In the world of business, companies need to choose appropriate plans to become successful in the market. Some of such strategies are connected with customer-oriented initiatives and waste elimination practices. Toyota is the company that first introduced the lean enterprise model and Toyota Production System, and it has already proven to be successful in its business sector due to the effectiveness of these approaches. Therefore, in this assignment, Toyota’s performance will be considered a standard; another company, Nokia, will be comprehensively analyzed and compared to Toyota to determine the areas of improvement and possible business solutions.
First of all, it is important to describe the lean enterprise and Toyota Production System in brief to define the main criteria for benchmarking. The lean enterprise model is a system that focuses on customer and employee satisfaction. The main principles of the model include value streams organization, responding to customers’ demands, focusing on customer value, creating appropriate work conditions for the employees, and always finding areas for improvement (McVay et al. 5). With the use of different tools, such as standardization of work, Toyota demonstrates successful performance and continuous improvement.
Toyota Production System (TPS) are methods invented by the company and focus on the absolute elimination of waste. In terms of TPS, the values of the company are to plan and control production, and also to inspect if the execution of the company’s plan is effective enough to satisfy customers (Shingo 67). The main principles of these solutions are to understand the role of overproduction, follow the production schedule, separate machines, and human workers, determine low utilization rates and be able to detect and eliminate problems (Shingo 68). Therefore, Toyota’s main objectives are to satisfy customers and minimize waste.
The benchmarking will begin with the comparison of the two companies’ management styles. According to Hibino et al., Toyota “views employees as an asset and not as a cost” (78). It does not separate workers by their merits, but instead, emphasizes their capabilities and relationships networks. As for Nokia, its management system has changed from “mechanistic” to more calculation-oriented and focused on internal efficiency (Tuomo 170). It makes the company’s management different from Toyota’s, where more attention is given to employees.
The values of Toyota have already been mentioned: its most important goals are to satisfy its customers and eliminate waste. In contrast, the main objective of Nokia is to raise its competitiveness and “create a profit for its owners” (Montessori et al. 132). Moreover, while Toyota pays a lot of attention to appropriate conditions of its employees, Nokia may sacrifice personnel’s interests. For example, the company had to conduct significant downsizing to save its market positions during the crisis (Lynch 498), which shows that the objectives of the two companies are different.
Customer-oriented value and client satisfaction are also important criteria to benchmark, as they can seriously affect the prestige of a company. According to Toyota’s principles, customers define the value of products and services by themselves; their needs are also considered and are the basis of the company’s production. The example of Nokia shows that customer satisfaction can be an area to improve: in 2010, the company faced a “doomsday” (Lynch 498). It was not able to reach the high-performance level of its competitors, and therefore, lost its status as a successful mobile phone producer.
The example of Nokia shows that, unlike Toyota, it is not able to effectively identify the problems and shut down the production process to avoid further decline. Shingo called it “performing an appendectomy” (74); in the case of Nokia, it would mean taking immediate actions during its production decrease in the 2010s (Lynch 499). Starting from 2006, the company had experienced negative market changes; however, improvements were only implemented after 2010, when Stephen Elop joined the company (Lynch 498). As a result, the changes were not as successful as expected, and the company lost its position in the market.
Despite its production difficulties, Nokia is considered successful in minimizing waste through recycling and utilization practices: the company took measures to raise environmental consciousness among its employees and customers. In 2008, it introduced e-waste management in India, installed drop boxes to collect mobile phones and other items for recycling, and suggested other similar solutions (Karol and Mashood 273). It is possible to conclude that in terms of utilization and recycling measures, the company follows Toyota’s standards.
All things considered, it would be fair to mention that Nokia had a complicated business history with crests and troughs, and the company’s leaders sometimes had to make crucial decisions to maintain the prestige of the corporation.
Even though such changes led to a high level of employee dissatisfaction, they managed to stabilize the situation. Nevertheless, it would be better for a company to conduct more effective market research to evaluate the demands of its customers and the overall market situation. Moreover, Nokia probably requires better production control and forecasting. As the modern world and the customers’ demands change all the time, it is important to do proper planning to meet customers’ expectations.
At the same time, the company can be called successful in terms of waste minimization, for example, through effective utilization practices. Therefore, it follows the TPS principles effectively, though it needs to pay more attention to the production process standardization and control. To sum up, benchmarking can be an effective way to evaluate the overall production performance of a particular company. Comparing the characteristics of Nokia to Toyota’s standards allowed us to identify the vulnerabilities that need to be improved. For any company, it is impossible to demonstrate effectiveness all the time; however, timely evaluation and consequent changes can influence corporations’ prestige and performance.
Works Cited
Hibino, Shozo, et al. Toyota’s Global Marketing Strategy: Innovation through Breakthrough Thinking and Kaizen. Taylor & Francis, 2017.
Karol, Anjali and C. Mashood. “Eco Awareness: Imbibing Environmental Values in Consumers.” Green Consumerism: Perspectives, Sustainability, and Behavior, edited by Ruchika Singh Malyan and Punita Duhan, CRC Press, 2018, pp. 292-315.
Lynch, Richard. Strategic Management. Pearson, 2018.
McVay, Gloria, et al. Accounting in the Lean Enterprise: Providing Simple, Practical, and Decision-Relevant Information. CRC Press, 2017.
Montessori, Nicolina Montesano, et al., editors. Critical Policy Discourse Analysis. Edward Elgar Publishing, 2019.
Peltonen, Tuomo. Towards Wise Management: Wisdom and Stupidity in Strategic Decision-making. Springer, 2018.
Shingo, Shigeo. A Study of the Toyota Production System: From an Industrial Engineering Viewpoint. Translated by Andrew P. Dillon, Routledge, 2019.