In today energetic market, change management has turned into a very vital aspect of the organisation development. Change doesn't not always imply technology, thus, change is defined as a part of organisation invariably affect people and procedure for the company (Cole, 2008).
The pace of global, monetary and technical development makes change an inescapable feature of organisational life. Change can be classified into planned change and unplanned change. Unplanned change is a piecemeal a reaction to circumstances as they appear. Whereas, prepared change is change that was created and implemented in an orderly and timely fashion in expectation of future situations (Hayes, 2002). For example, the execution of Just-In-Time (JIT) operation in the Toyota Creation System (TPS) is recognized as a planned change. For the reason that the adaption of JIT is fully gone through a planned and well-managed change process.
Change is essential to strategy and eye-sight generation when organisation is finding your way through the strategic planning process (Burnes, 2004). Change is an alternation of organisation's environment composition, technology or people. Organisation often view change as a continuous process that they have to capture the learning and move it on.
The causes of change can be divided into internal and exterior forces. External causes include economic factors, and new market opportunity. In comparison, the internal causes inside an organisation can lead to a change (Griffin, 2003). Company need to plainly clarify the factors, which have induced the changes. From then on, a big change management strategy should be carried out, which comprises of change management process, approaches implemented to minimise the resistance to change and a standard performance analysis program of the change.
History of Toyota
Toyota Manufacturing Organization (TMC) story starts off, when Sakichi created the wooden Toyoda handloom, which was to revolutionize the country's textile industry. Toyoda Automatic Loom Works, which is now known as Toyota Processing Firm (TMC), was founded in 1918 by Sakichi Toyoda and Kiichiro Toyoda. Kiichiro Toyoda got travelled to European countries and the united states in 1929 to research automobile development and started researching gasoline run engines in 1930. The 1st A1 prototype passenger car was completed in year 1935 (http: //www. toyota. co. uk).
Toyota started its operation in Europe since the early 1960s. They attempted to design the car based on Europe market needs and wishes. Further, Toyota acquired established a manufacturing facility operation in UK in season 1989 because of the strong custom of vehicle making in UK and the top domestic market for his or her product (http://www. toyotauk. com). In calendar year 2004, Toyota is just about the one of the top three car company, alongside General Motor unit (GM) and Ford. Globalisation has pressured Toyota to improve their business process to be more competitive in the global market. Toyota has established a clear eye-sight - '2010 Global Eyesight Strategy'.
The quest of Toyota is to create a more prosperous population through automatic developing. Therefore, Toyota has to always focus on the continuing future of the auto industry when deciding the position of the business. The perspective of Toyota aims to achieve long-term, stable growth in harmony with the environment, the global current economic climate, the local communities it serves and its own stakesholder (http://www. toyota. co. jp).
Forces for Change
The exterior and internal pushes have led to the need of change. The exterior sets off for change are derived from outside the company.
The external sets off for change in Toyota:
Globalisation - The declination of obstacles to the free flow of products and services possessed driven the style of globalisation. Globalisation has opened up new market and created chance of business to expand their market show (http://news. bbc. co. uk).
Increased Competition - The increased your competition in the market has required companies to improve their business operation to become more competitive on the market. For instance, as a global player - Toyota, frequently confront one another as opponents in land after country. Ford, for instance, has 5 car-design centres dispersed throughout the world, each concentrate on specific market segment (Terpstra and Sarathy, 2000). As a result, change might occur. In this project, case regarding to the impact of change on TPS had changed the business insurance policy, process, and decision making.
Tough rivalry - There are many aggressive opponents, such as Nissan, GM, Ford etc. Many of them have established their own competitive advantages in the global market, thus, this may constraints Toyota to gain more market talk about in the global market (Hill and Jones, 1998). Thus, there a need of change for Toyota to make their competitive advantages.
Low Demand - The demand of consumers is low so Toyota needed to come out low level of the latest models of using assembly collection instead of helping the dedicated assembly lines for one vehicle. Finally, Ohno developed the TPS, by adapting the Ford creation system to improve the efficiency and efficiency of creation lines. This notion was derived from the visit to Ford stock and made to achieve three main aims: costs decrease, quality improvement and zero inventory (Lynch 2006).
The internal sets off for a change in Toyota:
The release of JIT - The brand new management idea - Just-in-time system had been applied by Ford companies in 1910. They established all the components of a developing system - people, machines, tooling, and products in a continuing system for processing the Model T cars - made to make huge levels of limited number of models (Lynch, 2006). Because of this, Ford became the major car company in Japan with GM as the next largest manufacturer, collectively processing over 90% of the vehicles manufactured in Japan.
New product innovation - There is a need of new product development because the increased petrol price has influenced the consumer buying behaviours. Therefore, there's a dependence on Toyota to develop fuel-efficient vehicles and cross vehicles (Lynch, 2004).
Management and Marketing - The indegent management of Toyota in India has led to a lockout in India seed. The slipping demand of car in Philippines has resulted in the Toyota place close down due to poor marketing experience to help the Toyota to increase their product recognition (http://news. bbc. co. uk).
Operation problem - Predicated on the mass development paradigm of your day, economies of range alone must have made this an impossible for the small Toyota. The brand new breakthrough of the technology that employed by Ford in creation series became a threat for Toyota's position in the market. The only way that it could survive was by finding new and flexible production methods that could help them to create more value on car developing process (Lynch, 2006).
Production Lines - You'll find so many problems with Toyota (without needing the technology in its TPS) (Turban, 2008):
Problem in its source chain and its operations, and its 'car keeping' costs mounted.
Customer dissatisfaction increased credited to Toyota incapability to deliver vehicles to dealers on time.
Management used computer that produced useless studies and data. Thus, management confronted the challenge in using the info strategically.
Internal department often failed in record posting and information exchange. Thus, it got slow down the swiftness of reporting.
Report system which used in TPS always provides inaccurate information and information overlaps.
Management failed to make decision in confirmed time because of the inaccurate information.
Types of Change
Change is the changeover from one talk about to another. A couple of three types of changes which might embark on by the organisation to response to the change in exterior and internal environment:
Incremental Change - Relating to Hayes (2002), incremental change is a continuous adaption and adjustment of company existing tactical, process, regulations and system. It really is risk for an organisation adapts incremental change if the external makes of change are excellent because the ability of company development and extension may be constrained by the existing systems and functions.
Strategic Change - Strategic change is the proactive management of change in organisation to achieve proper objectives, that involves establish new systems, procedures or methods (Lynch, 2003).
Transformational Change - Transformational change may entail both proper and incremental change because the intervention contributes to alignment on the list of organisation's strategies, design element, and culture (Johnson and Scholes, 1999).
The ground-breaking of Toyota is known as transformational change. The transformational change of Toyota occurs in response to exterior and interior disruptions, which consist of tough rivalry, inside company dynamics etc. There disruption significantly jolt company and drive them to improve business strategy, and subsequently, their mission, ideals, structure, systems, and strategies (Cummings and Worley, 2001):
Transformational change includes altering most of the featuring of the company and attaining a fit among them and with the firm's strategy. Today, the demand of better quality has been on the increase for the past two decades or even more. Toyota has change process in development, business operation and retail system. The culture of Toyota has improved as they try to develop a trim organisation. Previously, the culture of Toyota is problems of creation are corrected later and quality of controlled by additional inspection and containment. Now, they build a culture that puts a stop to to fix problems with the core school of thought of eliminating waste materials (Liker and Meier, 2006).
Transformational change happens in situation experiencing huge change and doubt, thus, changing never completed as new buildings and process will constantly have to be altered to fit the changing condition. The adaption of JIT approach in TPS enable Toyota to create different types of cars in one production series, thus, it has increase the ability to Toyota in response to the various types of customer tastes (Hino, 2006).
Transformational change requires technology and continuous learning. Toyota is recognized as a learning organisation because their culture is stopping the problem and fixing the challenge in those days. This typically is a continuing learning process and seeking new behaviours, examining their repercussions, and modifying them. Learning occurs at all degrees of the company from top level management to low level management (Liker and Meier, 2006).
Change Management Of Toyota
Change is a crucial part to be supervised when Toyota's globalization got started out - exporting the Crown to america. Thus, a well-organised change management process (Appendix 1: Change Management Process, p 20) must be carried out to avoid the problem of inefficiency works because of the lack of focus on specific aspect (http://blogs. iht. com). Matching to Hayes (2002), there are several steps mixed up in process of change management:
1. Acknowledgement: Organisation has to be clearly aware of the external and inner factors (Refer to force for change above) that lead to a need of change take place within the organisation.
In 12 months 1940, Ohno Taiichi, main executive of Toyota found that it is difficult for very small Toyota to compete with Ford and Standard Motors (GM) (the planet largest car developing company) in a worldwide market. The only way that it might survive was by looking for new and versatile production method that may help them to establish their position in the global market (Lynch, 2006). Besides that, the demand of better quality of the market has indicated the challenge of traditional TPS - targets reducing per product costs creates a mind-set of never preventing the lines because higher production number theoretically equal less expensive per unit (Refer to the internal and exterior factors, which induce the need of change).
2. Start of Change Process: In this particular stage, it includes the translating the necessity for become an aspiration of change among the people, deciding who will control the change and building a workable and effective change romantic relationship.
In order to begin the change process, Ohno acquired visited the Ford stock as a result of idea that Ford stock provides him ways to alter the TPS. However, Ohno found that the Ford production was flawed. In response, he searched for ways to make mass production efficiency with small creation volumes and at most affordable costs - Just-In-Time (JIT) procedure (Stevenson, 2007). Thus, makes of change have prompted Toyota to develop low fat system for TPS by implementing JIT approach (Appendix 2: Qualities of Lean Company, p21) (Appendix 3: Traditional unit-cost-focused creation, p22) (Appendix 3 (a): Lean Waste Reduction Result in Lower Total Cost, Upgraded Delivery, p23) (Hill, 2007).
3. Diagnosis: Then, analysis of reviewing the present and identifying the future for better change management is occurred. Reviewing the present state can help organisation to the necessity of change through analysis the causes of problems, current deficiencies and opportunities. Organisation may in a position to clearly identify what's changing and the near future direction through critiquing the current express. Organisation have to assume how and what future that business more likely to achieve and then creating objectives to accomplish it.
The current state of Toyota struggles to produce the types of autos, which can meet up with the market needs and needs, mass production lead to high misuse, etc. Therefore, in order to a well-entranced global company, Toyota acquired established the major goal of revolutionary TPS is to develop competitive advantages- affordable price and high quality and eliminate the problems of current TPS, so that Toyota can contend with other much larger car company although their market share is smaller (Krajewski and et al. , 2007) (Appendix 4: Toyota Creation System, pg 24).
3. Prepare and plan for implementation: Subsequently, company need to make alternatives such as which method should take up for the change and whether full or trial implementation should be run.
Toyota had established 14 management ideas (Appendix 5, pg 25) in its new TPS to guide its operation in various countries including UK (Liker and Meier, 2006). The 14 management ideas are suffering from Toyota's distributor throughout the worthiness stream. Furthermore, Toyota has generated four underlying guidelines to TPS (Stevenson, 2007):
Work should be done specified concerning content, series, timing and final result.
Every customer-supplier interconnection, both inner and external, needs to be immediate and specify. The folks who mixed up in connection, the forms and level of the services and goods and so forth need to obviously indicated,
The flow of products and services must be simple and direct - goods and services are aimed and specific person or machine.
Any improvement in the system must be made in accordance with the 'clinical method, ' at the cheapest possible level in the organisation.
4. Execution change: The implementation of change need to be carried out within an appropriate time. Further, company must be centered on monitoring and managing actions to ensure everything circulation smoothly.
The implementation of lean system has afflicted the Toyota's inner linkages between its key and aiding process and its own external linkages using its customers and suppliers. Within the human resource division, they had emphasised on the right incentive systems that incentive team work. Toyota has provided training and education for employees about the responsiveness of system to problems that makes the apparently rigid system so versatile and adaptable to changing scenario (Hino, 2006).
As a effect, Toyota developed a fresh HRM system - inserted new program such as assimilation (procedure for bringing people into their new TPS culture) and training (On-the-job Training-OJT) into the recruitment system. They may be adopting the OJT to encourage employees to learn their own jobs well to be able to coach others (http://www. toyotauk. com). Furthermore, they exert great efforts to develop people who are in their system through the kaizen program (continuous improvement) such as suggestion program, quality circles, leadership development and the like (Liker and Meier, 2006) (Appendix 6: HRM Platform TMUK, pg 27).
5. Review and combine: Reviews of the change process is needed for review and loan consolidation. Consolidation primarily identifies the unfreezing idea of Lewin's model. After applying the new TPS, Toyota possessed announced there is a huge reduced amount of costs in production process. Further, Toyota can better reaction to the customer's needs and needs.
To summarize, organisation might not exactly able to maintain on the market if indeed they don't deal with the change process properly. Thus, handling change and the power of perceive the change is crucial to future success.
The level of resistance of Change
However, there are a few circumstances faced by Toyota when utilizing the change in their operation. According to Mr. Stevenson, the employees of Toyota dread that they can struggle to put into action the JIT procedure in development with reach the cost-efficiency targets, and therefore develop bad attitude toward the change or respond poorly if required to utilize them. Besides that, the staff of Toyota has used to the traditional production. Each day, they are simply doing the same job, thus, they rely on practices in performing. The behavior of the employees has become a source of amount of resistance to change.
Furthermore, the implementations of changes require high capabilities employees and high skills personnel. Some employees are fear of losing status, jobs, expert and other monetary benefits has refused to change. It is because the changes lead for some change in the organisational framework of Toyota. Some low level staff have been advertised to become high skills staff to participate in the creation lines. Some more mature workers are not able to manage the changes, thus they have a tendency to resist change.
Techniques for Reducing Resistance
There are various methods can be used to overcome the level of resistance to change: education and communication, contribution, facilitation and support, negotiation, manipulation and co-optation and coercion. Among those techniques, Toyota has applied the training and communication techniques. They discuss the change with the employees to help them to start to see the logic of change. They try to understand the problems that encountered by employees through the change process and attempt to solve it out.
Apart from that, contribution is performed by Toyota to work out the condition of resistance to change. Toyota has involved all the employees in the implementation of slim system running a business procedure. Toyota also provides supportive initiatives such as training and development, that assist the employees to adopt the change easily.
(Source: Interview from Sales Professional - Mr. Stevenson, R. )
The Impact of Change on Toyota's Operation
The external and interior factors had prompted Toyota to construct lean system in TPS - a school of thought of ongoing improvement and pressured problem dealing with that drives out misuse, which can help develop a lean organisation. By employing the new creation system, all the levels in development must be completed by establishing the quality and continually enhancing quality standard; therefore, it can meet total quality criteria and delight customers. The revolutionary of the TPS has completely improved the manufacturing process in term of inventory, scheduling, quality control and so forth (Taylor and Brunt, 2002) (Appendix 7: JIT contributes competitive advantages, p 28).
The ground-breaking of TPS had encouraged Toyota create one-piece move within the organisation since it helped Toyota to get rid of waste, drive problem to surface, create interdependency, make problem unpleasant and identify weak links in the circulation and strengthen them (Appendix 8: Waste Lowering Model, pg 29). Thus, it can save their resources and uses it in other areas (Liker and Meier, 2006).
The new TPS helped Toyota in creating standardised process and methods to create constant performance and better manage their operation across the world. The revolutionary of the TPS is concentrating on versatility - by basing development on demand somewhat than simply on capacity. Relating to Mr. Stevenson, Toyota is rolling out a flexibility and responsiveness that persists to set the typical for the industry by concentrating on small quantity and production on what customers want. With all the ongoing improvement, TPS is just about the ideal system in the current quickly changing global environment. TPS increases the production flexibility - able to produce different models on one assemblage line (http://news. bbc. co. uk).
Marketing and Customer Services
The old TPS is concentrating on economic of range rather than the customers' needs and needs. Therefore, demand of products is low as the new competition such as Ford and Standard Motors has released the new vehicles. The use of new TPS has changed from assisting dedicated assembly lines for just one vehicle with high size to low level of the latest models of of vehicles by using the same assembly series.
Furthermore, the revolutionary of TPS possessed empowered the Toyota dished up all the portion of traveler car vehicle market by offering an extensive range of progressive, high quality vehicles and machines. The vehicles are made to satisfy the assorted demand of Toyota's customers, while providing superior quality and stability (Hino, 2006).
Customer satisfaction is a high main concern in today competitive market environment. Mr. Stevenson cited that the execution of innovative of TPS has impacted on the business operation of Toyota - Trim Customer Romantic relationship Management (CRM). Toyota built lean CRM in response to the growing level of customer information accumulated at the many touch-points through the customer lifecycle. Therefore, Toyota can catch the change in customers' behavior easily.
The 'Customer First' idea is generated from the TPS. Toyota realise that no subject how good the final product might be, it is worthless if the merchandise don't meet customers' demands and needs. Thus, Toyota Retail System (TRS) are developed to identify the Toyota Way in retailing. The concept of 'Customer First' is approximately putting the client in the driver's seats prior to the car has even been designed. The concept has separated throughout the whole organisation. The creation of 14 principles of Toyota Way has put on the TPS - Plan Do Check Function - to retail environment. The objectives of TRS are to attain efficiency in retailing and providing best purchase and ownership experience for customers (http://www. toyota. co. jp).
The constant improvement in TPS got developed the utilization of technology in production. The expensive energy price had motivated Toyota to build up hybrid engines (Lynch, 2006). Besides that, the issues of global warning has increasingly worried by stakeholders. The introduction of hybrid technology enables Toyota to more focus on promoting environmental friendly vehicles, which can more invest in corporate social responsibilities.
Traditionally, Toyota was using digital print to print large regions of solid colour without regions of banding appearing and ruining the part. The development of new technology - DocuColor enables Toyota to create with exceptional printing quality (www. xerox. com).
In days gone by, the culture of the Toyota has increased the costs of production; it is because employees keep producing the products without preventing and correcting the problem of the merchandise. Therefore, Toyota gets the intention to build up an company culture, where employees need to discover problems, stop the condition immediately and solve the challenge in those days (Krajewski, and et al. , 2007). The improvement is made at the lowest level of the organisation so the employees who are actually carrying it out are actively involved in doing the improvement (Appendix 9: The contrastive between traditional method of fixing problem and the Toyota method of stopping to fix model, p30 ).
Other than that, the implementation of slim system has fostered the culture of constant improvement, which located quality value on performance and final result. Mr. Stevenson cited that Toyota has also build up a detailed relationship with its suppliers, thus, Toyota only order the materials, which is needed and there is absolutely no extra safe-keeping for unused materials.
Evaluation of the Effectiveness of Change
In the past, Toyota is recognized as an inexpensive producer. But, the reduced cost strategy struggling to help Toyota to establish s strong position in the global and compete with its competition. Therefore, the execution of low fat system in TPS with JIT way permits Toyota to follow both cost leadership and differentiation strategy (Morrison, 2006). Differentiation strategy can be developed through the total quality control and constant improvement in the periods of TPS.
Furthermore, the new TPS has an chance of Toyota to pursue its global specific niche market strategy - Lexus, which tend to focus on high income level people and increase its presence in the global market (Lynch, 2006). Other than that, new technology that invented into the TPS had reduced the price of production through eradicating waste and which makes it better for Toyota to change model quickly in response to changing customer style.
With the revolutionary of TPS, Toyota has dominated the very best ranking for consistency and manufacturing excellence in the 3rd party quality review since 12 months 2006. Predicated on a Consumer Record, there are 47 most dependable car models in today market. Astonishingly, 21 Toyota's models are rank in the study of assessing around 1. 3 million vehicles. Toyota had been voted the global most popular automobiles by Fortune 500 global executives in 2005 and 2006, rating first on the market for quality, and sociable responsibility (http://www. toyotauk. com).
Today, Toyota has replaced GM as the world's most significant car supplier. The successful of Toyota is the global market is because of its sophisticated low fat system running a business operation: creation, customer services and marketing areas. Usually, it takes 3 days to develop a car. Using the execution of JIT strategy in TPS, it takes merely 24 hours to make the automobile from a roll of metallic to completed vehicle. In average, the building of engine is done every 54 mere seconds (http://www. toyotauk. com).
The whole idea of Toyota is 'customer first', which includes lead to the increasingly progress of sales in European countries in 2006. Toyota possessed released its record sales in European countries for 10th calendar year in a row - the success of an gross annual sales progress of 13% and market talk about of 5. 8%. The development of cross types technology was voted as the Best Eco-Friendly Engine unit in 1999 and 2000 (www. issolutions. co. uk).
According to Mr. Stevenson, Toyota has preserved its competitive advantages without making any reduction, while other large car manufacturers are making loss during the economic downturn. This has establish that the low fat system in the Toyota is efficiency and effective and able to react to the external change.
The execution of slim system running a business procedure in Toyota is targets elimination throw away, zero inventories, react to customer's behavior quickly, quality management, and ongoing improvement. However, 'no process can ever be perfect, thus, continuous improvement is necessary. ' The element of continuous improvement can be a competitive advantages of Toyota to sustain competitive in the global market.
TPS enables Toyota to produce vehicles at low costs, but low costs in creation only reduce the selling price (short-term advantage). Therefore, Toyota can endeavour to create vehicles which contribute the long-term benefits for customer - fuel-efficient motors. Fuel efficient engines not only provide customers with long-term advantage, but also cultivate the environmental protection plan. Furthermore, Toyota can research on every aspect of the vehicles and find out the way to save the client long-term costs with the basic requirement of security and safety policy.
Nowadays, global warming is now a concern that worried by general public. Although, Toyota acquired developed the new technology - hybrid engines, which really is a blend of petrol and electric. However, this technology is not extensively developed by the Toyota because not absolutely all the vehicles are produced by using cross types engine. In order to contribute to the modern culture, this can be an chance of Toyota to strive in research and development by using cross types machines in producing all the vehicles.
Technological changes can make well-establish product obsolete, while technology can be used as a value-added function to attain organisational competitive (Terpstra and Sarathy, 2000) (Hill and Jones, 1998). In order to avoid from vehicles obsolete, Toyota must always keep upgrading the most advanced technology which used in manufacturing. Utilizing the most advanced technology, Toyota can be more innovative in creating and processing the vehicles.
The cutting edge of TPS has developed Toyota as a learning organisation - learning continually from the challenge dealing with. Furthermore, globalisation had influenced just how Toyota perform its business in term of marketing and customer services, creation, human reference management, strategy, use of technology and its own business process.
The evolved of company policies had led Toyota successfully passed its competitive rivals - GM and Ford. The implementation of TPS permits Toyota to uses both cost leadership and differentiation strategy to compete in the global market. As a result, Toyota has become one of the world major car manufacturer companies in term of low price and high quality.
In final result, their low fat system made them an ground breaking innovator in the automobile industry and dished up as an important cornerstone of these success.
Appendix 1: Change Management Process
Start of change process
Diagnosis - review today's and identify the future state
Review and consolidate
Plan and plan implementation
Recognition of the need for change
External change, problem & opportunities.
(Source: Hayes, J. (2002) THE IDEA and Practice of Change Management, 1st Model, Palgrave Macmillan, NY)
Appendix 2: Qualities of Low fat Organisation
Apply JIT ways to reduce almost all inventories.
Establish system that assist employees produce a perfect part each time.
Reduce space requirements by minimising the length a part travels.
Build close relationship with supplier, supporting them to comprehend their needs and their customers' needs.
Educate dealer about the responsibility of supporting meet customer needs.
Eliminate basically value-added activities. Materials handling, inspection and rework jobs will be the likely aim for because these do not add value to product.
Build the workforce by constantly increasing job design, training, worker participation and determination, and teamwork.
Make jobs more difficult, forcing responsibility to the lowest level possible.
Reduce the amount of job classes and develop worker flexibility.
Appendix 3: Traditional unit-cost-focused manufacturing
Low Device costs
Reduced Business lead time
Reason: Verify Employee performance to standard and costs estimating
Computer systems (MRP), time clocks, reports
Encourages behaviours that increase Non-Value-added activities
Result: Waste is increase and total system costs is higher
Management reviews accounts, adjust standard
Time Studies, Work Standards
Standard costing and standard hours "Connected Process"
Principle: Improve Specific Efficiencies
(Source: Liker, J. K. and Meier, D. (2006) The Toyota Way, McGraw Hill, US, pg 115)
Standardized work record, and performance boards, andon
Reason: Able to determine normal from abnormal
Standardized work and procedures
Develop consistent process capability
Principle: Eliminate variation
Total system costs, quality and delivery
Abnormal conditions can be corrected quickly, return to best method
Result: waste materials is reduced and total system costs reduced
Visual control, prepared and computerized audits Appendix 3 (a): Slim waste reduction result in lower total cost, increased delivery
(Source: Liker, J. K. and Meier, D. (2006) The Toyota Way, McGraw Hill, US, pg 116)
Appendix 4: Toyota Development System
Heijunka Standardised Work Kaizen
-Stop and inform of abnormalities
-Separate man's work & machine's work
Goal: FINEST QUALITY, Lowest Costs, Shortest business lead time
(Source: Toyota Development System (2007) - http://www. swmas. co. uk/info/index. php/Toyota-Production-System?)
Appendix 5: The 14 Rules of Toyota Way
(Liker and Meier, 2006) (14 Toyota Way Key points - http://www. scribd. com/doc/3718714/Toyota-Way)
Section I - LONG RUN Philosophy
Principle 1: Bottom part your management decision over a long term philosophy, even at the trouble of short-term financial goals.
Section II - The proper process will produce the right results
Principle 2: Create constant process movement to bring problem on the surface.
Principle 3: Use 'pull' systems to avoid overproduction.
Principle 4: Level out the workload (heijunka). (Work like the tortoise, not the hare).
Principle 5: Create a culture of halting to repair problem, to get quality right the first time.
Principle 6: Standardised tasks are the groundwork for continuous improvement and staff empowerment.
Principle 7: Use visual control so no problems are concealed.
Principle 8: Only use reliable, thouroughly tested technology that assists your people and operations.
Section III - Add value to company by growing your partners and folks.
Principle 9: Grow innovator who completely understand the task, live the viewpoint, and show it to others.
Principle 10: Develop exceptional people and teams who follow your company's idea.
Principle 11: Respect your prolonged network of partners and suppliers by challenging them and assisting them to improve.
Section IV - Continually solving root problems drives organisational learning
Principle 12: Go and see for you to ultimately thoroughly understand the situation (genchi genbutsu).
Principle 13: Make decision gradually by consensus, carefully considering all options; use decision rapidly.
Principle 14: Become a learning organisation through relentless reflection (hansei) and ongoing improvement (kaizen) (Bennis. W, 2007) (Liker, 2007).
Appendix 6: HRM Construction TMUK
The innovative of TPS exert a make to shape TMUK's HRM. TMUK's HRM plans and practices are designed to maximise to maximise: (1) The purpose of organisational integration (2) The purpose of employee determination (3) The purpose of versatility and adaptability (4) the purpose of quality.
1. Constant improvement
2. Single Status Facilities
3. Performance Appraisal
4. Daily Team Briefings
5. Brief contract
6. Performance-related pay
7. Company council
8. cross-disciplinary teams
9. Mix training
10. Group decision making
3. Series Stop
4. Continuous Flow Processing
3. Overall flexibility and Adaptability
Toyota Creation System
(Source: Winfield, I. (1994) Toyota UK Ltd: Model HRM Practices?, Journal of Worker Relations, Vol. 16, No 1, pg 41-53)
Appendix 7: JIT contributes to competitive advantages
Strong supplier marriage; reduced variety of vendors, qualities deliveries on time
Cellular layout (enable employees to use several machines and invite those to work in team to provide support and back-up); reduced space for inventory; delivery directly to work areas
Small whole lot size (a level of items that are processed along); low setup time; specialised bin for possessing set amount of parts.
Zero variance from schedules; level schedules (produces small batches rather than a few large batches); dealer informed of schedules; Kanban techniques
Schedules; daily routines; operator involvement
Statistical process control; quality suppliers; quality within the firm
Empowered and combination trained employees; training support; increase versatility by low classification of jobs
Support of management, employees and supplier
Reduction on delay
Reduction on wastes
Reduction on costs - increase margin or reduce selling price, provide a pathway to global market
Increase responsiveness of the Toyota to customers by giving low prices and high quality products - competitive benefits to remain competitive in the global market. (Source: Heizer, J. and Render, B. (2004) Procedure Management, International Edition, New Jersey, US, pg 597)
Appendix 8: Waste materials Reduction Model
Principle: create continuous process flow
Reason: Problem are surfaced quickly and are critical
Utilise Visible Control So that no problem are hidden
Kanban, Supermarket, Defined FIFO lanes
Result: Throw away is reduced
Create Interdependent "Connected Process"
Problem SHOULD BE Connected Quickly
Reduced Lead time
(Source: Liker, J. K. and Meier, D. (2006) The Toyota Way, McGraw Hill, US, pg 83)
Appendix 9: The Contrastive of Traditional method of correcting problem and Toyota approach to stopping to fix problem
Low Product costs
Result: problems remains, added costs to improve later, quality control become "polices"
Reason: preventing the brand prevent "hitting the number"
Principle: Increase creation by never stopping the line
Run rates, line output
Repair place, six-sigma, SPC
Added levels of inspection
Reluctant to recognize problem and alternatives aren't explored
Correct problem "offline"
Control quality through inspection and ocntainment
(Source: Liker, J. K. and Meier, D. (2006) The Toyota Way, McGraw Hill, US, pg 173)
Toyota method of stopping to fix problem
Waste Eradication through correction
Andon, Jidoka, Poke Yoke, standardized work, problem resolving, job instructions training
Reason: increase urgency to identify and appropriate problems, challenge visitors to think
Principle: Get quality right the very first time
Visual control, standardized work, inspection and quality audit.
First time quality, creation output, line stop time, audit effect,
Motivation to recognize and solve problems. Permanent strengthening
Result: misuse is reduced, cooperative environment for improvement
Fixed position ceases and support structure
Stop to repair problems. Never knowingly move flaws to next process(Source: Liker, J. K. and Meier, D. (2006) The Toyota Way, McGraw Hill, US, pg 174)
The researcher experienced conducted a in person interview with Mr. Stevenson, R. , the sales executive of the Toyota in Seven Sister's branch. The interview had been carried out for about 45 minutes.
In handling the JIT operation, what types of changes is involved in the process?
In order to employing the JIT operation, Toyota has generated close relationship between your suppliers. Therefore, the company can provide what the production would like on the precise amount. This assists the Toyota to generate costs efficiency production. The reduced amount of costs can donate to the value of the automobile.
What are the factors that bring about the change?
The prior TPS is focus on economic of level. The objective of previous TPS is aimed at high level of production to lessen the costs of production. However, Toyota found the TPS is not effective in expense saving. Therefore, Toyota began searching for a way to change the TPS to boost the performance of costs saving. Toyota has used JIT strategy in TPS, which everything is about Just-In-Time. JIT approach help the Toyota save up considerable costs in term of storage, excessive material, and excessive production. JIT enable Toyota to get the materials from the provider on the exact amount and produce what the client want. Therefore, there is absolutely no safe-keeping needed because of zero inventories.
What are the main purposes of creating up the slim system for the business or mission of Toyota?
The reason for building up low fat system is to maximize the value added by each activity through the elimination of the needless resources and delays. As a result, the lean system can help eliminate waste, increase flexibility and increase the quality of the product. Slim system is applied in every the activities of Toyota, such as customer marriage management, supplier romantic relationship management, marketing, human resource management etc. Lean system allows Toyota to deal with the change of customer needs and desires on time, and produce only what is needed.
What are the resistances of change or problem of change?
When the change is unveiled, employees tend to show their negative attitudes into the change. It is because the change has change the way they are doing their jobs. They withstand changing because they be concerned that they will not able to execute the change efficiently. Finally, they will be terminated from the careers. However, this is not true because Toyota will give some training and development programs to assist the employees to put into practice the change.
How will Toyota beat the resistance of change?
Toyota has provided training and development about the adoption of lean system in the business operation and production lines for employees. Other than that, Toyota has applied some suggestion program, command development, and quality management programs to build up employees. Employees are given the possibility to discuss the problems they faced through the change management process. Managers will attempt to help the employees to work through their problems to avoid level of resistance to change.
How effective is the TPS after establishing lean system in the process?
It is very effectives. Recently, the monetary downturn has significantly influenced many huge manufacturers such as Ford and Standard Motors. They are making a whole lot of loss through the economical downturn. However, Toyota still keeps its competitive advantages. Toyota does not have any making any loss through the period. It is because Toyota only produces what the client wants. Besides that, Toyota car is famous with the features of reliability.
What are the future strategies of Toyota?
The future strategies of Toyota are to look for more efficiency way to create car predicated on different choice and likes.