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Toyota's Total Quality Management

The once special spell of Henry Ford's T-modal and set up lines is an extended forgotten memory. In today's highly dynamic market place the consumer can't be satisfied with a dark-colored color ford. Today the global motor vehicle industry is facing its toughest problem of delighting the customer in an inexpensive manner.

The Toyota engine company of Japan has used this challenge really and has demonstrated its capacity to contend with the once emperors of the industry such as Ford, Volvo, Chevrolet et al. Buy careful adoption of cutting edge solutions such as Total quality management, Toyota has transformed itself into a game changer on the market.

This assignment focuses how Toyota achieved its targets using TQM. It unfolds in three levels you start with TQM and its scope. Second of all competitive environment evaluation with SWOT and PESTLE analyses and lastly it finds conclusion predicated on a thorough analysis of the organization.

Company Overview

Toyota Electric motor Company (TMC) is the crown of Japanese auto industry. Started as a small car maker on August 28, 1937 it gifted many quality inventions to the entire world throughout its history. In the first 1980s Toyota acquired its first quality control honor in Japan.

The company launched its luxury brand Lexus in 1989 which became an enormous success. It also manufactures Scion an economical car brand that targets adults. Toyota also conquered the hybrid car market with the release of its iconic car Prius in 17.

Today with a employees of 71, 116 and an total annual sale of US$228+ billion, Toyota is really as profitable as all the other car companies put together. In 2007 it became the world's major auto manufacturer conquering Basic Motors.

(Info - http://www. toyota-global. com/)

Literature Review

Total Quality management

Total quality management can be described as

"A management mindset that seeks to combine all organizational functions such as marketing, funding, design, engineering, creation, customers satisfaction et al. to focus on interacting with customer needs and organizational goals. "

[Abstract Besterfield D, Michna Besterfield C, Besterfield Glen and Besterfield-Sacre Mary Total Quality Management (3rd Release) (2002)]

The team of the organization that the TQM is applying tries to take part in improving functions, products, services as well as the culture which they work. This process is encouraged by quality leaders such as Philip B Crosby, W. Edwards Deming, Kaonru Ishikawa and Joshep M. Juran.

According to Deming TQM includes 14 principles.

1. Create constancy of purpose

2. Adopt a new philosophy of cooperation

3. Cease dependence on mass inspection to achieve quality

4. End the practice of awarding business

5. Improve constantly, and forever

6. Institute training

7. Adopt and institute authority for the management of individuals,

8. Drive out fear and build trust

9. Break down barriers between departments.

10. Eliminate slogans, exhortations, and goals requesting zero defects or new degrees of productivity

11. Eliminate numerical goals, numerical quotas and management by objectives

12. Remove barriers that rob folks of pleasure in their work

13. Institute a vigorous program of education and self-improvement.

14. Put every person in the business to work to perform the change.

Today The idea of quality is significant more than ever before. The annals of quality will go so far as 1920s to the days of experts such as F. W. Taylor who is the "father of methodical management".

It erupted in 1950s in Japan in a period where the Japan were looking ways to boost their market that was ruined by World Warfare 2. By 70s high quality Japanese goods experienced flooded the united states and European markets. It took 20 years for the west to capture up the Japanese quality system.

By today the growing global competition the quality has turned into a decisive factor and is encouraged by changing customer needs. Today the customer is the individual who defines the grade of something. Quality management is important because obtaining a higher quality is ever changing.

Also failing to meet the quality standards continuously would bring about sacrificing customers.

An organization can take many initiatives to make sure quality of its products.

Standardization is one particular initiative that assures quality. Standardization can be carried out by spherical interchangeability, variety lowering; improved communication of technological criteria, commonly decided safe practices and performance guidelines. Standardization applies to raw materials, trials, sampling methods as well as processes

Institutional learning is another way of ensuring quality. Here the training process for workers are recorded and you will be used in the learning process. The learning varieties such as lessons as well nearly as good practices are the primary sources of the knowledge working process. The institutional learning process can be further enhanced through training workshops, analysis materials as well as digital training advertising.

Also through knowledge management a business can assure the grade of its products. Under knowledge management the capacity to sustain knowledge, educational capacity, design and training methods, the training programs as well as certified trainers are the majors concerns under knowledge management.

The fruits of knowledge management can only be chosen when:

The learnt knowledge sets in to practice.

The knowledge is material in advancement.

Turning tacit knowledge in to explicit knowledge

Gathering and conserving knowledge out of every possible source such as information, experience etc.

SWOT Analysis

SWOT evaluation is a method used to analyze the inner and exterior environment of a business. Following is a thorough SWOT research of Toyota Engine Company.

Strengths

  • Toyota operates factories in US and China that led to upsurge in company gains since 2005.
  • The company through careful segmentation, Targeting and setting offers the right product combination to the marketplace.
  • Toyota is highly effective in its making which uses total quality management.
  • Toyota has a strong brand name which is a house hold brand all over the world.

Weaknesses

  • Toyota is excessively focused on US and Japanese marketplaces. Thus is suffering from fluctuating economic and politics conditions of these countries.
  • Toyota has few tiers in its hierarchy and because of this there are few opportunities for offers.
  • Heavy emphasize on techniques such as kaizen has led to more impressive range of stress among personnel.

Opportunities

  • Toyota and Lexus has pioneered the environmentally friendly technologies. The world needs vehicles inspired by such systems more than ever.
  • The company is targeting the urban children market that includes a huge potential.
  • The EU is rising as an environment of opportunities for car manufacturers. Toyota already has a big market show in countries such as Denmark, Finland, Ireland et al.

Threats

  • Global recession has substantially afflicted the performance of the global automobile industry.
  • Rising gas prices due to the OPEC decision of price hike is a severe harm.
  • In 200, 2010 the product recall of Toyota was believed to be million devices. This may have adverse effects the organizations reputation.
  • Toyota encounters strong competition from competitors. New entrants from China, South Korea and India are growing swiftly.

(Info http://www. marketingteacher. com/swot/toyota-swot. html)

PESTLE Analysis

The PESTLE stands for

P - Political

E - Economical

S - Social

T - Technological

L - Legal

E - Environmental

Political

Since it is a worldwide organization Toyota needs to take notice of the global political situation. For the past few years Toyota has been enjoying from some of the governments key decisions. The government's decision to limit vehicle imports to Japan and the united states government's advantages of quota system in vehicle importing eases the pressure of heavy competition from the outsiders.

The Japanese federal government has provided stimulus packages and duty reliefs to cope with the recent financial down flip.

Economical

The global recession has hit the global car industry greatly. With inevitable losses companies have a tendency to cut jobs. The same does apply to Toyota.

Due to sky rocketing cost of living people might be prioritizing the fulfillment of their needs at primitive levels. In such a backdrop the industry could easily get a serious blow. Also during the past 5 consecutive years the global vehicle mobile sales in major markets have sharply dropped.

Social

Social factors are essential in deciding the demand for a certain good. Throughout the past decade Japan is experiencing an evergrowing adult population. It is estimated that by 2030 the 65 year old people will be 25. 6% of the total inhabitants of Japan. Some critical changes in this structure of the country can be viewed. Also the country's negative populace expansion rates provide serious implications for the business organizations. Because the shrinking population implies that the business organizations will have to face a lack in skilled labor soon.

[Source Matsumoto Yoshiko Faces of Increasing age: The Lived Experiences of older people in Japan ]

Technology

With the benefits of cutting edge production systems adoption of such solutions in the vehicle industry can be extensively seen. Usage of robotics for development in Japan has become a major trend.

In these details age people have more ways to learn about products which makes today's consumer an extremely aware one in comparison to some decades back again.

The development in INTERNET resulted in many organizations going online. The business will have to adapt to the new floor realities of online marketing to stay prior to the curve.

Legal

Today although the free trade is been seriously marketed some key player in the global economy are following protectionism. Countries such as India, Brazil et al are imposing legal restrictions on foreign automobile manufacturers to be able to promote indigenous developing.

With its recall of some of the car models in 2010 2010 Toyota acquired to handle several court circumstances over accidents occurred credited to defect Toyota vehicles. It had been reported that Toyota has paid $ 1. 2 million in arrangement of a case that was filed against the business.

(Info http://www. dailymarkets. com/stock/2010/12/28/toyota-pays-10m-crash-compensation/)

Environment

The global warming and environment change has turned into a burning problem nowadays. The changes in this regard have a significant impact on the global automobile mobile industry.

The global warming has insisted the global car manufacturing firms to create less emission solutions. Governments all around the world are elevating the expectations and tightening environmentally friendly laws on this matter.

In addition to the global warming problem the dwindling oil reserves in Midsection Eastern countries which are anticipated to come to an end as soon as 2040s has urged the auto manufacturers to seek more sustainable and energy efficient solutions for future years.

The renewable marketing has become a major weapon for any organization competing in todays car industry. Today the inexperienced products as well as green production methods has become a threshold oftentimes. Thus any business lagging behind its counterparts in inexperienced marketing is at the road to damage.

Analysis

Although the full total quality management is broadly adopted in the current highly energetic business environment Toyota motor company has its own version of quality management called the Toyota development system or TPS. The TPS includes just in time production this means manufacturing products in required portions avoiding unwanted inventories Kanban and Jidoko or automation.

According to the field research done and printed by Harvard's Steven J. Spear it contributes to the conclusion that Toyota has achieved a strong capability by following a 'Rules-in-Use' for

Organizational design, improvement, and adaptation.

[Source Spear J Steven Just-in-Time in practice at Toyota: Rules-in-Use for building self-diagnostic, adaptive work-systems Harvard Business Review Oct 2002]

The paper identifies that in TPS managed organizations every operation is performed by carrying out hypothesis testing experiments that makes accelerated era and accumulation of specific and organizational studying coordinating delegating, and performing work done collaboratively. This also includes work which is performed regularly few times.

The findings offers literature by detailing the most tools that acquired whole lot of attention in the operations research process were trusted and were giving uninterrupted service with no malfunctioning.

[Source http://www. icsti. su/rus_ten3/1000ventures_e/presentations/production_systems. html]

Just in time

The idea behind just in time is manufacturing the required quantities in required volumes at the mandatory time. For example the assembly type of a car happens all the sub assemblage lines should reach the primary assembly line in right amounts. This will eliminate the dependence on inventories thus eliminating the necessity for warehouses and storage space facilities. Because of this the inventory cost will be significantly reduced giving a higher capital turn out to the company.

The JIT produces quality products within an useful manner by completely eradicating waste, inconsistencies and unwanted use of development lines. Based on the JIT the Toyota by adhering to the following recommendations can manufacture a car which was bought by a customer in a soonest possible manner.

No earlier an order is received for a car the instructions as well as technical specs of the vehicle reach the start of the production range.

The assembly lines is stored with sufficient parts and components to permit the plant to assemble any kind of vehicle model without the delays.

The assembly brand must replace the parts used by retrieving the same range of parts from the parts-producing process.

The preceding process should store a little number of all types of parts to create only the amounts of parts that were retrieved by an operator from another process.

Although it proves to be always a success of following JIT method it is an elaborate exercise at Toyota as its business includes hundreds of spare parts and components.

Kanban system

Although many think that kanban is TPS, the kanban method exist to control the just in time method. Simply it can be an information system which regulates the quantities in every process.

In kanban the required amount of devices and types are written in a card called kanban. It really is send to the people in preceding process to the subsequent process which links many procedures in a Toyota herb. This technique is recognized by followings.

Smoothing of process

Reduction of machine setup time

Autonomation

Standardization of jobs

Improvement activities

Kanban uses two cards. One a withdrawal credit card and the other a production order credit card.

(Source - http://www. toyota-global. com/)

According to the aforementioned figure there are two functional flows as production training kanban and the functional movement of parts retrieval kanban.

In the development teaching kanban it consists of 3 distinctive steps. First of all a production education kanban A is removed when an operator retrieves parts. Then your amounts of parts that are mentioned in the kanban cards are only created. Thirdly the kanban is attached to the newly make parts ready for another process.

Then another process starts off on the functional flow of parts retrieval kanban. The parts are used in this technique from the preceding process. Then as the first rung on the ladder the parts retrieval kanban is removed when an operator uses parts. Secondly the operator provides the kanban to retrieve substitution parts. As the third step the operator removes the production training kanban and replaces it with a parts retrieval kanban. Finally the parts that are displaying the parts retrieval kanban are carried to the next process.

Autonomation

To gain maximum of just in time 100% good systems must reach the last process. And this process should continue without any interruptions. This means quality control must co-exist with JIT to get the best out of kanban.

The idea behind autonomation is built in a system methods to avoid mass creation of defective items in products. It entails autonomous inspections for abnormalities along the way. At Toyota all machines are autonomous where every machine is attached with automatic stopping device. This avoids mass creation of faulty items and also alarms machine rest downs if there are any.

The above theory also applies to the manual works at Toyota where an employee pushes the stop button if something excessive happens in the creation line. This would eventually cease the operations of his complete lines.

In order to discover discrepancies along the way a device called andon, an electric light mother board is hung very high in the manufacturer that it's noticeable to everyone this is named Toyota's visible control system.

Conclusion

The Toyota creation system is a practical and effective as it popped out from the real life experience of the organization. This system is enriched with sensible effects, actual routines and implications on the analysis.

This system has a vital role in expanding the grade of operations of the companies all around the world. Even to this date hundreds of traditional western companies are employing the Toyota quality management methods that are a clear sign of Toyotas success.

Since Toyotas founding we've adhered to the core principal of adding to world through the practice of making high quality products and services. Our business techniques and activities predicated on this core primary created values, beliefs and business methods that over time have grown to be a source of competitive advantage. they are the managerial values and business methods that are known collectively as the Toyota way. - Fujio Cho, chief executive Toyota

[Source Liker Jeffery, The Toyota Way, McGraw-hill, 2003]

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