MANAGEMENT SCIENCES

DEPARTMENT
Semester : 6th
Assignment No:02

Topic:
Application of TQM in TOYOTA Motors Corporation
Subject:
Total Quality Management
Submitted by:
Siraj Munawar (Bs-910)
BBA (hon)
Submitted to:
Madam Maimoona
Date of Submission:

ISLAMIA COLLEGE
PESHAWAR
(Chartered University)
Acknowledgment
This assignment would not have been possible to complete without the
support of my teacher Madam Maimoona. I want to express my gratitude to
her supervision and guidance which was abundantly helpful and offered
valuable assistance.
Special thanks to all my friends especially Mehran and Ahmad Alam for
sharing the literature and giving valuable assistance.
Finally, I want to express my gratitude to my beloved family, for their
understanding and endless love through the duration of my studies.

Table of Contents
S.No
1

Title

Page No.
Abstract

Introduction to TMC

Introduction to TQM

TQM in TMC

How TMC Implemented

TQM

How TMC implemented

Cost Reduction

Abstract
The TOYOTA Motor Corporation company was founded by Kiichiro Toyoda in 1937 as a
spinoff from his father's company Toyota Industries to create automobiles. Three years
earlier, in 1934, while still a department of Toyota Industries, it created its first product,
the Type A engine, and, in 1936, its first passenger car, the Toyota AA.
TQM is a management approach of an organization, centered on quality, based on the
participation of all its members and aiming at long-term success through customer
satisfaction, and benefits to all members of the organization and to society.
The world of automotive manufacturing in particular is one of the king of Toyota, where
Toyota has a management system that is reliable in managing all aspects of
management, TQM (Total Quality Management) which is a symbol of the triumph of
knowledge management in a very interesting to learn.

TOTAL QUALITY MANAGEMENT APPLYING

TO TOYOTA MOTORS CORPORATION
History of TMC:
Toyota Motor Corporation (Japanese) commonly known simply as Toyota and
abbreviated as TMC, is a multinational automaker headquartered in Toyota, Aichi,
Japan. In 2010, Toyota Motor Corporation employed 317,734 people worldwide . TMC is
the world's largest automobile manufacturer by sales and production.
The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's
company Toyota Industries to create automobiles. Three years earlier, in 1934, while
still a department of Toyota Industries, it created its first product, the Type A engine,
and, in 1936, its first passenger car, the Toyota AA. Toyota Motor Corporation group
companies are Toyota (including the Scion brand), Lexus, Daihatsu and Hino Motors,
along with several "non-automotive" companies. TMC is part of the Toyota Group, one
of the largest conglomerates in the world.

Origin:
Toyota's origins trace to the Toyoda Automatic Loom Company and its founder, Sakichi
Toyoda, who developed a loom licensed to a British company for about 1 million yen.
The licensing agreement financed the Toyota Motor Company under Toyoda's son,
Kiichiro. Cars were built on a modest scale, with only 1,757 produced through 1943.
Toyota Motor Corporation is headquartered in Toyota City, Aichi and in Tokyo. Its Tokyo
head office is located at 1-4-18 Koraku, Bunkyo-ku, Tokyo 112-8701, Japan. Nagoya
Office at 4-7-1 Meieki, Nakamura-ku, Nagoya City, Aichi Prefecture. In addition to
manufacturing automobiles, Toyota provides financial services through its Toyota
Financial Services division and also builds robots.
The 1960s
Toyota returned with the Corona in 1964. Its name meant "crown." It featured a 90horsepower engine capable of a comfortable speed on American roads of up to 90 mph.
It sold for $2,000. Sales began modestly at 6,400 in 1965, but skyrocketed to 71,000 in
1968, and then an astounding 300,000 for the 1971 model year.

The 1970s
For all of its success, Toyota was still a niche car siphoning sales from the giant
importer Volkswagen. The muscle car wars were in full swing and unbridled horsepower
was the name of the game. But the 1973 oil embargo and 1978 fuel shortages changed
the automotive landscape forever. Toyota was poised to capitalize on the American car
owner's hunger for a well-built, fuel-efficient car. Toyota obliged with its new Corona, the
Corolla and the Celica.

Today

Toyota entered the luxury car field in 1989 with its Lexus line.
By the 1980s, Toyota had a secure hold on the North American import market. The
automaker recognized the Lincoln and Cadillac had lost prestige due to fuel-economy
concerns and downsizing. Toyota exploited the weakness by introducing the luxury
Lexus in 1989, further eroding Detroit's automotive market share. But the 2008-2009
recession struck Toyota hard, with almost $8 billion in losses expected for 2009. Total
car sales were expected to drop from 6.5 million to 4.9 million at the end of the fiscal
year in March 2010.

INTRODUCTION TO TQM:
"TQM is a management approach of an organization, centered on quality, based on the
participation of all its members and aiming at long-term success through customer
satisfaction, and benefits to all members of the organization and to society."

In Japanese, TQM comprises four process steps, namely:

1. Kaizen Focuses on Continuous Process Improvement, to make processes visible,
repeatable and measureable.
2. Atarimae Hinshitsu Focuses on intangible effects on processes and ways to
optimize and reduce their effects.
3. Kansei Examining the way the user applies the product leads to improvement in the
product itself.
4. Miryokuteki Hinshitsu Broadens management concern beyond the immediate
product.
TQM requires that the company maintain this quality standard in all aspects of its
business. This requires ensuring that things are done right the first time and that defects
and waste are eliminated from operations.

Origins
Although W. Edwards Deming is largely credited with igniting the quality revolution in
Japan starting in 1946 and trying to bring it to the United States in the 1980s, Armand V.
Feigenbaum was developing a similar set of principles at General Electric in the United
States at around the same time. "Total Quality Control" was the key concept of

Feigenbaum's 1951 book, Quality Control: Principles, Practice, and Administration, a

book that was subsequently released in 1961 under the title, Total Quality Control (ISBN
0-07-020353-9). Joseph Juran, Philip B. Crosby, and Kaoru Ishikawa also contributed to
the
body
of
knowledge
now
known
as
TQM.
The American Society for Quality says that the term Total Quality Management was first
used by the U.S. Naval Air Systems Command "to describe its Japanese-style
management approach to quality improvement. This is consistent with the story that the
United States Department of the Navy Personnel Research and Development Center
began researching the use of statistical process control (SPC); the work of Juran,
Crosby, and Ishikawa; and the philosophy of Deming to make performance
improvements in 1984. This approach was first tested at the North Island Naval Aviation
Depot.
In his paper, "The Making of TQM: History and Margins of the Hi(gh)-Story" from 1994,
Xu claims that "Total Quality Control" is translated incorrectly from Japanese since there
is no difference between the words "control" and "management" in Japanese. William
Golimski refers to Koji Kobayashi, former CEO of NEC, being the first to use TQM,
which he did during a speech when he got the Deming prize in 1974.

The History of TQM

Originally what got TQM started was TPM "Total Productive Maintenance". It was
invented by Toyota, not by W. Edwards Deming or by the U.S. Navy as many people
think. In fact, Deming strongly disliked the TQM term that later was attached to his
teachings by other people.
Deming's central thesis was that even though mass-produced items are supposed to be
identical, in practice they will always vary from one another. Therefore, the industrial
process should include a cycle for observing these variations and changing the process
in order to reduce them. He called this cycle the "Shewhart Cycle" and it came to be
known as Plan-Do-Check-Act (PDCA)--the "act" part of the cycle being where the
process is changed to reflect quality checks..

TQM in TMC:

Toyota introduced Total Quality Management (TQM) as long ago as 1961 and was the
first to introduce Kaizen (lit. improvement) to represent the concept of continuous
improvement. Toyota Motor Corporation uses total quality management, with a specific
focus on the Toyota Production System and the three main tools by which Toyota Motor
Corporation manages total quality management. These concepts and the associated
culture are practiced in every aspect of Toyotas operations, including information
systems.
Toyota invented the concept of Just in Time in 1938 (often described as Just in time,
stop the line). The objective was not simply to reduce inventory, as is often thought, but
to avoid building up too much stock with defects which would have to be written off or
corrected.

Just in Time and this culture of quality evolved into the Toyota Production System and
its more generic equivalent, Lean Manufacturing, which is the benchmark for
manufacturing organisations across the globe.

How toyota implemented TQM:

The most important of these efforts are what took place at Toyota in the late 1960s. At
that time Toyota, a truck manufacturer, decided to begin producing passenger cars and
they made a determined effort to appraise and improve their methods at a fundamental
level. They succeeded phenomenonally at this and by 1980 were producing the highest
quality automobiles in the world. They called their new methods "Total Productive
Maintenance".
What Toyota discovered was that the dominant cause of product defects was wear in
the machines that made the parts. In turn this wear was caused by the accumulation of
dirt and chips (metal shavings). The problem was that workers followed the basic
American practice which was to operate a machine until it broke and only then call in an
engineer to fix the machine. In some cases they would just throw the machine away and
order a new one from America. This resulted in defective parts as the machine wore
down and lack of productivity while the machine was waiting to be fixed or replaced.
Another complication was that workers tended to move from machine to machine and
often confusion resulted. How could systemic problems like this be fixed?
To solve the problems Toyota completely changed the way it operated its plants. First of
all, they stopped moving workers around as much and assigned workers to have
responsibility over individual machines. The next step was to require workers to keep
special notebooks documenting their machine. Before this was done machines were
more or less black boxes to the workers. The new way required the men to document

not only how the machine operated, but its entire maintenance history and how it
worked internally. Workers started taking apart their machines to learn about them and
document their findings. Instead of hoarding mechanical knowledge in a few absentee
engineers
every
worker
started
to
have
this
kind
of
expertise.
The next step was to tackle the dirt. In the 1965 Toyota's factories looked like American
factories: chips and dirt everywhere. They would change that. Since dirt was
responsible for the wear that was causing defects it would be eliminated. They started
on the outside by creating sweeping and cleaning regimens. Then they started regularly
taking apart their machines to clean them. Finally they put their expertise to work and
started designing special guards and covers to keep dirt and chips out of machines
permanently.
The last step in the equation was systematic preventative maintenance. Part of their
documentation efforts was to carefully study any irregularity in machine operation. For
example, if a machine began to vibrate in the old days they would ignore it until the
machine broke, like Americans. In the new way they would immediately stop any
machine that was vibrating and take apart the machine to discover the cause. Because
they now actually had started to learn how the machines worked internally this was
possible. The worker (NOT an engineer) would then attempt to fix the problem. In some
cases these procedures led Toyota to actually redesign and modify parts inside their
tooling
to
improve
it.
The results of these efforts are well-known: not only did Toyota start making the highest
quality cars in the world but by 1980 they dominated the import market. Today Toyota is
the most profitable car manufacturer in the world by a large margin.

Annual
N
Year
C
Year
C
Year
C
Year
C
Year
C
Year
C
Year
C
Year

Comparisons
Mean
Std.
-6
to
Year
20
-5
to
Year
21
-4
to
Year
25
-3
to
Year
26
-2
to
Year
28
-1
to
Year
28
0
to
Year
28
1
to
Year

of
Inventory/Sales
Deviation
Std.
-5
A
9
.0155
-.0006
.16529
-4
A
9
.0740
-.0604
.16166
-3
A
10
.0073
.0534
.56019
-2
A
11
-.0049
.1169
.37847
-1
A
12
-.0659
-.0100
.25650
0
A
13
-.0117
-.0291
.28026
1
A
13
-.0572
.0311
.34559
2
A
12
.1863

in
Error
.22906
.28828
.23758
.15891
.17301
.17422
.27232
.49144

toyota
Mean
.07635
.03696
.09609
.03528
.07513
.11204
.04791
.07422
.04994
.04847
.04832
.05296
.07553
.06531
.14187

C
28
Year
2
to
Year
C
23
Year
3
to
Year
C 23 .0886 .26837 .05596

-.1237
3
A
.0118
4
A

10
10

.33782
-.0694
.28253
-.0040

.24773
.09648

.06384
.07834
.05891
.03051

Toyota, How Implementations Cost Reductions.

The world of automotive manufacturing in particular is one of the king

of Toyota, where Toyota has a management system that is reliable in managing all
aspects of management, TQM (Total Quality Management) which is a symbol of the
triumph of knowledge management in a very interesting to learn.
Toyota has some of the jargon in it to create a product that is reliable and able to enter
the automotive market worldwide. Some good implementation in Toyotas manufacturing
system is:
1. QCC (Quality Control Cycle)
QCC = Quality Control Cycle is a cycle in which each assembly must prioritize the good
quality of raw material quality, process quality, and human qualities.
With attention to these aspects will be obtained a product which is having a very high
quality where the controlling every aspect mentioned above, will eliminate all products
that are not in accordance with established standards.
2. Zero inventory
QCC = Quality Control Cycle is a cycle in which each assembly must prioritize the good
quality of raw material quality, process quality, and human qualities.
With attention to these aspects will be obtained a product which is having a very high
quality where the controlling every aspect mentioned above, will eliminate all products
that are not in accordance with established standards.

3. Milk Run
Milk Run is a pickup system made by Toyota itself to take their goods to all of Toyotas
suppliers are located near the plant or near their areas, this system does not apply to
part of the supply through the import system.
With the pick up part in all of Toyotas suppliers by using Toyotas own vehicles will save
the transportation costs are usually charged by suppliers to Toyota in delivering parts be
submitted by Toyota.

Conclusion:
Toyota Motor Corporation (Japanese) commonly known simply as Toyota and
abbreviated as TMC, is a multinational automaker headquartered in Toyota, Aichi,
Japan. In 2010, Toyota Motor Corporation employed 317,734 people worldwide . Toyota
has a management system that is reliable in managing all aspects of management,
TQM (Total Quality Management) which is a symbol of the triumph of knowledge
management in a very interesting to learn.

Bibliography:
1.Anon. (1989). AIAA/ADPA/NSIA 1st. National Total Quality Management Symposium,
Denver CO, 1-3 November.
2.Breisch, R. E. (1996). "Are You Listening," Quality Progress, January, pp. 59-62
3.Gevirtz, C. (1994). Developing New Products With TQM, McGraw-Hill, Inc., New York
NY.
4.Gitlow, H. S. and S. J. Gitlow (1987). The Deming Guide to Quality and Competitive
Position, Prentice-Hall Inc., Englewood Cliffs NJ.
5.Aguayo, Rafael (1991). Dr. Deming: The American Who Taught the Japanese About
Quality. Fireside. pp. 4041.
6.Retrivied on June 30,2011. From
www.hbs.edu/research/facpubs/workingpapers/papers2/0102/02-043.doc