Total Quality

Management of Toyota
Industries
[Document subtitle]

Group - Curveball
MGT330 |  Section - 02
 Independent University, Bangladesh
Introduction to Production and Operation Management 
MGT330

Section- 02

Submitted to - Mr. Dr. Md. Kharshiduzzaman 

Submitted by - Group Curveball

Group Members
Labiba Anjumi Kabir - 1910042
Tahmid Bin Zaman - 1910097
Tunaj Tajrin - 1911015
Humaira Afrin - 1920647

Date of Submission- 2nd September, 2021.

 Letter of Transmittal

To,

Mr. Dr. Md. Kharshiduzzaman,

Independent University, Bangladesh,

Dhaka, Bangladesh.

Date: 2nd September, 2021.

Subject: Report submission on Total Quality Management of Toyota Motor Corporation. 

Sir,

With due respect, it is our pleasure and honor to be your students and have the opportunity to
present the total quality management report on Toyota Industries Corporation. While
preparing the report, we have given our best to analyze and exhibit the management strategies
of one of the leading automobile industries. We have given our best to provide a thorough
analysis regarding the matter to portrait the situation. We believe we have provided adequate
information on our observations and suggestions about Toyota Industries Corporation in the
report. 

We did our best to accumulate the required information and we will be more than happy to
answer any queries and clarify them to your full understanding. Thank you for all your help
and support in preparing this report.

Sincerely, 
Group Curveball.
 Acknowledgment

With great pleasure and honor, we want to express our heartiest gratitude and obligation to
our course instructor Mr. Dr. Md. Kharshiduzzaman sir. His valuable guidance and advice
have inspired us greatly to work on this project. His willingness to help and support us
throughout the project has motivated us to contribute to the project to our fullest.

We would like to thank the authority of Independent University, Bangladesh for providing us
with the tools and facilities to complete this project. 

Lastly, we are grateful to those who have directly and indirectly contributed to the
preparation of this project, especially our group members and our peers who helped us along.
 Table of Contents

Letter of Transmittal 2
Acknowledgment 3
Executive Summary  5
Company Profile 5
Case on Toyota's JIT Revolution 7
Total Quality Management Analysis of Toyota 14
Customer satisfaction 15
Employee Involvement 17
Continuous improvement 18
Conclusion 21
Reference 21
Executive Summary 

Total Quality Management (TQM) is a management approach that essentially deals with
long-term business goals. It’s a method of achieving a high level of process performance and
quality in operations and improving the capabilities of the business procedures.

Total Quality Management ultimately leads to a decline in defects, maximization of quality,

not profit, customer satisfaction, high employee self-esteem, and high quality of services or
products. TQM accelerates the process of minimizing mistakes and reduction of
unpredictability to ensure top quality at an affordable rate. The emphasis is focused on
ensuring the best quality of the process.

In this paper, we analyzed the Total Quality Management of Toyota Motor Corporation and
how the implementation of TQM gives Toyota the upper hand at producing world-class
automobiles without compromising quality. Toyota’s quality management system is
unmatched as they are more efficient and productive in comparison to any other automobile
company in the industry. In fact, Toyota’s TQM is considered as the benchmark for
manufacturing and product development by rival companies. Through this paper, we
analyzed Toyota’s journey to set global precedence through the implementation of key
aspects of ensuring highest quality of their parts initially to drive down their costs and
become a more approachable and affordable car company compared to their rivals.

Company Profile

Toyota Motor Corporation is a Japanese worldwide car maker settled in Toyota City, Aichi,
Japan. It was established by Kiichiro Toyoda and joined on August 28, 1937. Toyota is one
of the biggest automakers on the planet, creating around 10 million vehicles each year. The
organization was as a side project of Toyota Industries, a machine producer begun by Sakichi
Toyoda, Kiichiro's dad. The two organizations are presently important for the Toyota Group,
probably the biggest conglomerate on the planet. While still a branch of Toyota Industries,
the organization fostered its first item, the Type A motor in 1934 and its first traveler vehicle
in 1936, the Toyota AA.
After World War II, Toyota profited from Japan's partnership with the United States to gain
from American automakers and different organizations, which would bring about The Toyota
Way (an administration reasoning) and the Toyota Production System (a lean assembling
practice) that would change the little organization into an innovator in the business and would
be the subject of numerous scholastic investigations.

During the 1960s, Toyota exploited a quickly developing Japanese economy to offer vehicles
to a developing working class, prompting the improvement of the Toyota Corolla, which
would proceed to turn into the world's untouched top rated car. The roaring economy
additionally supported a worldwide extension that would permit Toyota to develop into
perhaps the biggest automaker on the planet, the biggest organization in Japan, and the 10th
biggest organization on the planet by income, as of December 2020. Toyota was the world's
first automaker to deliver more than 10 million vehicles each year, a record set in 2012 when
it likewise detailed the creation of its 200 millionth vehicle. Toyota was adulated for being
an innovator in the turn of events and deals of more eco-friendly crossbreed electric vehicles,
beginning with the presentation of the Toyota Prius in 1997. The organization currently sells
more than 40 half-breed vehicle models throughout the planet. Notwithstanding, more as of
late, the organization has additionally been blamed for greenwashing for its doubt of every
electric vehicle and its attention on the improvement of hydrogen energy component vehicles,
similar to the Toyota Mirai, an innovation that is costlier and has fallen a long ways behind
electric batteries.

Toyota Motor Corporation produces vehicles under five brands: Daihatsu, Hino, Lexus,
Ranz, and the namesake Toyota. The organization additionally holds a 20% stake in Subaru
Corporation, a 5.1% stake in Mazda, a 4.9% stake in Suzuki, a 4.6% stake in Isuzu, a 3.8%
stake in Yamaha Motor Corporation, and a 2.8% stake in Panasonic, just as stakes in-vehicle
fabricating joint-adventures in China (GAC Toyota and FAW Toyota), the Czech Republic
(TPCA), India (Toyota Kirloskar) and the United States (MTMUS). Toyota is listed on the
London Stock Exchange, Nagoya Stock Exchange, New York Stock Exchange, and on the
Tokyo Stock Exchange, where its stock is a part of the Nikkei 225 and TOPIX Core30 files.
Case on Toyota's JIT Revolution

In the mid-1990s, more than fifty executives and engineers from major automobile
companies worldwide visited Toyota Motor Company's manufacturing complex at
Georgetown, US, to study the Toyota Production System (TPS). The visit also included an
intensive question and answer session. Even though the visitors were from competing
automakers, including Ford and Chrysler, Toyota did not deny them access to the plant.

The TPS aimed to produce world-class, quality automobiles at competitive prices. It was built
on two main principles, Just-in-Time (JIT) production, and Jidoka. JIT was used not only in
manufacturing but also in product development, supplier relations, and distribution. Analysts
remarked that despite imitating Toyota's JIT for many years, no other automaker in the world
had been able to make their production systems and processes as efficient as Toyota had
done. Analysts felt that though other leading automakers like Mercedes-Benz, Honda, and
DaimlerChrysler excelled in advanced engineering techniques, engine technology, and
styling, they did not match Toyota in efficiency, productivity, and quality.

Executives of rival companies also appreciated Toyota's manufacturing and product

development systems. Officials at GM commented, "Toyota is the benchmark in
manufacturing and product development." A top executive at Ford said, "Toyota is so far
ahead in developing markets that the real race is for second place." Some executives at BMW
also considered Toyota the best car company in the world.

The early adoption of JIT principles by Toyota seemed to have helped the company achieve
significant success. It helped the company respond quickly to changing customer needs and
offer high-quality products at low costs, thus increasing customer satisfaction.

Toyota's history goes back to 1897 when Sakichi Toyoda (Sakichi) diversified into the
handloom machinery business from his family's traditional business of carpentry. He founded
Toyoda Automatic Loom Works (TALW) in 1926 for manufacturing automatic looms.
Sakichi invented a loom that stopped automatically when any of the threads snapped. This
concept of designing equipment to stop so that defects could be fixed immediately formed the
basis of the Toyota Production System (TPS) that went on to become a major factor in the
company's success.
In 1933, Sakichi established an automobile department within TALW and the first passenger
car prototype was developed in 1935. Sakichi's son Kiichiro Toyoda (Kiichiro) convinced
him to enter the automobile business. After this, the production of Model AA began and
Toyota Motor Corporation was established in 1937. Kiichiro visited the Ford Motor
Company in Detroit to study the US automotive industry. He saw that an average US
worker's production was nine times that of a Japanese worker. He realized that the
productivity of the Japanese automobile industry had to be increased if it were to compete
globally.

Back in Japan, he customized the Ford production system to suit the Japanese market. He
also devised a system wherein each process in the assembly line of production would produce
only the number of parts needed at the next step on the production line, which made logistics
management easier as the material was procured according to consumption. This system was
referred to as Just-in-Time (JIT) within the Toyota Group.

The JIT production was defined as 'producing only necessary units in a necessary quantity at
a necessary time resulting in decreased excess inventories and excess workforce, thereby
increasing productivity.' Kiichiro realized that by relying solely on the central planning
approach, it would be very difficult to implement JIT in all the processes for an automobile.
Hence, TPS followed the production flow conversely. People working in one process went to
the preceding one to withdraw the necessary units in the necessary quantities at the necessary
time. This resulted in the preceding process producing only quantities of units to replace
those that had been withdrawn.

Toyota flourished during the Second World War by selling trucks and buses to the army and
the company launched its first small car (SA Model) in 1947. After the war, the company
faced a series of financial problems. A financial support package from a consortium of banks
(after the intervention of the Bank of Japan) helped Toyota tide over its problems. The
package consisted of a series of steps that included downsizing and restructuring the
company into separate manufacturing and sales divisions. As per the revival package, The
Toyota Motor Sales Company Ltd. was formed in 1950. In the same year, Kiichiro resigned.

By 1952, Toyota made a turnaround and in 1953, the company appointed distributors in El
Salvador and Saudi Arabia and started exports. Meanwhile, Taiichi Ohno (Ohno) took charge
of the company. In 1957, Toyota entered the US market through its subsidiary, Toyota Motor
Sales, USA. In 1959, the company began its first overseas production in Brazil and over the
next few years, developed a vast network of overseas plants. Besides manufacturing, Toyota
started a global network of design and Research and Development facilities covering the
three major car markets of Japan, North America, and Europe.

By the early 1970s, Toyota's sales exceeded that of Chrysler and Volkswagen and its
production was behind that of only General Motors (GM) and Ford. Toyota continued its
efforts to make its production system more efficient and also developed flexible
manufacturing systems. It also began to tap the markets in the Middle East and by 1974 the
Toyota Corolla, (launched in 1965) became the largest selling car in the world. In 1984,
Toyota entered into a joint venture with GM and established the New United Motor
Manufacturing Inc. (NUMMI).

By the early 1990s, as Toyota expanded its overseas operations, the excessive capital
spending affected its profit margins. Tatsuro Toyoda (Tatsuro), who took over as the
company President in 1992, began to control costs by eliminating all unnecessary
expenditures. In 1995, after Tatsuro resigned due to health reasons, Hiroshi Okuda (Okuda)
became Toyota’s president. In 1996, Toyota consolidated its production in North American
production units into the Cincinnati-based Toyota Motor Manufacturing (North America).

In 1999, Okuda replaced chairman Shoichiro Toyoda and Fujio Cho (Cho) became the
president. In the same year, Toyota listed its shares on both the New York and London stock
exchanges. By the end of 2001, the company's net income had reached $5,447 million and net
revenue reached $106,030 million (Refer Exhibit I for the company's financial performance
over the years).

According to analysts, Toyota's success in both the local and global markets was mainly
because of its state-of-the-art and well-planned operational strategies. The company had
continuously focused on gaining a competitive advantage through the implementation of
innovative and path-breaking ideas on its production floors. TPS worked on the basic idea of
maintaining a continuous flow of products in factories to flexibly adapt to demand changes.
The most important feature of TPS was the way it linked all production activities to real
dealer demand through the implementation of Kanban, JIT, and other quality measures that
enabled Toyota to manufacture in low quantities.
In the early 1930s, the technology used by American automobile companies was superior to
that used by Japanese companies. Kiichiro, therefore, decided to learn new automobile
production techniques from American manufacturers. He soon realized that to catch up with
the Americans, he had to master basic production techniques. He then reorganized the
production system in Toyota in a unique way. This reorganization eventually led to the
development of the JIT concept.

In the early 1970s, Taiichi Ohno (Ohno)3 implemented JIT in Toyota's manufacturing plants.
The JIT system was aimed at avoiding waste, reducing inventories, and increasing production
efficiency to maintain Toyota's competitive edge. Ohno also believed that customers should
receive high-quality products in the shortest time. Initially, JIT was used as a method for
reducing inventories in Toyota's shipyards, but later it evolved into a management philosophy
including a set of techniques (Refer Exhibit II for a comparison between JIT and non-JIT
systems).

Kanban4 was an essential component of Toyota's JIT concept. The Japanese referred to
Kanban as a simple parts-movement system that depended on cards and boxes/containers to
take parts from one workstation to another on a production line. Ohno had developed the idea
in 1956 from the supermarkets in the US, which had devised an effective system for
replenishment of store shelves based on the quantities picked by the customers. Initially,
Ohno used pieces of paper contained in rectangular vinyl envelopes to convey information
(called Kanban). In a period spanning three decades, Kanban developed into a sophisticated
information system that ensured production in required quantities at the right time in all
manufacturing processes within the factory.

The essence of the Kanban concept was that a supplier delivered components to the
production line only when required, thus eliminating storage in the production area. Suppliers
delivered desired components when they received a card and an empty container, indicating
that more parts were needed for production. In case of line interruption, each supplier
produced only enough components to fill the container and then stopped. Since Kanban was a
chain process in which orders flowed from one process to another, the production or delivery
of components was 'pulled' to the production line (Refer Box).

In a pull system, the production of a certain product starts only when demand or request is
made by the buyer. The consumer of the product 'pulls' from the last link of the production
chain. This last link pulls its preceding link and so on. In western companies, the push system
was considered to be more cost-effective. Push systems were schedule-based projections of
what demand was expected to be. Based on historical information (updated on a weekly or
monthly basis), a computer program processed the information giving a detailed sub-schedule
for buying materials and producing goods. This schedule pushed the production to comply
with the expected demand. The disadvantage of the push system was that predictions did not
always coincide with facts. This resulted in either excess or inadequate inventories.

In the traditional forecast-oriented method, parts were 'pushed' to the line (Refer to Exhibit III
for a comparison of the Kanban philosophy with the western philosophy).

At Toyota, two types of Kanban cards were used: one, to move parts from one place to
another, known as the Conveyance Kanban card, and the other, to authorize the production of
parts, known as the Production Kanban card. (Refer to Figure I). A standard size container
was used to store parts and each card was treated like a coupon. (Refer Box).

Suppose a container of item X is required in work center A. As a first step, a production

Kanban card is issued to work center A. The work center withdraws a container of raw
materials from its inventory. The container of raw materials also included a conveyance
Kanban card. Work center A removes the conveyance Kanban card from the container and
sends it to the proceeding work center where it serves as an authorization to pick up a
container of raw materials.

Three types of information were exchanged using Kanban. Pick-up information guided the
earlier stages regarding parts to be produced for the succeeding stages. Transfer information
indicated when the parts had to be produced for the succeeding stages. Production
information was transmitted from the earlier stages to the later stages to inform the workers
about the product mix and other operational matters.

To make the Kanban system effective and reap maximum benefits (Refer Table II) from it,
Ohno framed six rules:

• Later process went to the earlier process to pick up products.

• The earlier process produced only the amount withdrawn by the later process.
• Should not pick or produce goods without a Kanban. • A Kanban should be attached to the
goods.

• 100% defect-free parts were required.

• Reduce the number of Kanbans.

Table II Advantages of Kanban

1. A simple and understandable process 2. Provides quick and precise information 3. Low
costs associated with the transfer of information

4. Provides quick response to changes

5. Limit of over-capacity in process

6. Avoids overproduction

7. Minimizes waste

8. Control can be maintained

9. Delegates' responsibility to workers

Source: ICMR

The Kanban cards were re-circulated and the number of cards controlled work-in-progress
(WIP) in the system. In this way, the activities of final assembly were linked to previous
operations by a chain system of card ordering that 'pulled' production through the factory.

Another important component of JIT was Heijunka (production smoothing). JIT's principle of
building only the required number of items helped keep the production costs low. Heijunka
helped in the accomplishment of this principle by creating a consistent production volume.
Heijunka averaged the highest and lowest variations of the orders. The variations were then
removed from the production schedule. This ensured that the right quantity of parts was
produced with a minimum workforce. Heijunka took care not only of the total volume of
items but also the type of items produced and the other options.3
Although many automobile companies around the world adopted JIT, the system was far
from perfect and difficult to implement. It was based on the key assumption that sources and
channels of supply were dependable at all times. Analysts felt that

it did not take into account the possibility of labor strikes at automotive plants. Moreover, JIT
involved high setup costs and Special training and reorganization of policies and procedures
in the company were necessary to implement JIT. The supplier relations of the company also
needed to be improved to ensure timely delivery. In the absence of good supplier relations,
JIT increased the risk of inventory shortage. Organizational culture also seemed to play a
crucial role in the implementation of JIT. Many companies outside Japan reported difficulties
in the implementation of the concept.

Another problem seemed to be the difficulty of removing the 'human element' from the
systems that generate requirements.

An analyst commented, "Computer algorithms, they say, go only so far. Good people, with
lengthy experience at reading the ups and downs of the industry, are still a must." Most
companies felt that people should be actively involved in the system.

Moreover, there could be many barriers to the successful implementation of JIT. For JIT to
be successful, companies had to ensure that they did not make frequent changes in production
planning and that their forecasting procedures were reliable and did not result in under or
over forecasting of demand. Other barriers could be equipment failure and employee
absenteeism.

Analysts felt that Toyota's JIT was a complicated process and that its success inside a plant
depended mainly on highly experienced, highly motivated managers. Outside the plant, JIT's
success depended on a network of capable suppliers that operated in sync with Toyota's
production processes. In fact, according to some analysts, Toyota was not able to replicate the
JIT production system efficiently in any of its operations outside Japan. John Paul
MacDuffie5 said, "Toyota hasn't developed a single facility that is as efficient as the ones it
has in Japan."

Although Toyota's JIT had some drawbacks, it offered several advantages over other
manufacturing processes. Because of the early adoption of JIT, Toyota benefited more from
the system than other automobile companies (Refer Exhibits IV & V).
By 2000, JIT was adopted by many Japanese companies, as well as some US car companies.
Analysts felt that JIT was not only a process that could be applied to manufacturing but also a
philosophy that governed the attitude of a successful business. According to one analyst,6
"Using JIT, Taiichi Ohno had revolutionized production. The market reflects the success of
JIT. The concept has made Japanese products affordable and reliable in quality. Quality is no
longer a privilege - it is a standard accompanied by low cost."

Total Quality Management Analysis of Toyota

Total quality management (TQM) is a philosophy that stresses three principles for achieving
high levels of process, performance, and quality. These principles are related to (1) customer
satisfaction, (2) employee involvement, and (3) continuous performance improvement. TQM
also involves several other important elements. Through this paper, we have analyzed tools
and process analysis techniques used by Toyota Motor Corporation for process problem
solving, redesign, and improvement. Service or product design and purchasing are covered
later in this text. Here, we just focus on the three main principles of TQM.

1. The company extended the management responsibility past the instantaneous services
and products.

2. Toyota examined how consumers applied the products generated and this enabled the
company to develop and improve its commodities.

3. Toyota focused on the insubstantial impacts on the procedures as well as how such
effects could be minimized through optimization.

4. Toyota focused on the kaizen (incessant processes development) to ensure that all
procedures are measurable, repeatable, and visible.

It was found that the automobile segment of the company experiences a problem which is
defined through the product defects through wear in the machines. This issue was followed
by the American practice of operating the machine until it is broken and only calls in an
engineer to fix it. The act resulted in more effective parts as the machine wore down and a
lack of productivity was ensured within the operating division. And lastly, the issue of worker
confusion in working from one machine to another is defined as one of the systematic defects
that need an implementation of a strategy and a solution to the problem.

Customer satisfaction

The main aim of the organization is to provide quality services to the clients and maintain the
level of satisfaction to the clients. Customers, internal or external, are satisfied when their
expectations regarding a service or product have been met or exceeded. Often, customers use
the general term quality to describe their level of satisfaction with a service or product.
Quality has multiple dimensions in the mind of the customer, which cut across the nine
competitive priorities we introduced in Chapter 1, “Using Operations to Create Value.” The
most important asset of any organization is its customers. TQM and having satisfied long-
term supplier relations will end in attaining the common goal of organization and suppliers…
to satisfy end users. One or more of the following five definitions apply at any one time.

1. Conformance to Specifications: Although customers evaluate the service or product

they receive, it is the processes that produced the service or product that are being
judged. In this case, a process failure would be the process’s inability to meet certain
advertised or implied performance standards. Conformance to specifications may
relate to consistent quality, on-time delivery, or delivery speed. Toyota measures
customer satisfaction and importance to the customer by using four main variables
namely: loyalty, intention to repurchase, perceived quality of products, and attribution
satisfaction. Hill, Brierley & MacDougall (2003) point out that some of the techniques
used by the company to assess customer satisfaction and importance include customer
surveys, customer interviews, and focus groups.

2. Value: Another way customers define quality is through value, or how well the
service or product serves its intended purpose at price customers are willing to pay.
The service or product development process plays a role here, as do the firm’s
competitive priorities relating to top quality versus low-cost operations. The two
factors must be balanced to produce value for the customer. How much value service
or product has in the mind of the customer depends on the customer’s expectations
before purchasing it. Toyota provides cars at affordable prices. Toyota is a top-notch
brand. From a customer’s point of view, Toyota is much more economical than other
 car manufacturer brands. Toyota is a symbol of reliability. So it is worth every penny
to invest in a car from Toyota which gives customers satisfaction as it serves its
purpose which is value for customer’s money.

3. Fitness for Use: When assessing how well a service or product performs its intended
purpose, the customer may consider the convenience of service, the mechanical
features of a product, or other aspects such as appearance, style, durability, reliability,
craftsmanship, and serviceability. For example, you may define the quality of the
entertainment center you purchased based on how easy it was to assemble and its
appearance and styling. Satisfaction by most definitions simply means meeting the
customer’s requirement. Toyota is now standing at second in car manufacturer
rankings. It has a good reputation for its car reliability as well as its after-sales
services. Toyota makes robust cars that last longer than expected. Also, it is one of the
most reliable brands as it serves excellent after-sales services. Another thing to be
added is that car parts are widely available as their assembly is much simpler than
other car brands.

4. Support: Often the service or product support provided by the company is as

important to customers as the quality of the service or product itself. Customers get
upset with a company if its financial statements are incorrect, responses to its
warranty claims are delayed, its advertising is misleading, or its employees are not
helpful when problems are incurred. Good support once the sale has been made can
reduce the consequences of quality failures. Every Toyota vehicle is supported by a
36-month/36,000-mile limited warranty coverage. But it doesn't stop there. Toyota
Owner manuals and warranty information are the keys to quality maintenance for
your vehicle. No need to hunt down a separate Toyota repair manual or Toyota
service manual. From warranties on Toyota replacement parts to details on features,
Toyota Owners manuals help you find everything you need to know about your
vehicle, all in one place.

5. Psychological Impressions: People often evaluate the quality of a service or product

based on psychological impressions: atmosphere, image, or aesthetics. In the
provision of services where the customer is in close contact with the provider, the
appearance and actions of the provider are especially important. Nicely dressed,
courteous, friendly, and sympathetic employees can affect the customer’s perception
 of service quality. When people think of buying a car one brand that comes first in
their head is Toyota.

Customer satisfaction can be defined in many different ways. Finding the right way for a
company depends on understanding your customer and on having a clear vision of the role
that customer satisfaction is to play in strategy. For example, focus on customer satisfaction
can work alongside existing segmentations to support revenue generation from high-value
customers or it can be a company-wide objective rooted in brand values for the former it may
be sufficient to focus on improving customer service but for the letter, A broader definition of
customer satisfaction is necessarily closer to compare active reputation.

Employee Involvement

Total Employee Involvement is the heart of Toyota. Their definitive objective is to make a
free form any dangerous work environment for everybody, where every single partner can
practice their assorted possibilities and play their active roles. Till today Toyota’s high profile
Employee Involvement especially their HRM practices of employee involvement and
engagement is directly linked with their great success. So much so that it has been stamped as
an international model for manufacturing-based organizations.

1. Practices of Employee Involvement - In the present profoundly competitive and

dynamic business climate, Toyota has gone to their employees to work on hierarchical
commitment through the idea of empowering, employment groups and virtual groups.
In expanding the level of collaboration in the workplace, those endeavors can advance
the productivity of organizational decision-making and work progress.

2. Employee Empowerment - Employee Empowerment is a method of including

employees in their work through the course of inclusion. Engaged workers ought to be
considered responsible for their conduct towards others, creating settled-upon results,
accomplishing believability, and working with a positive methodology. Toyota urges
its employees to become trailblazers and supervisors of their work and includes them,
employees, to become pioneers and administrators of their work and includes them in
their positions in manners that gives them more independent dynamic limits.
Empowered employees share the obligation of further developing service quality,
 reduce expenses, and design new products. Intending to strengthen to develop and
flourish, Toyota looks for a good climate for representative strengthening in which
workers are urged to explore new ways to produce products and services.

3. Employee Teams - It fills in as the outgrowth and theory of empowerment.

Collaborating towards a typical reason under explicit conditions, the group, for the
most part, comprises employees with a wide array of skills and backgrounds, teaming
up to address a wide array of strategic business needs. Significant types of worker
groups of Toyota incorporate task force teams and process improvement, teams. A
task force team of Toyota is formed by the board to quickly resolve a significant
issue.

4. Virtual Teams - Virtual teams utilize advanced computers and media transmission
technology to interface with co-workers who are normally geologically scattered.
Virtual teams will impart through their computers while taking a gander at shared
reports and utilize electronic whiteboards which geologically scattered individuals use
to draw real-time graphs, as others watch and react. To compete with the present
national and international market, Toyota has additionally taken on virtual teams to
include specialists in multinational enterprises to improve cross-functional
associations.

Continuous improvement

Continuous improvement is the philosophy of continual improvement by identifying

benchmarks of excellence in practice and instilling a sense of employee ownership. The idea
behind the continuous improvement is that any aspect of a process can be improved and the
employees most closely working with a process are in the best position to identify it. At
Toyota Motor Corporation, proactivity is emphasized. There are 3 ways that Toyota is
implementing continuous improvement - the Deming Wheel, Kaizen, and problem solving
tools.

Although Toyota had flourished during World War II by selling trucks and buses to the army
and launched their first small car, after the war Toyota faced a series of financial problems.
To deal with them, a financial support package was provided from a consortium of banks
consisting of a series of steps including downsizing and restructuring the company into
separate manufacturing and sales divisions.

Toyota made their turnaround in 1953, as they appointed distributors in El Salvador and
Saudi Arabia to begin exporting. And sometime later Toyota entered the US market through
Toyota Motor Sales, USA. That was the inception of its first overseas production in Brazil
and a vast network of overseas plants. Using the Deming Wheel to achieve efficiency set
Toyota on the path to TQM.

After World War II, the implementation of the Deming Wheel turned tables for Toyota. The
cycle comprises the following steps:

1. Plan - The first step of the Deming Wheel is to Plan. In this step, the team selects an
activity that needs to be improved and they document the process, set qualitative
goals,problem-solving and discuss ways to achieve it. After thoroughly assessing the
benefits and costs of the alternatives, the team develops a plan with quantifiable
measures for improvement.

2. Do - The second step is to Do. In this step, the plan is carried out and progress is
monitored. The continual data collection helps measure the improvements of the
process. This is where they can document if further revisions are required, and are
made if needed.

3. Study - The third step is to Study. In this step, the team analyzes the data collected
during the previous step to find out how closely the results correspond to the goals set
in the original step. This is where the shortcomings are reevaluated.

4. Act - The fourth and final step is to Act. This step is carried out only if the results are
successful. This is when the team documents the revised process to make it the
standard procedure. Only after that, the team instructs other employees in the use of
the revised process.

This process helped Toyota turn tides after World War II. However, later in time, Toyota
started implementing Kaizen to meet the continual incremental improvement.
Kaizen is the managerial practice of maintaining current technological, managerial and
operating standards as well as the continual improvement of revising current standards. The 3
principles Kaizen is based on are -

a) Workplace effectiveness

b) Elimination of Muda - waste, Muri - strain, and Mura - discrepancy.

c) Standardization

In Toyota Kaizen is heavily relied upon. When Kiichiro visited the Ford Motor Company in
Detroit to study the US automotive industry, he noticed an average US worker's production
was nine times that of a Japanese worker. That is when he realized that the productivity of the
Japanese automobile industry had to be increased, without having to compromise the quality
if it were to compete globally. The principle of workplace effectiveness stemmed from there.
In Toyota, the focus of Kaizen is on the improvement of value-added and non-value-added
work activities, minimizing waste, material handling, motion study, documentation of
standard operating procedures, etc. And top management focuses on maximizing efficiency
and productivity of employees as well as the plant, improving the quality of the process,
minimizing inventory levels, etc.

Kaizen stresses the standardization of processes and machinery with certain objectives.
Toyota implements the standardization process intending to represent the best and easiest
safest way to carry out a job in the form of operating procedures and work instructions,
finding the best way to preserve know-how and expertise, measuring performance, and
standardizing the procedures of maintenance. The industry also audits for diagnosing the
problem and procedures for preventing the occurrence of errors and minimizing the
variability.

The goal of Kaizen is the maximization of quality, not profit. In Toyota, Kaizen is so
successful only because it is process-oriented and is prioritized based on its impact on the
customers. It's also a problem-solving and cross-functional team and collaborative approach.

At Toyota Motor Corporation, employees are also given problem-solving tools such as the
statistical process control (SPC) methods, which gives them a sense of ownership of the
process to be improved. The sense of operator ownership only emerges when employees feel
responsible for the methods they use and take pride in the quality of the service or product
they produce. It comes from participation in work teams and in problem-solving activities,
which instill in employees a feeling that they have some control over their workplace and
tasks. Even though Toyota is far ahead in developing the automobile market, the corporation
still uses continuous improvement to train their work teams to continually improve.

Conclusion

Even when we walk out into the streets of Dhaka, the Toyota logo is the most common one
on the body of any automobile. This has always been a key indicator for me of Toyota’s
success as a global brand, as they have been able to achieve this majority market share in
many countries other than Bangladesh too. As the article states, the major contributor to this
industry dominance is the implementation of Total Quality Management.

The case has shown me the importance of innovation and creativity in the operations of a
company. Although Toyota wasn’t the first or most famous automobile manufacturer when
they started, they were willing to adapt and learn from other successful companies such as
Ford and improve on their practices. Toyota adopted the Deming Wheel after World War II
and afterward incorporated TQM into these processes to enhance their performance and
quality to the next level.

The Total Quality Management at Toyota Motor Corporation is extremely practical and
effective. The implementation of TQM gives Toyota the upper hand at producing world-class
automobiles without compromising quality. Toyota’s quality management system is
unmatched as they are more efficient and productive in comparison to any other automakers
like Mercedes-Benz, Honda, and DaimlerChrysler. Toyota’s TQM is considered as the
benchmark for manufacturing and product development by rival companies.

This system has a vital role in developing the quality of operations of companies all around
the world. Even to this date hundreds of western companies are using the Toyota quality
management methods which are a clear indication of Toyota's success.

The managerial trends of TQM proved to be extremely successful at Toyota. Through

continuous TQM, Toyota was able to improve their process, prevent defection, prioritize
efforts, help teams make better decisions, and most importantly improve their customer
satisfaction and continues to be the most profitable car manufacturer in the world today.
TQM is applied to ensure the continuous improvement in the quality of their products and
also customer service in the company. This also would create a systematic and controlled
working environment to ensure smooth operations and to create a better working
environment.

Toyota was able to gain a competitive advantage over its rivals due to their different
approach to the process of ensuring quality. Although many companies tried to study
Toyota’s principles and methods, implementing TQM into their factories proved to be more
difficult than they had anticipated. This goes to show that TQM depends a lot on the work
culture and management motivation that is instilled into the employees. Japanese employees
are known for their strong work ethics and their no-nonsense approach to life in general. This
turned out to be just the right fit for Toyota’s production systems as they could train their
employees on TQM and they would be able to swiftly implement its principles into their
operations.

To sum it all up, Toyota’s dominance in the world of automobiles has not come overnight.
They were able to identify the key aspects of a company operating in their industry and
decided to focus on ensuring the top-notch quality of their parts initially to drive down their
costs and become a more approachable and affordable car company compared to their rivals.
They were able to set global precedence with continual improvement through Kaizen, which
was later followed by many other Japanese companies in different industries with various
degrees of success. Toyota’s goal of putting their customers first is a philosophy that all
companies should abide by, and the innovation of back-end processes is a practice every
company should be engaged in as well if they aim to have success in their respective
industries.

Reference

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