Knowledge Management: Toyota Case Study

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Strategic Information Systems (SIS) play a pivotal role in production planning in major corporations. Toyota has created the Toyota Network System (TNS), which connects dealers, manufacturing plants, and suppliers to maximize the effectiveness of production management (Monden, 2019). The preliminary production schedule is developed using the three-month forecast reports from the Japanese and international dealers (Monden, 2019). Dealers submit their orders based on the reports, although they may change certain specifications, such as car color (Monden, 2019). Hence, Toyota uses information on market needs to regularly update the production schedule.

Several aspects of the Toyota knowledge management system make it one of the best in the world. New employees hired to work at a new factory learn from the experienced workers at the existing factories first (Azam, Khilji, and Kham, 2016). When a new factory opens, Toyota transfers a group of experienced employees to work alongside the new ones to ensure they meet production quality standards (Azam, Khilji, and Kham, 2016). This system allows for an efficient transfer of knowledge and experience between new and long-serving workers and improves overall quality control.

Then, it seems reasonable to mention that Toyota’s approach to knowledge management contributes to the development of ties and the share of knowledge among suppliers. It may be claimed that this approach is quite specific. In the late 1970s, the company arranged a group of about 60 of its crucial suppliers into voluntary study groups in order to help each other within the scope of performance, as well as quality (Bridges, 2020).

Such a group involves about seven suppliers, and several of them adhere to a similar production process. Generally, the corporation reorganizes the mentioned groups on a 3-year basis in order to provide the activities with stimulation in the framework of common interests. Annually, there is the meeting of the suppliers with responsible Operations Management Consulting Division’s managers that is aimed at the determination of a year’s theme (project) (Toyota, no date). The pivotal idea here is to support each other within the mentioned common interests.

After this theme is agreed upon, the groups establish schedules to attend supplier’s plants in order to identify areas for improvement in conjunction. These groups spend about for months focused on the suppliers’ performance, acting as a consultative formation. Such a tactic allows the company to provide its expertise that aims to assist with overcoming actual issues. Moreover, the described actions lead to the firm’s “learning” what is being comprehended by the suppliers. It appends to the company’s stock of knowledge, and the top management is able to monitor and take into account new ideas regarding the advancement of TPS. This is essential for Toyota’s networking as Operations Management Consulting Division may transfer the described knowledge to the corporation’s internal operations.

The above materials allow assuming that Toyota has some key aspects given by the WIIG Knowledge Management Model (Paul, no date). According to the latter, a firm is to build knowledge, founded on personal experience, formal education, or training. It is visible that this stage is implicated – for example, new employees learn from the experienced ones. Then, a company is to hold the knowledge gained by appealing to fixing its intangible forms – knowledge bases, books, or documents. In this regard, Toyota’s workers are provided with numerous materials on the firm’s corporate social responsibility, production processes, and approach to attitude towards each other.

The WIIG Knowledge Management Model also involves the stage of knowledge pool by utilizing KM systems or groups of individuals brainstorming. Through these lenses, Toyota uses its TNS and voluntary study groups, which contributes to both bits of knowledge obtaining and pooling. Finally, there is the stage of the use of knowledge – the implication of the latter at the necessary levels and within the required scope. Toyota’s related strategies – initially – are designed to achieve this implication in a proper manner, and all the processes in this regard are smooth and coherent due to such tools as Management Information System.

The Toyota Management Information System possesses several efficient internal controls that contribute to significant knowledge discovery. It collects internal reports from all the company’s branches and transforms an unstructured and vast volume of data into a comprehensive piece of knowledge for the related recipients. For instance, this may be several management reports on the peculiarities and outcomes of a specific production process. The Toyota Comprehensive Warehouse Management System is designed to maintain the reporting that will be a foundation for appropriate decision-making in the operational dimension.

Then, there is advanced SAP that provides the company with the opportunity to obtain and process information, as well as to fix inaccuracies immediately, which may be considered as significant knowledge capture. At this point, it should be noted that the SAP enhances a plethora of marketing operations of the company in the framework of product development, pricing policies, and sale projections. It is vital to state that the corporation leans on external sources of knowledge as well (Ferenhof et al., 2018). Amongst the most important ones are external consultations, thematic conferences, and monitoring of the rivals’ best practices from various perspectives.

In order to achieve significant and effective decision-making at all levels, essential knowledge within the company is processed and handled appropriately through the Material Handling System. Variables in the framework of the method essential data is obtained and documented may transform knowledge and trend studies (Sharafuddin, 2017). What is more, given the fact that information collection and documentation activity eventually vary with the flow of time, the top management has created flexible approaches to enhance system development through the Management Information System.

The mentioned processes are constantly well-structured, and all knowledge is shared among employees promptly and effectively. For example, the workers have the possibility to get this knowledge via specific tracking systems available for them.

Finally, Toyota pays notable attention to the way information converted into knowledge is implicated. The firm has developed an advanced system in this regard – employees have a weekly meeting during which they get acquainted with the necessary information. Then, the instruments of the Management Information System allow managers to monitor to what extent workers apply the obtained knowledge in practice. It should be noted that before this knowledge is applied, the management makes sure that an employee understands what is delivered to avoid any production risks.

The SECI model involves four critical phases – socialization, externalization, combination, internalization (Zeeman, 2019). Toyota actively employs the socialization aspect of the SECI model, even at the lowest levels of production. To encourage production workers to share tacit knowledge, the company introduced regular weekly meetings (Azam, Khilji, and Kham, 2016). Employees use these meetings to analyze their efficiency, discuss the problems, and suggest ideas for improvements (Azam, Khilji, and Kham, 2016).

Azam, Khilji, and Kham (2016) note that this approach has been hugely successful and contributed to many of the innovative products and ideas developed in the company. This policy shows that Toyota management realizes the value of tacit knowledge and effectively employs it to improve production.

Then, the externalization approach is mostly brought into life in the form of documenting. Responsible managers monitor and document tasks each team of employees – as well as a particular worker – is asked to perform on its assembly line (Dyer and Nobeoka, 2000). These documents give a description in detail of all the processes are implemented, how long each process should take, and the sequence of stages that are required to realize a task. Moreover, such documents contain information on how employees are to monitor their own work.

The combination phase is conducted as follows; employees who have got acquainted with the mentioned documents are accompanied by several highly-experienced workers who get new knowledge first (Suh, 2017). At this point, the latter ones will work alongside their less competent colleagues to guide and assist them if necessary. These highly experienced mentors serve as a foundation for the combination of explicit knowledge. With their assistance, all teams start demonstrating significant performance within the production scope.

Finally, the internalization takes place; again, through weekly meetings, knowledge is being enhanced and becomes an integral part of an employee’s approach to work. According to Azam, Khilji, and Khan (2016), TPS is quite flexible for implementing new knowledge, ideas, and policies; thus, workers are put in remarkable conditions in this framework. It might be assumed that the primary challenge within Toyota’s SECI model is that it is over-relies on the experienced employees. Hence, in order to overcome some negative consequences of the human factor, it seems rational to provide all the staff with monthly or quarterly tests, as well as to conduct a comprehensive evaluation of their performance and give feedback.


Azam, M., Khilji, A. B., and Khan, W. (2016). ‘Knowledge management as a strategy & competitive advantage: A strong influence to success (a survey of knowledge management case studies of different organizations)’, Public Policy and Administration Research, 6(10), pp. 1-15.

Bridges, M. (2020). Learning organizations: making supplier networks a valuable source of competitive advantage. Web.

Dyer, J. and Nobeoka, K. (2000). ‘Creating and managing a high‐performance knowledge‐sharing network: the Toyota case’, Strategic Management Journal, 21(3), pp. 345–367.

Ferenhof, H., Cunha, A., Bonamigo, A., and Forcellini, F. (2018). Toyota Kata as a KM solution to the inhibitors of implementing lean service in service companies. VINE Journal of Information and Knowledge Management Systems, 48(3), pp. 404–426.

Monden, Y. (2019). Toyota management system: Linking the seven key functional areas. New York: Routledge.

Paul, E. (no date) 4 Knowledge management models that can supercharge your organization. Web.

Sharafuddin, N. (2017) ‘The role of knowledge management in achieving sustainable competitive advantage in business’, Journal of Education and Social Sciences, 6(2), pp. 137–142.

Suh, Y. (2017) ‘Knowledge network of Toyota’, Annals of Business Administrative Science, 16(1), pp. 91–102.

Toyota. (no date). Web.

Zeeman, A. (2019). SECI model (Nonaka & Takeuchi). Web.

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