TQM IN TOYOTA:

A Case Study
Company Profile
 Toyota is one of the leading Japanese automobile vehicles manufacturers around the world.

 Established on August 27, 1937, the company offers vehicle manufacturing as well as
financing in other industries.

 The company sells its vehicles to a number of 190 countries, and the primary markets are in
Japan, North America, Europe, as well as in Asia (Toyota Motors Sales USA 2016).

 Toyota’s automotive division includes the design, manufacture, assembly, and sales of
passenger vehicles and promotes the integration of automotive industry and technology.

 Its subsidiary company, Daihatsu Motors, Ltd. produces and sells compact cars and
minivehicles, while Hino Motors Ltd. produces and sells commercial vehicles such as buses and
trucks (Toyota Motors Sales USA 2016).

 In the current market, Toyota sells three kinds of cars: hybrid vehicles, conventional engine
vehicles, as well as full cell vehicles.
Problems faced by the Company

 Employee Involvement:-

 Managerial behavior and leadership are playing important roles in company, but Toyota seems a little bit weak in
these areas.
 Whenever emergencies take places, the Toyota team may waste too much time passing the information through
stratums.
 The top level in this company cannot make decision quickly enough to handle problems.
 Decision making and executing may be delayed due to the poor communication between leaders and workforce.
 During the passing procedure, the condition of occurring problems may be misunderstood, errors may occur
meanwhile.
 Such situations may even lead to deadly result which could be avoided if concerned.
 Supplier Relationship:-

 Supplier relationship is an important critical factor in the total quality system of auto industry like Toyota.
 For Toyota, in order to get cheap auto-spare parts, the company sought for oversea supplies extensively.
 This action has actually damaged the traditional keiretsu system. To be more specific, it led to two
defects.
 Firstly, it is hard to assure the overall quality of Toyota’s products and manage the supply chain if the
company pursuit for a lower costs blindly.
 Secondly, Toyota outsourced its manufacture of auto-spare parts to overseas suppliers, which
increased the difficulties of quality control.
 Compressing costs excessively brings great negative impacts on its product quality.
 It was found that the Toyota experiences a problem which is defined through the product defects
through wear in the machines. This issue was followed by the American practice in operating the machine
until it is broken and only calls an engineer to fix it. The act resulted in more defective parts as the
machine wears down and lack of productivity ensues within the operation division. And lastly, the issue of
worker confusion in working from one machine to the other is defined as one of the systemic defects that
need an implementation of a strategy and a solution to the problem.
Methods used in TQM process
i. The TQM element approach:- The TQM element approach takes key business processes and uses the tools of
TQM to faster improvements. This method was widely used in the early 1980s as companies tried to implement
parts of TQM as they learned them. Examples of this approach include quality circles, statistical process control,
Taguchi methods.

ii. The guru approach:- The guru approach uses the teachings and writings of one or more of the leading quality
thinkers as a guide against which to determine where the organization has deficiencies. Then, the organization
makes appropriate changes to remedy those deficiencies.

iii. The organization model approach:- In this approach, individuals or teams visit organizations that have taken a
leadership role in TQM and determine their processes and reasons for success. They then integrate these ideas
with their own ideas to develop an organizational model adapted for their specific organization.

iv. The Japanese total quality approach:- Organizations using the Japanese total quality approach examine the
detailed implementation techniques and strategies employed by Deming Prize–winning companies and use this
experience to develop a long-range master plan for in-house use.
Benefits of TQM
Total Quality Management (TQM) is a quality system based on lean management. It is a proven affective
management philosophy which focuses on attaining the best in every aspect of the business. Some of the basic
principles are:-
 Focus on Customers
 Continuous Improvement
 Total Participation (Employee engagement)

Focus on Customers:- Acquiring customer satisfaction is the essence of improving quality. Rather than
confining quality improvement to upgrading product quality and after-sale service, companies must
transform themselves to encourage a sense of enjoyment and pleasure within every employee in his or her
work to enhance customer satisfaction. Every worker does eventually leads to higher customer satisfaction.
Every employee’s workplace is an important part of the process.

Continuous Improvement:- This is also known as lean kaizen or lean management. The way managers
understand and implement improvement activities shapes corporate culture. Encouraging a workplace
where employees have high morale, motivation and a sense of achievement in their improvement activities,
greatly depends on the supervisor’s management expertise.
Total participation:- Total participation literally means employee engagement in activities to achieve the
company’s goals. This is a workforce management strategy that creates a corporate culture of cooperation and
respect for the individual which then paves the way for companies to take advantage of employee’s individual
talents and strengths. This encourages success and creates momentum.
Sharing a sense of common values, common mission and a common awareness of the problems in the
workplace is a foundation for fostering teamwork in an organization. Two important factors here are leadership
of the supervisors and open communication among staff members
 Implementation of TQM in Toyota
In order to implement TQM, Toyota corporations focused on the following phases:

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

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

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

 Toyota focused on the kaizen (incessant processes development) in order to ensure that all procedures are
measurable, repeatable, and visible.
 Solutions
 Employee Involvement groups have been found to positively impact employee commitment to quality. Toyota
organization however do not satisfied the workforce currently. In order to create an active working group, Toyota
Company should move power to individuals that are lower in the organization. According to Edward’s saying,
improvements can be best down by natural work team when team members are given authority, information and
knowledge to improve processes and are responsibility for the major portion of the production or service process.
Toyota Company should strengthen the relationship between each level within the whole organization and try to
achieve equilibrium in team members’ authorities. Company culture need to be created and accepted by everyone in
the company.

 The improvement given to Toyota in the aspect of supplier relationship involve two aspects. On the one hand, Toyota
can expand its manufacturing depth and range to some degree. According to Smith and Greenwood, Toyota adopted a
very close co-operative partnerships relationship with its suppliers for the reason that the company can only
manufacture a bit of self-made spare parts. The company is just responsible for its products, overall quality and design
and almost all of the spare parts that needed to produce the car come from the suppliers. Though, this method can’t
bring benefits to reduce the costs. However, quality should be the most important factor that a company should take
into fully consideration than the cost.
 On the other hand, to specifically talk about the method to manage the suppliers, it can be classified as three
aspects: verify, standardized and evaluate. Firstly, verifying the suppliers lists to ensure the quality of the suppliers.
Secondly, standardize the producing process of the suppliers to reduce the possibility of making mistakes. Thirdly,
evaluating the products the suppliers offered.

 For the improvement of product defects through wear in the machines, Company management stopped moving
workers around as much as possible and assigned employees to have responsibility for the individual machines to
prevent the further practice of wearing down the machine before calling in maintenance. This strategy enables the
provision of training and development as well as clear communication as principles of TQM to be applied in the
operational unit. It is this step that Toyota was able to provide an application of TQM in the human resource
department, which encouraged the management to further expand its use of TQM to the other problems related to
Toyota’s implementation of the strategy.
OEM- Supplier Working Relations Index
 After Implementation of TQM (Results)
I. Toyota was able to become the highest quality producer of cars in the world and has dominated the 1980 import
market. Toyota presently experiences success in the field of manufacturing basically because of the result of
integrating TQM in its management of human resources and operations.

II. The use of TPS made it possible for the company to achieve the expected outcomes and the creation of kaizen, or
continuous improvement. It enabled all Toyota employees to have a responsibility to follow closely the
standardized guidelines which reflect the mission, vision, goals, and culture which the company strives to
maintain in both employee relations and process development.

III. Toyota achieved success in the advent of worker’s job satisfaction and taking over responsibility in the machines
which they use to operate in the manufacturing division.
 Conclusion
 Total Quality Management is a concept applied in automobile industry, including the Toyota
Corporation. It focuses on continuous improvement across all branches and levels of an organization.

 Being part of Toyota, the concept defines the way in which the organization can create value for its
customers and other stakeholders. Through TQM, Toyota Corporation has been able to create value,
which eventually leads to operation efficiencies.

 These efficiencies have particularly been achieved by continuous correction of deficiencies

 The Toyota way (kaizen), which aims at integrating the workforce suggestions while eliminating
overproduction and manufacturing wastes helps the company to respect all the stakeholders and give
clients first priority. The objectives are realized through TPS.
Thank You