Toyota Company’s Total Quality Management

Introduction

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.

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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.

Objectives

The general aim of the study is to investigate the manner in which quality is implemented in Toyota Motors. In achieving this goal, the study attempts to discuss the various policies of Toyota Motors in connection to quality. Aside from TQM, the study will also focus on other concepts being promoted by the firm.

Total Quality Management

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 in consistently cross-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)

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)

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.

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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.

The financial benefits of JIT are widely recognized in the manufacturing industry. When firms maintain their inventory, there are several costs that need to be considered. Firms have to build storage areas that will protect the goods from damage. Moreover, companies have to spend on an inventory system that will secure distribution. Inventories that are stored in production plants create risks for damages. This is one cost that firms try to avoid.

Financial Benefits

There are several financial benefits associated with the use of TQM. Through the system, Toyota was able to decrease the number of defects. When quality is assured, resources are used at their maximum potential. In addition, Toyota saves time from meeting the shortage because of defects. In the manufacturing business, materials, labor, and overhead costs have to be accounted for. When some of the production components are poorly used, then losses are expected. The role of TQM in Toyota extends beyond the emphasis on quality. It serves as a mechanism that will provide savings in the long run.

Aside from the materials, TQM allows Toyota to phase the use of machines and equipment. Despite the increased demand for cars, Toyota has remained conservative when it comes to production. Some firms tend to overreact causing massive excess in production. TQM enhances the use of Toyota machinery and ensures longer product life. Instead of acquiring new equipment, Toyota enjoys longer useful years of its machines. It is expected that the company will save more through this initiative.

Another important element of TQM is that it highlights the importance of training. The training involved in TQM allows workers to become more flexible. Instead of hiring more workers, Toyota banks on the multiple expertise of its workforce. The flexibility of Toyota employs makes the company more competitive. Although training is expensive in the short run, the benefits taken from this initiative compensates for the initial cost. In addition, JIT limits the transportation routes undergone by the products. This strategy also reduces the risk of the goods being damaged.

Discussion

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, other companies have used the processes developed. 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.

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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.

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)

Most practitioners argue that TQM was implemented in Toyota to ensure quality. But there is a subtle emphasis on the cost that needs to be discussed. Before TQM came into existence, Toyota was dwarfed by big automakers such as Ford and General Motors. At present, Toyota has already surpassed the revenues of both automakers. As the cars of Toyota improved in quality, their cost also decreased. The excess resources that Toyota gained from using TQM were critical in its goal to improve the product lines. Moreover, cost-effectiveness in its operations has made Toyota more competitive. The company had success in managing its funds through TQM.

Recommendations

The extensive use of TQM is a primary priority for Toyota. But there are improvements that can still be implemented. Limiting costs to a minimum is an important goal. Toyota, however, has to ensure that the quality of products is maintained. It is critical for Toyota to eliminate TQM processes that create more costs than benefits.

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 researches 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)

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.

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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.

The emphasis of TQM on financial management needs to be highlighted. The mere focus of TQM on quality shows the dedication to limit defects and returns from customers.

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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