At the end of the day, the insistence of the company on lean and efficient production rests on the strategy of offering the market cars that work reliably and are as affordable as possible. Quality and productivity helped the company penetrate an impoverished domestic market still struggling to surmount the devastation of World War II, subsequently dominate its Japanese competition and become a global marketer.
If the open-mindedness about all assumptions and processes is to be maintained, then this calls for the deliberate pursuit of continuous improvement. Otherwise, there is no point in an obsession with quality and getting the company product as attuned as possible with market needs.
Intrinsic to these guiding principles is a leadership style that views breakdowns, accidents, and product failure not as occasions for pointing fingers or imputing blame but as opportunities for cutting out waste, becoming more efficient, and moving forward. Beyond cost-efficiency, however, the Toyota principles effectively define a vision for a multinational enterprise. Hence, a substantial portion of the seven principles is given over to achieving harmony with the cultural nuances of every society and market where Toyota operates. As well, the company affirms a belief in being a responsible member of the “global village”, in looking to reduce the massive pollution that cars are responsible for, managing for harmonious labor relations, building safer cars, taking care of suppliers, and R & D partners. Finally, Toyota seeks to avoid resentment as it vanquishes established competitors that have long been sources of pride in their respective nations.
One can see, therefore, that the stated principles constitute astute PR to gain acceptance with governments, labor unions, suppliers, dealers, media, and consumers in the market after market that Toyota conquers by perennially competing on price. Who can blame the company for passing on to car owners the cost efficiency derived from TQM?
All these are reflective of the bedrock of Total Quality Management principles about:
- Keeping a focus on satisfying the market, the external customer, by being driven about the quality of goods and services one produces;
- Attending to internal customers: giving frontline workers the tools and the policy environment to do well and thereby satisfy their supervisors who will appraise performance and influence both their merit increases and career path.
- Keeping both external and internal suppliers happy, which is to say: well-compensated for providing quality raw materials and components; delivering these according to a rigid schedule if, like Toyota, a company practices “just-in-time” inventory; committed by informing them about product standards and plans; consulting with them on streamlining raw material or component production to bring down costs or at least keep them under control, and in all other ways helping external suppliers succeed.
- Finally, TQM mandates continuously improving production and R & D processes by working smarter and maintaining an emphasis on doing things right the first time.
How Toyota’s Philosophy and Practices Apply to Service, Education, and Government
This is a vital consideration since consumer expectations have risen and exacted higher standards from the service sectors: customer service, health care, education, not-for-profits, and government. While customer relations management (CRM) organizations are, by definition, market-driven and liable to readily understand why satisfying callers is their central obligation, this is not necessarily so for the other service sectors.
For health care, education, and not-for-profits, the transition to customer-driven quality management requires a paradigm shift, based on the realization that patients, students, and donors can take their dollars elsewhere if dissatisfied. The price of mediocre service is the cost of having to continually attract replacement customers and counter unfavorable word of mouth.
It is hardest of all to see the applicability of TQM to the government since one may think that constituents have no choice but to live with bureaucratic attitudes and a glacial pace of doing things if one transacts with, say, the DMV, the IRS, or the local Board of Education. But voters can do something about inertia in government by voting for candidates who promise to bring government services to the modern world. Hence, incumbents who look forward to reelection can ill afford to ignore dissatisfaction with the quality of government service.