Toyota Motors: Total Quality Management

Introduction

For most firms, competitiveness is the key to success. Some companies have devoted efforts to improve their standing in the dynamic market. In addition, several companies have learned to adapt strategies that are designed to improve organizational competency. Primarily, the manufacturing sector has become the concentration of improvements. Definitely, manufacturing is rigorous; thus, it is important that sound production schemes are implemented. Also, the competition in the manufacturing industry has intensified resulting in several modifications in the production processes. Preferences have become one of the major barometers of instituting change in the manner in which manufacturing firms reinvent products.

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In the industry of auto manufacturing, Toyota is considered as one of the most admired and highly emulated. In Asia, Toyota ranks as the biggest car manufacturer. The cars that Toyota produced have encompassed almost all the regions in the world. Toyota has successfully competed with car companies in Asia, Europe, and the United States. Traditionally, cars that Toyota has evolved are known for efficiency and effectiveness. Moreover, the cars that Toyota produces conform to the paying capacity of most consumers. The concept that Toyota promotes is evident in the cheap but quality cars. Aside from the products, the organization has been admired because of its concern with the customers.

The quality that Toyota has instilled in its cars is truly phenomenal. Some credit this performance to the strategic planning that the company formulates. Others believe that Toyota has learned to capture the deepest desire of consumers in cars. Toyota’s strength, however, is credited to its methods of production. The primary culprit to Toyota’s success is the method in which the cars are developed. Undeniably, the total quality management (TQM) that the firm employs creates harmony within the production site and making all employees work like a well-oiled machine.

Total Quality Management Concept

Basically, TQM is a strategy in management that incorporates awareness of quality in all processes that organizations manifest. Deming (1986) defined TQM as a set of schematic activities promoted by the whole organization to effectively and efficiently attain organizational aims. TQM includes the delivery of products and services that are deemed to satisfy customers. Accordingly, firms have to maintain high standards of quality in all the activities performed. In doing so, procedures have to be properly done with wastes and defects eliminated.

TQM assumes that quality covers less cost and unproductive workers. Fundamentally, the cost of poor quality is actually higher than the cost incurred in developing the quality of goods and services. It has to be noted that the organizational procedures advocated by TQM are deemed to promote profitability and keep costs low. (Ishikawa, 1985) The second assumption implies that employees by nature aim at improving their work and production. The role of firms is to provide ample tools and training to the workers. Juran (1969) observed that employees have a natural passion for beauty and precision. Once unrestrained by economics, this drive will be beneficial for organizations.

The third assumption is related to the systems of organizations described as highly interdependent. Usually, problems are faced consistently across traditional functional lines. In achieving quality, the challenges in production have to be considered part of the entire system. The final assumption is concerned with senior management. Definitely, the top executives have to be at the forefront in addressing issues and efforts to attain quality. (Deming, 1986)

In manifesting TQM there are particular principles that are used as guides by organizations. First, quality has to be present in all work processes. This includes the different entities of companies that are responsible for evolving the products. Second, the uncontrolled variances in the procedures cause quality problems. Thus, workers in the front line are required to control and analyze such problems. Third, TQM has to be delivered systematically and has to follow cycles based on facts and relevant information. Fourth, continuous improvement has to be maintained and learning is always a priority. (Hackman and Wageman, 1995)

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Just-in-Time Inventory

One of the classic methods that Toyota introduced in the world economy is the process of just in-time inventory. The logic in this method is emphasized in the production and delivery of cars to customers (Hirano, et al., 2006). In implementing this method Toyota sees financial and operational benefits for the firms. The essence of the system is the fast dissemination of automobiles to make way for other productions. The pace being taken by Toyota is phenomenal. The use of the inventory makes way for Toyota to introduce newly innovated cars in the market.

The concept of JIT assumes that inventory is waste. Inventory continues to incur a cost as it is kept in storage areas. Aside from this requirement, there are several other costs associated with inventory. The process of JIT suggests the elimination of inventory that will remain within the company for long periods. In addition, manufacturing needs to develop production processes that limit excess inventory. There are tendencies when companies try to hide their stocks. This is purposely done to eliminate suspicion of a flawed production system. In general, JIT promotes the use of proper materials, production time, location, and machinery, and processes.

Because the old models are distributed already, Toyota can start promoting its new line of products. This serves as an advantage because it is Toyota that comes first with new innovations. Another thing that makes the inventory method beneficial is that it helps reduce the cause of productions (Womack, et al., 2003). Price movement in the market happens unpredictably. For Toyota to adjust to changes in supply and car parts prices, the earlier produced vehicles have to be dispatched.

The initial results of using JIT in Toyota were below expectations. But gradually, the company was able to observe the benefits of the inventory system. The management was impressed with the savings gained and quick sales recorded by the company. Toyota Motors also got positive feedback from several users. Moreover, JIT has promoted a built-to-order scheme. In doing so, risks were minimized and the return to equity significantly increased. This process has been considered as the major contributor to its current success. Toyota has allowed the involvement of suppliers and customers to ensure collaboration in the processes involved.

Overall, the use of JIT can reduce the time used for assembling the cars. JIT also managed to improve the flow of products from the warehouse to the distributors and retailers. It is known that employees from Toyota as highly skilled. The inventory system has allowed multi-tasking and added efficiency in the process. Aside from these benefits, JIT ensures that the scheduling and working hours are manifested efficiently. As stated, JIT demands supplier participation. Toyota’s use of JIT has created a relationship with most of its suppliers. Further, JIT focuses on the maximum use of resources. JIT is a process centered on boosting company turnover.

Kanban System

Kanban is a concept that is derived from the process of JIT. Ohno (1998) noted that Kanban is necessary to achieve successful JIT. In firms, Kanban is a system that serves as a catalyst to action. The conventional manifestation of Kanban uses cards to signal action. But others firms have been using other materials to determine a movement in the production chain. In Toyota, Kanban was used to promote the need for production improvements. It was a complement system that ensured efficient flow in production. Moreover, Kanban underlines the problems areas in production and can warn personnel to make the changes.

Toyota used the basic form of Kanban called the three-bin system. This was used to ensure that the materials used for production are of high quality. Kanban is usually included in the process of the supply chain. It is used as a method of managing intermediate stocks in the chain. The issuance of more Kanban allows the production to monitor demand fluctuations. This prevents the overproduction of stocks. In using Kanban, the firm has to strictly pay attention to rules. Toyota Motors use 6 rules for this purpose. Aside from following the rules, these have to be monitored.

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The use of Kanban can potentially decrease the level of inventory from 25% to 75% (Gross and McInnis, 2003). This means that obsolesce and inventory-related costs are eliminated. It is also believed that Kanban prevents the firms from being affected by the bullwhip phenomenon. Kanban is used to monitor alterations in the supply chain in relation to consumer demand. Moreover, using Kanban encourages improvements in the strategies used in businesses. Among the developments pushed by Kanban include the reduction of scraps and maintenance.

Kanban has also the capacity to reduce training costs. In most firms, Kanban has removed their production scheduled known as MRP. This production scheme relies upon personnel and computers. Hence employees with high computers skills are needed to make the MRP function. In addition, MRP is dependent on forecasts and is difficult to change.

As stated, Kanban and JIT are closely linked. Kanban serves as an enhancement in JIT because the former improves the communication process and limits the tendency of overproduction. Some companies are misled by Kanban as a substitute for JIT. Other firms also consider Kanban as a limited inventory system. In truth, Kanban is an encompassing component of JIT that covers aspects beyond stocks. The process of Kanban requires knowledge in industrial engineering. Kanban cards are reduced to promote efficient flow in the product. It is logical for firms not to use Kanban as a sole system. It is more often included in the processes of Kaizen and the 5S.

Emphasis on Quality

TQM in Toyota Motors starts with the manufacturing scheme that the company employs. The main goal of the company is to align each manufacturing process with quality. Hence, Toyota has developed lean manufacturing, which is prominent among other manufacturing companies. Over the years, the company has managed to survive amidst the intense market competition. In fact, the processes developed have been used by other companies. The key in the manufacturing process is to optimize production and eliminate wastes. Also, the method eliminates excessive costs. Lean manufacturing has four fundamental processes. These serve as the guide for the company in maintaining TQM.

First, the company is aware of the wastes that are connected with the production. The manufacturing schemes are designed to eliminate wastes such as overproduction, unnecessary motion, repairs, over-processing, waiting, excess inventory, and inessential transportation. Basically, the responsibility is tasked to the employees in the front line of manufacturing. The methods are likewise spread throughout the entire organization. Second, Toyota maintains progressive quality assurance. Instead of making an inspection after production, each process is provided with quality assurance procedures. Once substandard products are detected, workers have the right to remove the products to reduce cost. Toyota formulates instructions to properly manifest product inspections.

Third, the company promotes just-in-time production. It is designed to provide the exact demand of the market. The rationale behind this method is observed in the elimination of stagnation in and between process steps so as to minimize in-process inventory, avoid waste in transportation and motion, and improve feedback on defective output. Despite this scheme, the company has remained flexible in meeting excess demands.

The last principle is described as level production. In this method, peaks and troughs in the volume are reduced to ensure optimum capacity use, and the process is engineered to enable the fastest possible throughput. Tasks are balanced between workstations and process steps so that utilization is maximized and overall cycle time kept to a minimum. (Clifford, et al., 1998)

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Sustaining Production Quality

Toyota continues to build its organization with quality as the cornerstone. For the company, the only way to maintain its lofty position in the market is to exhibit continuous growth and development. Toyota firmly believes that quality is an unlimited concept. Thus, achieving quality is a process and a cycle. The company has focused on quality as other companies have continually made successful upgrades.

Globalization has changed the phase with technology contributing to the success of most manufacturing firms. The method in which Toyota has carried out provided the company with the best that the industry has to offer. The quality in the cars of Toyota has been known in the world. The immense improvement that Toyota has been undertaking will be crucial in its future market standing.

Continuing the quality enhancement has been the primary goal of the company. The immediate recipients of such an aim are the workers of the company. Toyota has recognized the need to allow employees to flourish. Basically, Toyota workers have to embrace the values of quality and manifest these values in production. As a result, the products of Toyota have tremendously improved and wastes were reduced significantly. Moreover, Toyota has been undergoing several pieces of research in improving product quality.

Product diversification is needed since most cars in the market look similar. The company has learned the methods in building characters in the cars bannered by the top-notch quality. This is observed in the performance of Toyota products and the ability of the cars to provide limitless satisfaction. Furthermore, the manufacturing processes are still being practiced with quality. The firm has been modifying the procedures to ensure that TQM is being implemented. (O’Brien, 2003)

In general, the strategy of Toyota thrives in TQM. The ultimate goal is to yield the best results at every step of production. Although such is an unimaginable thought, Toyota has succeeded in equating the capacity of the workers and the procedures being implemented. Indeed, several firms have learned to manufacture the Toyota way. The dedication of Toyota to Total Quality Management, Just-in-Time inventory, and Kanban makes the firm above and beyond the competition.

Conclusion

Toyota ensures that quality more than just manufacturing one of the best cars brands in the market. The delivery system that the firm manifests is also incorporated with quality. The company guarantees that damage is eliminated in transporting the cars. In addition, the company has created after-sales services for clients and prospects. Toyota has established networks of communication to accept queries, comments, and suggestions coming from customers.

TQM is an important breakthrough in the sector of manufacturing. Since the dawn of competition, quality has become a necessity among manufacturing companies. It is an advantage to incorporate quality in all aspects of company activities. Moreover, its emphasis on the use JIT has further improved its production process. Toyota has also enhanced the JIT system with Kanban. The collaboration of these three processes has allowed Toyota to become more than efficient. Toyota Motors has become an emulated firm because of its successful production strategies.

It is expected that critics will argue on the validity of TQM as an effective and efficient strategic method. Dubois (2002) argued that the use of the term TQM in management discourse created a positive utility regardless of what managers meant by it. In the late 1990s, the usage of the term TQM in the implementation of reforms lost the positive utility attached to the mere fact of using the term and sometimes associations with TQM became even negative. Nevertheless, TQM remains valuable in most organizations. Toyota firmly believes that quality always has a place in the processes being maintained by the company.

References

Deming, Edwards W. (1986). Out of Crisis. Cambridge: MIT Center for Advanced Engineering Study.

Dubois, HFW (2002). Harmonization of the European vaccination policy and the role TQM and reengineering could play. Quality Management in Health Care.

Gross, J.M, and McInnis, K.R., (2003), Kanban Made Simple: Demystifying and Applying Toyota’s Legendary Manufacturing Process. AMACOM.

Hackman and Wageman. (1995). Administrative Science Quarterly. Total Quality Management: Empirical, Conceptual, and Practical Issues. Cornell: Cornell University.

Ishikawa, Kaoru. (1985). What is Total Quality Control the Japanese Way? New Jersey: Prentice-Hall.

Juran, Joseph. (1969). Managerial Breakthrough: A New Concept of the Manager’s Job. New York: McGraw-Hill.

O’Brien, James. (2003). Birmingham Post. Manufacturing: Toyota Members Stop at Nothing for Build Quality. Independent Newspapers Ltd.

Ohno, T., (1988), Toyota Production System – Beyond Large Scale Production, Tokyo: Productivity Press.

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