization. Operations Management Lean Manufacturing Toyota is no stranger to operations management, and is responsible for coming up with the lean manufacturing strategy, sometimes known as Toyotaism. Essentially this strategy deals with the elimination of superfluous resources, particularly those which do not pertain to the value of the end product. Lean manufacturing also involves only employing resources towards services, products or features that the customer wants, thereby giving the customer the largest value with the lowest amount of resources. It is important when employing this operations management technique to first identify those areas which waste of resources is occurring, either because of work that is non-value adding, or simply wasteful and can be eliminated. One such example of lean manufacturing is the cycle-time variation technique, which saves on the time it takes to produce output units on a production line. Six Sigma Though Toyota is strong in employing the strategy of lean manufacturing to their operations, there are several other strategies that can be employed in order to benefit the organization. For instance, the six sigma approach to operations management, which was initially developed by Motorola, is another approach, though perhaps more controversial. By removing errors and limiting the variability in manufacturing, the six sigma process ensures that there is a very low level of defect in the output product, and improves the quality of the outputs. The six sigma approach also relies on the specialization of different aspects of the six

sigma approach, and this system works on a hierarchy of people. At the top of this hierarchical chain are the executive leadership who serve to set out the vision for implementation of the six sigma, and then below them various levels of personnel who are in charge of broad implementation, specific projects, statistical projects, coordination and mentoring.

Kaizen Another Japanese-born method of operations management is the principle of Kaizen, which focuses on incremental but continuous improvement. This approach is closely linked to the lean manufacturing approach in the sense that it also focuses on reducing wasted resources that do not add value to the end product, but in addition to this it also seeks to continually improve all areas of operations. This idea of continual improvement is carried out on a dayto-day basis, and serves to humanize the workplace by eliminating unnecessary hard work and thus encouraging all employees to participate in the improvement of the organization. Another important feature of Kaizen is to focus on carrying out small experiments and measuring their results rather than implementing large sweeping changes, as small changes can be judged and quickly adapted accordingly. Kaizen also involves an emphasis on selfdiscipline, teamwork, improved morale and suggestions for improvement from all levels of the organization. Theory of Constraints The theory of constraints is an operations management technique that suggests that typically there are small constraints that limit an organizations ability to achieve their desired goal, and as such the organization ought to identify these constraints and restructure their operations in order to address these constraints and thereby minimize them. These constraints can be internal to the company (equipment, policy, employees) as well as external. This strategy relies on the premise that there are only at most a few constraints limiting productivity and output, and that the most crucial step is to focus resources into minimizing the constraint, which will produce the maximum improvement in the overall organization. This strategy is employed by first recognizing and addressing the largest constraint, and then focusing on other constraints in turn.

Hoshin Kanri The Hoshin Kanri model of operations management focuses on policy deployment, particularly by deploying policy at all levels of the organization, each level having its own targets and goals that are part of the larger goal of the organization. The main effort is centered around a goal, and then leaders are organized and positioned to each work on a part of achieving that goal, for which they will be accountable for. In this strategy, the focus is more on the overall goal rather than specific daily goals or short-term goals. The important emphasis is on every level having its own specific piece to contribute towards the goal, and each part being held responsible for the attainment of the goal laid out for them by the initial policy.

Recommendations There are a number of recommendations that can be made to Toyota to improve their operations management strategies and techniques. Toyota already uses the lean manufacturing method of operations management in their production of vehicles and as mentioned above, it can be said that the method is the Toyota method - it was pioneered and developed by this company and the company evidently still employ the method of continual improvement and efficiency in their operations dealings and waste management. However, it will be recommended here that to achieve the best possible operations management strategy, the lean manufacturing technique must be employed in conjunction with other techniques so as to establish the best possible operational efficiency and waste management. The first recommendation is to do with the six sigma technique. This technique is often criticised but it can offer a suitable improvement to the operations management techniques of Toyota. It has been remarked that the six sigma technique is based on arbitrary standards of success - this is because the standard of success is always set at a standard deviation of 6 on the normal distribution of a production curve - and it is difficult to see how such an arbitrary number can offer anything of importance to widely different products and services that require greater or lesser amounts of quality control. However, though this criticism may make sense for something which requires a very high degree of quality control in which a standard deviation of 6 is highly irresponsible, such as military equipment, there is no need to apply this criticism to the motor vehicle industry where the six sigma system will work perfectly

well and increase the quality of Toyota's product measurably. The six sigma system can be used alongside the lean manufacturing technique so that quality control and waste management can be suitably and efficiently controlled with the same process and management team. This will not only save on waste and improve quality but will ensure that the operations management team itself is running things smoothly from one optimal vantage point. The next recommendation is in regards with Kaizen. This technique is very general and can be applied along with any other techniques that a company may already be using such as the lean manufacturing already being used by the company under scrutiny, Toyota. The reason for recommending Kaizen along with the current lean manufacturing and the other recommended technique of six sigma is because Kaizen is seen as a great motivational tool. Kaizen, as well as seeking to continually improve efficiency just like the lean manufacturing technique also employs a continual appraisal system that all of the workforce is encouraged to participate in and not only the operations management team. This is an incredibly successful motivational tool as it is quite obvious that a workforce that feel their voices are being heard and they have a tangible stake in the final product will work harder and far more efficiently to the betterment of the overall operations performance of the company. Toyota, and any company in fact, would be well advised to employ such a method of operations management that not only improves efficiency vastly but also raises the esteem of the production team as well. Conclusion In conclusion, it would be fair to say that Toyota already employs a very efficient and thorough operations management strategy and that to their credit they developed it themselves. However, lean manufacturing, in its very ideology asks for infinite continual never ending improvement, and the alliance of the lean manufacturing technique with the six sigma technique and the kaizen method represents that continual striving for improvement. These additional operation management techniques will add greatly to the performance of the company by giving the company a tangible quality control system, a highly motivated workforce and a decades old and highly refined waste management system. The amalgamation of these techniques will offer Toyota the best way forward in the global vehicle industry as one of the major players in the field and wll allow Toyota to be at the forefront of quality innovation in the operations field - the recommendations made in this

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