Planing:

Planning is the basic management function which deals with forecasting future
course of actionand making a decision on the best alternative for achieving the
organizational goals

Toyota is the third-largest auto manufacturer in the world, behind General Motors
and Ford,with global vehicle sales of over six million per year in 170 countries.
However, Toyota is farmore profitable than any other auto manufacturer. Auto
industry analysts estimate that Toyotawill pass Ford in global vehicles sold in 2005,
and if current trends continue, it will eventuallypass GM to become the largest
automaker in the world.

The incredible consistency of Toyota s performance is a direct result of operational

excellence.Toyota has turned operational excellence into a strategic weapon.
Toyota s continued successat implementing these tools stems from a deeper
business philosophy based on itsunderstanding of people and human motivation.
Its success is ultimately based on its ability tocultivate leadership, teams, and
culture, to devise strategy, to build supplier relationships, andto maintain a
learning organization (Liker, 2004).According to the book wrote by Jeffrey K. Liker,
Ph.D., is Professor of Industrial and OperationsEngineering at the University of
Michigan we can comprehend what have made Toyota success.They have
incredibly applied planning process to their operation step by step. From
settinggoal, develop commitment, develop effective action plan, track progress
toward goalachievement, maintain flexibility.Finally is maintaining flexibility, which
is the key to their operations. They learned fromexperiences and failures and
improve them to satisfy their customers and get the bestproductions.They accept
challenges with a creative spirit and the courage to realize their own
dreamswithout losing drive or energy. They approach their work vigorously, with
optimism and asincere belief in the value of our contribution. Furthermore, they
strive to decide their ownfate. They act with self-reliance, trusting in their own
abilities. They accept responsibility fortheir conduct and for maintaining and
improving the skills that enable them to produce addedvalue. Toyota understands
that in a typical business system, meeting and exceeding the

customer’s requirements is the task of everyone within an organization. And they

comprehended the definition of customer to include both internal and external

customers.Each person or step in a production line or business process was to be
treated as a customerand to be supplied with exactly what was needed, at the
exact time needed.

Understanding

Toyota’s success and quality improvement systems does not automatically mean
you can

transform a company with a different culture and circumstances. Toyota can

provideinspiration, demonstrate the importance of stability in leadership and
values that go beyondshort-term profit, and suggest how the right combination of
philosophy, process, people, andproblem solving can create a learning enterprise.
I believe all manufacturing and servicecompanies that want to be successful in the
long term must become learning enterprises.Toyota is one of the best models in
the world. Though every company must find its own wayand learn for itself,
understanding the Toyota Way can be one giant step on that journey.After
completing second step, they use the method of tracking progress toward
goalachievement to get more motivating and rewarding and then gather and
provide performancefeedback to make adjustment in efforts, direction and
strategy that will lead to dramaticincrease in performance

Organizing:
Toyota historically in Japan in particular is very much anorganization that consists
of highly functional departments. Product development, productionengineering,
purchasing, finance, IT, HR, manufacturing, etc. are in reality functional silos.
Oneof the amazing things about Toyota is how well it manages across these silos
to promoteimprovement and develop people. In most companies I realize this is
not the case and hence inall likelihood the question (solution) posed this month.
Maybe a reorganization of the companyinto a more horizontal type is a good
solution. However again without thorough knowledge ofthe problem, the goal,
and causes, etc.

I don’t feel comfortable in automatically

advocating thistype of change.Part of the background confusion on this topic I

think stems from the best selling workbook

“Learning To See” drafted by my colleagues Mike Rother and John Shook for the
Lean

Enterprise Institute. In the United States at least Jim Womack for the better part
of the pastdecade has lectured companies on the need to reorganize their
thinking patterns and act in amore customer focused fashion. The proffered
advice is normally to appoint

“value streammanagers” across the organization who align more with product
flow and better customer
focus. Many companies take this step even further and break down functional
departmentsinto horizontal cross functional value stream teams (product and/or
customer focused). Thereare indeed benefits to this approach however there are
also pitfalls as well. I will try andelaborate on this dilemma in further detail.The
concept of the value stream manager has some roots in the technique Toyota
applies toanalyze lead-time and product flow from raw materials to finished goods
to customer deliveryacross an organization. Toyota internally calls this material
and information flow analysis. Inmost countries it goes by the sub-

title of the LEI workbook “Value Stream Mapping”. Theconcept also has some very
loose roots in the concept of a “chief engineer” in Toyota who with

a very small team has broad powers and works across the functional silos of
productdevelopment inside of Toyota.However it is critical to note that while
Toyota has techniques like value stream mapping whichcan be applied in a
horizontal fashion and a chief engineer (only in product development by theway)
who is charged with working across the organization in a horizontal way the
companyitself is not organized in a horizontal fashion at all. The legendary Kamigo
plant that I worked inhas been functionally aligned since the founding days under
Taiichi Ohno. Casting has a castingmanager with multiple products produced.
Machining and engine assembly have functionalmanagers with multiple types of
products produced. The same is true of the vehicle plants withmanagers for
stamping, welding, painting, plastic injection molding, and assembly, etc. Untilyou
reach the level of plant manager there is arguably no one with control from raw
materials

to finished goods in any given facility. Small exceptions exist to this reality but
thisorganizational design is the general rule for the major plants and the rest of

the company.

Leadership:
Directing or leadership is a management function which deals with development
of effectiveworking methods to ensure organizational purposes are met (Singh,
2012). It directly deals withinfluencing, motivating, and guiding the subordinates
towards achievement of theorganizational goals. It is the duty of the manager to
lead or direct employees in theorganization and ensure that they are doing the
right job. The overall function of theorganization is to supervise and give the
necessary guidelines to attain the intended objectiveseasily. Management should
lead in a reasonable manner with realistic expectations from itsemployees. This
will always ensure that there is activity among employees and is beneficial tothe
organization as it does add value.Toyota Corporation is one of the best managed
companies in the world. The company has astrong leadership structure involving
family members of the company`s founder. The currentCEO of Toyota Mr. Akio
Toyoda is the grandson of the founder. The company`s top managersare highly
competent and committed to towards attainment of organizational goals
(McDonald,2010). Teamwork is encouraged across all hierarchical levels and all
members of staff are givenan opportunity to participate in decision-making.
Creativity and innovation is highly encouragedamong the employees in order to
give the firm a continuous competitive advantage. Customersare highly valued by
the company and the main focus is to provide the best services to thecustomers.
This has enabled Toyota to developed customer loyalty leading to a strong
brandname. Toyota also enjoys a good relationship with other external
stakeholders such as variousgovernments, the local community, and the
shareholders. This has contributed to theestablishment of a strong corporate
brand that is recognized in all parts of the world.Toyota has a relatively flat org
structure.

The Toyota philosophy is to disperse responsibility tothe lowest level possible.

Often companies focus on developing leadership “duties” or“responsibilities”

rather than expectations. This is similar to attempts to implement lean tools

rather than lean philosophies.Team and group leaders have three basic
responsibilities:1. Support for operations

2. Promotion of the system3. Leading change

A Leader’s effectiveness is based on four key performance results:

1. Safety, including ergonomics, reduction of injuries, and improving work-place

design.2. Quality, including training, process improvement and problem solving.3.
Productivity, which encompasses consistently satisfying the customer demand and
managingresources.4.Cost, which means satisfying the three other criteria while
controlling and reducing totalcost.

Toyota uses an “inverted pyramid” model for leadership, where the leaders of the
organization

are pictured at the bottom to support the majority of the organization (versus the
traditionaltop/down chart)Production Employees are assigned to groups of 20-
30.Group Leader is responsible for one ofthese groups. Typically has the greatest
number of direct reports. Group Leader is consideredthe first level of
management. Team Leader

within the group are smaller teams, generally 5-7people. Each of these teams
have a Team Leader. The Team Leader reports to the GroupLeader. Team & Group
Leaders have direct responsibility for all production-related activities inthe
plant.Assistant Managers

responsible for 4-6 Group Leaders. They have direct responsibility forproduction
activities. Spends much of their time on the floor. Large issues: major failures
orshortage to customer. General Manager

has responsibility for “functional area” (all vehicle

production, engine plant, staff functions, etc). The number of Assistant Managers
reporting tothem varies according to the function. Not involved in daily activities,
but encouraged to prowlthe floor looking for opportunities to teach and
coach.Vice presidents and one president.

Office and engineering position structure is similar to production structure, except

there areusually no group or team leaders. Assistant Staff and Associated Staff
have responsibility fornon-technical jobs. Specialist is a title used for more
technical jobs including: productionengineering, facilities maintenance, safety,
environmental, accounting, and humanresources.Small teams of Assistant Staff
and Specialists report to an Assistant Manager andseveral Assistant Managers
report to a Departmental Manager. Some departments with a lotof technical
support may have a separate manager for staff employees

Controlling:
possible correctivemeasures if necessary. The main purpose of controlling is to
ensure that business operationsconform to the organizational standards (Carroll &
Gillen, 1987). An effective control systemshould be able to detect any possible
deviation before it occurs. The process of controllinginvolves establishing of the
performance standards, measuring of the actual performance,comparing of the
actual performance with the set standards to determine if there is anydeviation,
and finally taking a corrective action.Toyota closely monitors its operations and
evaluates its performance against organizationaltargets. The company has clearly
set targets which guide its operations at all levels of theorganization. Auditing is
normally carried out on a regular basis to ensure that the organizationis moving in
the right direction. Any deviation from the set standards is adjusted
throughappropriate corrective measures. This can be clearly seen in the way
Toyota handled anaccelerator crisis. Immediately the accelerator failure problem
was reported by the customersafter an accident, Toyota recalled its vehicles from
the market and launched an investigation tofind out the cause (McDonald, 2010).
The problem was identified and corrected immediatelysaving the reputation of
the company.Management controlling the operations of the organization provides
a platform on where theycan gauge and determine what needs to be adjusted to
make its processes efficient and easytowards attaining the greater goal (Singh,
2012). Management needs to see that every thingaligns with the policies and
practice of the organization. Th

e organization’s blue print is a vital

aspect as all factors have been to consideration and what is supposed to be done
is alreadyknown. Using it as a reference point the management can be able to
control all activitiesinvolved in the organization.

14

Toyota is a well known Japanese car manufacturer, well known for its quality, until
relativelyrecently. Toyota has been in the news recently for quality problems.It has
recalled millions of 2009-2010 Corollas, Camrys, Avalons, and more recently, even
PriusesFor this case study, we will read two articles about Toyota and analyze how
its growth, with noapparent controls (such as structures, and implicitly strong
quality controls0) may have lead toquality problems (among others).But this case
illustrates the importance of the controllingfunction. Please read the following
articles about Toyota cost-cutting and the interview withthe CEO (few years
back).Solution Expectations Write a detailed Solution that answers thequestions
with the information provided. Has controlling and cost-cutting contributed to
Toyotarecent massive recalls? Required Readings Katsuaki Watanabe made his
name at the companywith a cost-reduction program. As the new president, he's
not about to slow down nowIf Toyota Motor's recent growth is any guide, it seems
more a question of when rather than ifthe Japanese giant will overtake General
Motors to become the world's No. 1 car producer. It'seasy to see why. Next year,
Toyota (TM ) is expected to sell some 8.5 million vehicles -- just400,000 fewer than
GM's (GM ) projected sales.Meanwhile, industry-busting earnings -- $10.7 billion
in the year through March, 2005 -- arebeing reinvested in new production facilities
the world over. Toyota's newest factories are insuch far-flung places as the Czech
Republic, China, and Texas, while further expansion isplanned in Russia, Thailand,
and Canada.Yet for Katsuaki Watanabe, who succeeded Fujio Cho as president of
Toyota on June 23, qualityimprovements and cost cutting are more immediate
goals than ramping up output. Indeed,Watanabe, 63, recently claimed that
despite some suggestions that Toyota could overtake GMas early as 2008, he
doesn't expect Toyota to outstrip GM's sales during his tenure.