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Case Study
I will
cite a couple of instances now. All are from India.
Total Quality Management (TQM) would not be what it is today without Toyota Motors.
Renowned for its lean production system, Toyota Motors is the tenth most important company in the
world according to Fortune Global 500 and one of the only companies on the list to directly address TQM.
Graphs, extensive timelines and reports line the company’s website to address the evolution of TQM and
Quality Control (QC) throughout its 75-year history.
Toyota Motors Co., Ltd. has received various prestigious awards for quality management, including the
Deming Application Prize in 1965 and the Japan Quality Control Award in 1970.
For Toyota, TQM is based on the concept of “customer first”, kaizen meaning continuous improvement
and “total participation” which means the involvement and input of all employees. In 1951, Toyota
launched the Creative Idea Suggestion System to support and encourage employees in making effective
contributions to the company’s development. Toyota introduced Statistical Quality Control (SQC) in 1949.
The company also makes great efforts to give back with community-based projects and environmental
initiatives.
These concepts are at the core of Toyota’s Production System (TPS), and have led to higher quality of
products and work, and improvement in all aspects of the organization, from individuals to services.
The Industrial Revolution marked a turning-point in the manufacturing industry with the introduction of
assembly-lines and mass production. It marked a time of innovation and Japan wanted to compete – so it
“put the call out for inventors”. Another turning-point in TQM was during the Second World War. Weapon-
manufacturing, especially in the U.S., required the optimization of manufacturing machinery, goods and
statistical methods to keep track of production. Although the U.S. took part in the development of Quality
Control methods, industrial engineers and statisticians who wanted to implement new techniques were
often overlooked because Quality was associated with a greater effort and restrictive regulations.
Japan’s economy was in need of total economic rebuilding, so they invited Statisticians and Quality
Managers such as Edward Deming and Malcolm Badridge to help reshape the economy. Toyota was one
of the first to implement Quality Control in the 1940’s and 1950’s. Toyota’s current method known as
Toyota’s Production System, aka “lean production”, owes itself to the work of Edward Deming and is
today a reference point for Quality Management worldwide. Along with core principles such as “Customer
First” and “kaizen”, Toyota boasts many management tools such as its 8 Step Practical Problem Solving
method, PDCA, A3 Reporting and 5S.
The company established The Toyota Way, a set of business principles, in 2001. It is based on kaizen —
continuous improvement — and strives to eliminate waste and overproduction, as well as to create a
bureaucratic system where any employee can suggest a change where they see fit. There is a high value
on human participation. There is constant encouragement for further innovation, consensus and ideas for
improvement. The Toyota Way also focuses on long-term improvements rather than short-term. The two
main pillars of the Toyota Way are ‘Customer First’ and ‘Respect for people’.
Toyota Motors has a world-wide reputation for efficient and lean manufacturing,
called TPS (Toyota Production System).
This video, produced by Toyota Europe, explains the history of TPS as well as its
significance today.
TPS is based on five principles:
1. Always be faithful to your duties, thereby contributing to the Company and to the overall good.
2. Always be studious and creative, striving to stay ahead of the times.
3. Always be practical and avoid frivolousness.
4. Always strive to build a homelike atmosphere at work that is warm and friendly.
5. Always have respect for spiritual matters, and remember to be grateful at all times.
Toyota’s website states:
The “Five Main Principles of Toyoda” are a written statement of the teaching of Sakichi
Toyoda collected and arranged by Risaburo Toyoda and Kiichiro Toyoda. The Principles
were first released on October 30, 1935, the fifth anniversary of Sakichi’s death. Since
then, Five Main Principles of Toyoda have been handed down to every Toyota Group
company and serve as conduct guidelines for all employees.
The aim of TQM is to obtain zero defects. The larger the company, however, the more
difficult it is to pin-point glitches in the production system. Why is it, then, that the
overriding lower-level employees have the least say in the company’s management,
when they’re the most likely to spot a problem?
Here’s how Toyota empowers lower-level management every day.
Core principles: ‘Total Participation’ & ‘Employee Engagement’
In 1951, Toyota launched the Creative Idea Suggestion System to support and increase
suggestions as well as effective contributions to the company’s development. The
suggestion system encourages flexible responses to change and ecompasses the
principle of monozukuri, meaning conscientious manufacturing.
Shortly after the company introduced the Creative Idea Suggestion System in 1951,
Toyota then established the Individual Annual Award to honor excellent suggestions
system, which remains today. Recognizing excellence for creativity for an employee not
only motivates them to think outside the box, but also to lose the fear to propose a new
idea.
In 1974, the award system was broken into Gold, Silver and Bronze medals. And in 1974,
the number of creative ideas proposed reached one million. Toyota’s creative idea award
system is an excellent example of employee motivation and encouragement.
One of the focus areas in TQM is on utilizing the knowledge of lower-level employees
who are the most involved in day-to-day operations. Their knowledge is often
overlooked, even though they are the employees that have the closest relationship with
the majority of the manufacturing process. Hence, when there is the slightest problem
or room for improvement, it is the lower-level employees that are the most likely to spot
it.
The Suggestion Idea Program gives these employees a chance to present their
ideas without fear and have them considered by the upper management team who can
assess it and carry it out successfully.
Over the years, Toyota has continued to make advancements in TQM through employee
training in QC, target-setting and even TQM employee networks. As of 2011, the total
number of suggest ideas hit 40 million.
Toyota has known the secret to quality since the 1930’s. It all lies in the customer.
Over its 75-year history, Toyota has strived to listen to the voice of the customer in all
areas of its production system. Here’s how.
Quality Assurance Activities
For Toyota Motors, Quality Assurance Activities are based on the core principles of
“Customer First “ and “Quality First”. These principles have remained at the foundation
of the company’s vision since it first established the Audit and Improvement Division in
1937 and its first Audit and Improvement Committee in 1943.
With continuous activity in quality assurance along the way, in 2005 Toyota established
the Customer Quality Engineering Division which consists of a global problem
registration system from the customer’s point of view.
In the same year, they also established the Customer First (CF) Committee, to ensure
the integration of the CF principle into the entire company. What’s more, in 2010, the
company established the Special Committee for Global Quality to review all company-
wide operations and strengthen the CF principle even further .
All in all, one can see that continuous improvement in Quality Assurance is at the forefront
of the company’s organization worldwide, and as they say, “from the shop floor to the
executive management.”
Customer Relations Activities
The CF principle is at the foundation of Toyota’s history of Customer Relations
Activities as well. The Toyota Motor Corporations we know today owes its Customer
Relations Division to the unification of Toyota Motor CO., Ltd. and Toyota Motor Sales
Co., ltd. in 1982. The entire company has its focus set on the “Voice of the customer” in
an aim to continually enhance customer satisfaction and the quality of its products.
For example, the Customer Service Telephone line was made toll-free in 1990. They
have “Customer Month” in which the company holds even more customer satisfaction
events, seminars and reviews. They even publish Customer Satisfaction news available to
the public.
In short, the company has an impressive customer satisfaction and improvement plan
that targets several areas and is incorporated into their production system.
Owing its name to the size of paper, A3 thinking is used to make a report in just one
sheet of paper.
Founded by Toyota Motor’s lean manufacturing philosophy, which is known for
trimming off excess waste and continuously improving, A3 Thinking is a highly
acclaimed tool throughout businesses, quality institutes and academia worldwide.
A3 reports are concise and simple, and encompass the PDCA improvement cycle and
Toyota’s problem-solving method.
Also known as the Deming Cycle after its founder, Edward Deming, PDCA stands for
plan, do, check and act. It is one of the most important pinciples used by businesses
today to control and manage the implementation of a new process.
Plan consists of setting objectives, assessing short-term vs. long-term solutions, as well as assigning tasks
and “task-owners”
Do constitutes the exection of the plan
Check means analyze the results
Act implies addressing the successful improvement areas and finding ways to implement them
When it comes to Toyota’s 8-step problem-solving process, steps can be broken down into
the PDCA phases as well.
Plan:
1. Clarify the problem
2. Break down the problem
3. Set a target
4. Analyze the root cause
Do:
5. Develop countermeasures
6. Implement countermeasures
Check:
7. Evaluate results and processes
Act:
8. Standardize successful improvements
http://blog.bid-org.com/toyota-production-system-tps/
https://www.quora.com/What-are-some-real-life-examples-of-total-quality-management-TQM-in-practice