An efficient business organization has to develop and adopt theoretical framework models of operation that would yield maximum benefit to the organization. Operation management system as employed in running of businesses calls for good understanding of the operation processes so that customer satisfaction and business obligations of an organization are both guaranteed. According to Deokjai and Ata (2008), “fault management, topological management, community and virtual group management are among some of the strategies that can be used to adjust to current market needs to ensure business goals are achieved”.
Competition has gone global and the market and industry dynamics have necessitated the need for companies to make concerted efforts streamlined towards ensuring that high quality goods and services are offered in the market at competitive prices. This has resulted in the adoption and implementation of several tools and strategies geared towards the aforementioned goals attainment. One of the strategies that have been soundly embraced by a multitude of companies is the operations management that has lead to a paradigm shift towards lean principles.
Operation management is a field of business studies that involve the creation of goods and services in a responsive way that will ensure that the business processes are efficient in regard to the use of available resources. The operation management system must also ensure that the needs of clients are fully satisfied. An effective operation system will ensure the management lays a formidable ground that would ensure inputs in terms of labor, material, and energy result to output production in terms of goods and services.
Conventionally, operations management refers to the creation of goods and services in two perspectives. It is mainly concerned with the aspect of value addition for an organization’s program in a given line of goods/services provision. In essence, value addition should be mainly guided by market availability and ability of an organization to provide optimum service/good delivery through implementation of top business processes performance.
Operations management is that field of business that deals with the directing and managing of both technical and physical responsibilities of an organization; mainly geared towards the development of airline services. In a narrower classification, operations management is responsible for instituting general working principles, defining all the production/manufacturing processes, sustaining equipment management, controlling production levels, coordinating the factors of production, systems analysis among other responsibilities. All these must be well coordinated and monitored to ensure flow of operations of an organization. The role and importance of operations management in the context of an organization is therefore to produce goods and services in a competitive environment. This will help yield a seamless transition from the corporate strategy and activities undertaken in order that the strategic intents are attained.
Toyota Motor Corporation is the largest world automaker. Toyoda Kiichiro established Toyota Motor Corporation in 1933 in Tokyo, Japan.
Theoretical Framework Models
To jump start the analysis of theoretical models used for instituting operation system of a business organization is the linear model. Pollock &Leys (2006), assert that “according to this model, researchers need to present their findings in a convincing manner when policy decisions are being made, and if they are convincing enough their findings will be taken into account, and will from then on be incorporated into policy.” This policy procedure is a step-by-step action plan that originates from reform issue to be instituted and ensures a full implementation. The intermediary stages that linear model undergoes involve agenda phase and decision phase. At the agenda phase, the issue is looked into in terms of relevance after which decision is made for or against a certain reform issue. Finally, at the implementation stage, the reform issue is either categorized as successfully implemented or unsuccessfully implemented. If it is unsuccessful, there is need to verify either the institutional strengths or fortify political will that may have led to its failure.
Secondly, there is the theoretical model known as translation of technology under which an organization finds solution to current problems in the community by employing the use of Information and Communication Technology (ICT). IT has provided an avenue for creation of new products some of which can be sold online for efficiency, convenience and responsiveness. With the introduction of IT solutions, management hierarchy has duty to develop new policies that would ensure the adoption of ICT processes. Though not all of the IT solutions will be implemented in their natural state, there would be a need to translate their context of application to another form to cater for the needs of a new concept. The success of this theoretical model relies on understanding between two parties in communication and time and effort have to be dedicated towards achieving this feat (Cater-Steel, 2008).
Thirdly, there is the tipping point model that is based on how understanding is derived from a given occurrence or acceleration of a trend and to consider such occurrences and trends as social epidemics. In this model, ideas and products spread very fast and due to exposure or sharing of information. A social epidemic can result from small issues or due to dramatic fall or rise of demand of a given product at a given time. “That moment, ‘when everything can change all at once’, he calls ‘the tipping point’,” (Pollock &Leys, 2006). The proponents of this model argue that small adjustments in information can make a significant change in market situation.
Lastly, Kuhn coined the model known as crisis or paradigm shift model whose scientific ideas are only incorporated following failure of conventional scientific ideals (when there is crisis). When there are a number of unresolved issues in the community, a number of suggested ideas are looked into in search of new answers. The proponents of new ideas hold the opinion that the conventional methods do no longer hold substance in resolving current challenges; hence, Kuhn sees a paradigm shift in operation management as the way to resolving a crisis. All these assumptions hold for perfect operating markets and where the risk free rate, Toyota’s company beta and cost of debt follow financial market fluctuations. According to Armstrong (2007), “the Optimal (target) Capital Structure is the Debt-to-Equity ratio of the firm which results in the lowest possible WACC (weighted average cost of capital)” The surveys of the optimal capital structure all seem to step from the Modigliani and Miller (1958) assertions that “financing doesn’t matter in the case of perfect capital markets in that according to his model, the market values of the firms’ debt and equity, D and E should add up to the total firms value given that V is a constant”.
Ethics is defined as that “discipline that deals with what is good and bad and with moral duty and obligation” (Taub, 12).The reason behind the need for an organization to maintain good behavior amongst its employees in not hard to discern. This is because business ethics concerns the corporate social responsibility. According to Sims (11), “the best interest of the organizations is to encourage good moral standards within the organization and not to tolerate bad moral standards”. The business today is faced by a number of challenges that impacts on the ethical culture and behavior of an organization. Factors that have significantly contributed to the influencing and impacting on the ethical behavior of a business include adoption of new technologies within the workplace, stiff competition brought about by advances in technology, existence of a diverse work force and strives for quality and excellence in business operations. “These challenges determine those who will either sink or swim during challenging times” (Sims, 1992). Issues that relate to the moral behavior within the workplace have been an awkward topic to discuss. While a number of laws have been set to ensure ethical behaviors in workplace such as deterrent of corrupt practices, such unethical behaviors continue to occur in the workplace.
Organizations have a significant role in influencing ethical behavior amongst employees when the right tools are used. First, most organizations influence ethical behavior through the provisions of rewards to prevent and deter unethical conduct. This involves rewards to employees who portray high levels of ethical behavior within a given period in time. In addition to above, organizations can take very active roles in the training of employees on ethical standards. This is to enhance and solidify the relationships between the management and the employees. “Self- discipline and ethical training programs provide the foundation for making difficult decisions in ethical relationships” (Kinicki and Kreitner, 57). The underlying fact is that organizations are expected to stress the expected ethical behavior for it to be enforced. While it remains a challenge for organizations to maintain a desirable level of ethical behavior, measures must be instituted to ensure that employees behave in ethical manners. The critical roles of modifications and appraisal systems if strategically applied within the organization’s management in influencing employee behavior cannot be undermined
Furthermore, sound management practices have the ability to impact on the ethical behavior of employees. An organization whose foundation is built on a strong culture that addresses ethical behavior significantly impacts on the employee ethical behavior. Sims (16) illustrates that
The challenges are to gain a clarification of the issue, gather the relevant facts, list your options, test each option by asking; is it legal? Is it right? , and finally, is it beneficial. The final challenges are to make a decision, double check your decisions making for example ask; how would I feel if my decision was printed in the newspaper?
The application of such steps in analyzing management decisions has a positive impact in influencing the ethical behavior of employees.
In conclusion, ethics play fundamental roles in understanding whether an organization will successfully survive in the current business environment characterized by stiff competition and overzealous media. The management thus plays a critical function in ensuring that ethical standards are being upheld within an organization. The whole process of achieving high standards of ethical behavior demands the input of everyone within an organization. Education and training thus remain the core indicators by which an organization can measure the levels of ethical behavior.
lean standardization would help companies get the chance to evaluate their status in their lean endeavors. This is because the availability of standards provides some measure with which companies can gauge their performance and extend this to comparisons with the better performing companies in the industry. As stated by Irit and Michael (2008), some companies tend to relax in their lean initiatives once they are implemented and in place forgetting that this is an ongoing process. Having objectives as streamlined in standards would help such companies continually assess themselves and hence help them remain focused. And as cited by Tamer (2008), companies can also use standardization as a tool to evaluate and improve their suppliers. Since suppliers’ success and reliability is a key factor for a company’s performance, many companies use some tools to audit and evaluate their suppliers. This is especially true for just in time implementation, where supplier’s lean principle implementation level is very important (Tamer, 2008).
Another benefit of standardization is that it would help companies to continually improve on their operations so that they remain in tandem with the lean initiatives. One of the problems that have been discussed extensively in the journal articles reviewed is the tendency for companies to fall back to their ‘old ways’ once slight problems are encountered while implementing lean practices. As has been cited by EPA (2000), starting the lean initiatives can be very easy but sustaining this is usually difficult in many companies. Having lean standards may help companies sustain their lean level. Since there will be audits and a re-certification process, companies would have to keep their lean level in order to stay certified. Companies will constantly have to monitor their lean implementations and continuous improvement level by using lean standards. It can be suggested that an efficient and well planned audit and re-certification system may increase the discipline and commitment about lean, and companies may have a better chance to keep lean alive (Tamer, 2008).
Standardization also has the benefit of developing new believes in management that can help support other management certification programs. This can help a company adopt several initiatives together that can propel it further ahead. This is because lean standards usually are applicable with other widely recommended standards and when adopted together have been found to be beneficial. As can be ascertained from literature adoption of several initiatives together helps create some synergy desirable for improved efficiency
There are several authors however who view standardization with a degree of disdain. The proponents for this school of thought argue that in fact, this standardization may create some barriers towards improved efficiency in operations. While they don’t directly castigate the initiatives, they argue that what actually drives efficiency is the motive behind the management standards. For example, Gotzamani and Tsiotras (2002) indicate that many companies seek certification mainly for advertising purposes or are forced to by their customers. But the authors also state that these types of companies will fail in their implementations since they focus only on short term advantages without understanding the real idea behind standardization.
One of the disadvantages of standardization has been cited is the question of the effectiveness of standardization. According to several authors, the mere fact that a company or individual has a certification does not necessarily point to efficiency. The results of audits in themselves point at conformity, not measuring the actual efficiency in operations. A major issue cited here is with cultural aspect of organizations that may not change with mere certification. The need to cultivate a culture that embraces lean has been greatly emphasized. As cited by Tamer (2008) ‘Lean is a culture and you can not certify the culture or mental values. Certification is a tool that helps eliminate some problems in implementing lean principles on the factory floor. This is a very small portion of the problem for implementing lean’ (p. 56-61)
The final disadvantage cited is with the huge paper work that standardization creates and related non value additions. This usually comes in the forms of procedures, instructions and audits. The proponents argue that such activities are bothersome, involves time, hiring of extra personnel and adds costs that can be otherwise avoided.
As can be seen, there are several disadvantages that may stem from standardization and certification. Ultimately though in the author’s opinion, the benefits outweigh the disadvantages. This was supported by a majority of the authors reviewed.
Usually there will be a body that guides the standardization and certification program for the given industry, for example the ISO 9000 develops, maintains and publishes the given set of standards applicable in a given field. The body will work with the representatives from large corporations, consultants, government agencies and academic personnel in consultations so that shared wisdom is gained for the formulation of efficient standards to be applied. The standards developed should ideally have a global appeal. The development will start with a shared believe for the need of the standard. This will mainly be raised by the chief players in the given industry. Once a need is ascertained, a team is formulated who addresses the scope of the problem and comes up with a draft proposal. This is further discussed and amendments carried out before the final document is developed and published. Periodic revisions are usually then carried out with time. It is important to note that the companies who initiated the process for standardization do not necessary have to seek certification. This is optional, but due to market standards and requirements it makes good economic sense to seek certification.
The auditing and assessments for conformity within Toyota will in most cases be carried out by a different body charged with that responsibility. The main purpose is to ensure that companies are abiding by the set standards as spelt out in the standardization requirements. These audit and assessments are carried out in time intervals of 6 months, 1 year or 2 year intervals depending on the industry and/or specified standards requirements. A clean bill of health in form of a report will be issued upon conviction for conformity, but upon discovery of issues pointing to the converse, the points desirable for change will be highlighted and the company expected to change accordingly, failure to which certification is withdrawn. The companies are usually expected to renew their certification in intervals of between 2-5 years.
Certification for individuals on the other hand will be carried out by professional associations who are responsible for designing the certification programs and determining the requirements. These organizations will usually offer training and then test the individuals for skills; knowledge, attributes etc and offer a certificate upon prove of qualification, mainly in the form of an examination. Similarly, regular reviews of the individual certification programs will be carried out.
This chapter is concluded by offering the following opinions based on the study on certification and standardization in lean manufacturing;
The most recent evolution of lean is towards a lean value system. This lean value system encompasses a value-adding network of operations across companies, with the goal of providing a series of contingent value proposition to individual final consumers. in this new system, the focus is on close integration of strategy formation with operational improvement and keen focus on a range of contingent processes away from Lean thinking traditional focus on order fulfillment activities is a
Majority of companies are still struggling with the implementation of lean practices in their operations with only few cases cited from literature on the companies that have successfully implemented lean. The failure to apply standardized principles and processes has been cited as one of the bottlenecks contributing to the above
There are several benefits to be realized by companies in the industry from standardization of operations and having gained certification. While the desire is there, few companies have sought the same. Limited literature on the topic of lean standardization and certification and the benefits to be realized is availed that could have acted as a motivator to these companies and industrial players.
It can be observed that there are several positive benefits to be realized by standardization of lean manufacturing in the automotive industry and companies and individuals getting certification. Towards better realization of these benefits, the following recommendations are made
The major failure for the adoption of standards and certification by companies in automotive manufacturing has been attributed to the low promotion campaign by the SAE. A stronger promotional campaign is advocated for
Few studies touching on this area were ascertained. More studies on the benefits of lean standardization and certification should therefore be carried out. The managers, industrial players and policy makers in the industry can gain a lot by borrowing from findings generated
More programs on lean certification for individuals should be developed to help generate employees who are experienced and technologically literate, globally astute and operationally agile and who can help drive lean.