Quality Management at Toyota Motor Co - Term Paper Example

? Quality Management at Toyota Motor Company Introduction Quality management symbolises managing of quality with respect to the desired level. Quality is primarily associated with products but at present it is incorporated with services as well. Customers always strive to get quality products in affordable price. Quality implies the degree of inherent features of the product which executes the expectations of the customers with respect to the product. In this context, Toyota is a renowned company for its quality products. To control quality, companies have to prepare set guidelines of quality standard, adhere to the existing quality standards in the industry as well as invest requisite amount of funds in relevant aspects. Most of the organisations use the standard based on ISO 9000. There is certain quality control models developed for automobile industry in various countries namely VDA for Germany, AVSQ for Italy and QS-9000 for US automobile industry among others. Since 1951, Japan offers Deming-Award for Quality Management (FinePrint, n.d.). Quality Management Based On ISO 9000 Source: (Comite euro-international du beton, 1998). 1. Brief Historical Background Toyota Motor Company is a renowned name in the automobile industry of the present world. Toyota manufactures vehicles as well as automobile-related products, such as engines, car air-conditioning compressors and car electronics components. Toyota achieved its success by applying its innovative idea of ‘lean marketing’. The aim of lean marketing is to offer additional values to the end customers (Morrison, 2011). Toyota established Toyota Motors Pvt. Ltd. in the year 1937 in Japan. In the year of 1938, production began in Honsha Plant. From 1959, with the initiation of Motamachi plant, the company started focusing on its quality performance that rewarded it Deming Application Prize in the year of 1965. Led by certain mergers and acquisitions, the company always focuses on the quality and comfort of its customers. Toyota Motor Company has diversified its business over the years throughout the world. In 2002, it entered into the domain of Formula One World Championship. It has taken several initiatives with respect to the quality control issues as well as for the environment. It has implemented advanced technology to manage the quality. The company has taken initiative for utilising hydrogen as alternative fuel, providing plug-in vehicles among others. The philosophy of the company is to serve customers at prompt and to satisfy the customers with enhanced quality. Toyota has its own experts to check the quality of the vehicles in various situations in order to ensure the customer safety. Toyota has put emphasis on ‘traffic safety education’ since the 1960s and never intends to compromise on the quality of vehicle. Toyota recommends safety driving lecture sessions in support of drivers as well as ‘traffic safety education’ activities designed for teenagers (Moneycontrol.com, 2007). Toyota fulfils its corporate social responsibilities (CSR) by offering safe and reliable vehicles to its customer. The automobile industry is facing newer challenges day-by-day. There are certain factors for which companies face newer challenges that can create higher demand like globalisation and increasing competition along with others. In addition, there are safety requirements and environmental commitments which have a major influence of Toyota’s operations. In the present context, customers are not satisfied with standardised vehicles; they want their personal requirements to be incorporated by the company in the vehicles that they want to purchase. Thus, Toyota has to take into consideration the needs of customers in commensurate with the quality standards of the vehicle and has to ensure that quality standards do not deter due to the added features. Toyota’s fundamental philosophy depends on five values that assemble its employees towards corporate course of action with the intention to support further development, are indicated in given figure. Toyota’s Five Values Source: (Toyota-industries, 2011). Toyota has been developing innovative, secure and high-quality vehicles keeping in mind their philosophy of “Customer First”. The company contributes to the sustainable development of the society throughout the counties of operates. Toyota focuses on long-term relationships with its partners as well as stakeholders. It uses advanced technology to minimise the hazardous materials that generated from its vehicles. It takes several initiatives with its partners as well as individuals to enrich the social responsibility. Toyota holds 4 brands namely Hino, Scion, Daihatsu and Lexus. Toyota is recognised worldwide for quality and reliability. Toyota has large product variety, stable production and flexibility among others. Brand management strategies facilitate companies to be more determined and render them able to differentiate their products from the competition. Toyota can apply CRM (Customer Relationship Management) to enhance its quality in accordance with customers’ needs. Toyota motivates its employees to work in a suitable environment so that the employees feel enthusiastic to perform their best shot for the organisation. Toyota strives to increase the long-term constancy of its corporate value and maintain its CSR (Corporate Social Responsibility) commitments towards various countries. Toyota has taken several action plans to fulfil its responsibility towards environment. Toyota has done continuous research to meet the customers’ demands and it always focuses to develop a number of features to satisfy customers not compromising with quality. It established “Toyota Industries Heartful Club” in the year of 1997 to organise welfare events for former employees of Toyota and its subsidiaries. Toyota works with local government of different countries to make the people aware regarding the traffic problems. In the year 2010, Toyota organised ‘Yellow Stop Campaign’ on Zero Traffic Fatalities Day and 12000 of its employees had participated in this event. Toyota has always put focus on eco-friendly products. It developed car air-conditioning compressors to apply it in electric vehicles along with hybrid cars (Toyota Industries Corporation, 2011). 2. Present Status Toyota Motor Company uses advanced technology to enhance the quality of the vehicles. Toyota has become a market leader by enhancing quality and satisfying the customers’ needs worldwide. Toyota has created a name for itself in terms of increasing customer expectations. With regard to the current issues, as an automotive company, Toyota concentrates on engineering-oriented approach. Toyota recognises that there is a gap between the customers’ perspectives and the company’s perspective and this gap is caused due to lack of sharing of information with the customers which also adversely affects the company. The company recently faced certain problems regarding certain safety issues as the company has failed to meet customers’ perception. However, Toyota takes it in a positive manner as an opportunity for further improvement. It motivates its employees to recheck the quality standard as the key philosophy of the company is ‘Customer first’. Toyota takes certain preventive measures to improve its services to satisfy the customers e.g., in the US, Toyota established a group of centres namely SMART (Swift Market Analysis Response Team) to reduce the customers’ complaints regarding unintended acceleration. Toyota uses ‘Remote Communications Functions’ to assist ‘root cause analysis’ and to improve decision making process with respect to safety (Toyota Motor Sales, U.S.A., Inc., 2011). 2.1 Current Issues In recent years, Toyota has faced certain troubles regarding safety matters such as floor mat, ABS (Anti-Lock Braking System) and accelerator pedal. The issue of floor mat came into limelight in the year 2009 in the US. Later, Toyota declared a recall to rectify this problem in the US on January 2010, followed by another recall in Japan in the month of February of 2010 (Toyota Motor Sales, U.S.A., Inc., 2011). In March 2010, Toyota established a new material handling company in North America and in December 2010, Toyota established ‘air-conditioning compressor production plant’ in Indonesia with Toyota’s subsidiary DENSO. In March 2011, Toyota helped to restate the victims of Pacific Coast of Tohoku Earthquake and initiated the CSR (Corporate Social Responsibility) measures towards Japanese community (Toyota Industries Corporation, 2011). Regarding the accelerator pedal problem, Toyota has taken certain preservative initiatives to resolve the problem. In the accelerator pedal the bar supports the reaction power of the spring with the purpose of returning the accelerator pedal in the direction of its non-pressed location. To reduce the braking performance, proper ABS software was installed by Toyota. The company highlighted ‘Star Safety System’ in advertisement which consists of five standard safety equipments. On May 2011, Toyota announced that it received the recommendations regarding safety and quality issues from ‘North American Quality Advisory Panel’. Toyota has been persistent in becoming more focused towards customers. Star Safety System is used in all latest vehicles that consist of ‘Smart Stop Technology’ which is a brake override system. Earlier, Toyota found that there was deficiency in building customer relationship. Therefore, Toyota is looking for continuous feedbacks from customers and experts as well (Toyota Motor Sales, U.S.A., Inc., 2011). The figure given below shows the controversial issues identified by Toyota. Problems Identified in Vehicles of Toyota Source: (Toyota Global, 2011). 2.2 Practices Toyota at present focuses on customer satisfaction because it has already faced certain problems with respect to safety issues of a few of its products in the US and Japan. Toyota has taken several measures to enhance its safety and customer satisfaction. Toyota emphasises on traffic education to professional drivers and teenagers. It analyses certain investigative data related with accidents to enhance vehicle safety. Toyota dynamically works with the Japanese government towards executing a protected traffic environment as well as to assist in cutting down the amount of traffic accidents by joining with the Japan Automobile Manufacturers Association (JAMA). Toyota uses a number of advanced technologies to develop safe vehicles such as passive safety technology which reduces the damage occurred from collisions. Toyota's active safety technology facilitates to avoid accidents to a possible extent. In May 2011, Toyota has established the first hydrogen fuel-in station in the US. Toyota’s latest brand is ‘Prius v’ from Prius family of hybrid vehicles. The new model has unequalled mixture of versatility and fuel efficiency as well as is a secured mid-size package for the US customers. Lean manufacturing has been other important facet of present Toyota. In fact, Toyota has become the pioneer of lean manufacturing. The initiative of lean manufacturing attained popularity after Toyota had implemented the process of lean marketing. Lean marketing has certain benefits i.e. it helps an organisation to adapt to the changes easily and to reduce WIP (work in-progress). Toyota joined hands with Microsoft to offer advanced vehicle “telematics” to its customers. Toyota has declared new quality leadership initiatives with SMART process to respond to customers regarding the acceleration problem. 2.3 Developments Toyota has focused on sustainable development of vehicles so as to meet the customers’ higher perception. Even in the external parts of the vehicle, Toyota is building up systems which make driving safe and convenient as well. Toyota Production System emphasises on Just-in-time methodology of production. Toyota’s initiative for eco-friendly cars has a significant role in automobile industry. Toyota uses hydrogen as fuel in its certain hybrid models. Electric cars of Toyota are ‘eco-conscious vehicle’ designed for day-to-day driving. Based on Toyota’s philosophy of ‘Customer First’, the experts of the company examine and evaluate vehicles with different techniques to be persuaded with the rigorous standards. In certain motor show events, Toyota is announcing about its concept cars. The concept of upcoming “Toyota Electric Vehicle II”, a zero emission car is to be launched soon. The car is considered as the ultimate environmentally considerate vehicle. Toyota has confirmed certain environmental concerns that are expected to intensify in the period from 2020 to 2030. These are global warming, substances of concern, atmospheric quality, recycling of resources. The research and development centre of Toyota is developing technologies to reduce fuel emission, supporting the ‘Design for Recycling Concept’; working on reducing the discharge of substances during production with other plans (Toyota Global, 2010). 2.4 Controversies & Impact There had been certain controversies concerning the safety issues faced by Toyota in recent years. In 2009, there were a number of failures on the quality of a few features in Toyota’s vehicles as reported by the customers. The issues were regarding floor mat, ABS (Anti-Lock Braking System) and accelerator pedal. Nevertheless, Toyota took it in constructive way. It considered the failure as the opportunity to reach perfection. It took preservative measures to ensure the safety and to persuade the growing customer needs. It has implemented the approach of quick response of customer complaints that occurred due to acceleration problem with SMART (Swift Market Analysis Response Team). Toyota focuses on extended safe vehicle along with the exterior design of the vehicles. Toyota announced voluntary recall of certain vehicles in the US on January 2010 because of this issue of acceleration followed by another recall in Japan in the month of February 2010 regarding the ABS (Anti-lock Braking System) (Toyota Motor Sales, U.S.A., Inc., 2011). Toyota also provides traffic education to the drivers and teenagers for safe driving (Toyota Motors, 2011). 3. Overall Quality Management in Toyota Toyota follows TQM (Total Quality Management) method to enhance its quality control of vehicles. Toyota achieved first position in 2005-2006 according to Fortune magazine for quality and social responsibility. It has been accepted as ‘second most admired global company’ in automobile industry. Total quality management is one of the popular methods to improve products’ quality. It focuses on meeting the customer needs with quality products in affordable prices. Toyota is playing in high competitive market. The R&D department of Toyota emphasises on B2B (Business-to-Business) and B2C (Business-to-Customer) surveys on quality control. Toyota’s obligation to excellence in customer service expands worldwide. Several authorised dealers of ‘Toyota Industrial Equipment’ throughout the US present comprehensive customer service support (Toyota Industrial Equipment, 2005). Lean manufacturing in Toyota is one of the important components to ensure overall quality management. The principles of lean manufacturing consider continuous improvement and Just-in-Time process of production. In lean manufacturing system, it is essential to shift to a higher extent of process control in order to strive to condense waste. Toyota also took initiatives to improve quality further after the controversial issues raised in the US and Japan in the year 2009 (ResQ Management Resources Ltd., 2009). Toyota Management System Source: (QV Systems Inc., 2010). Toyota follows the lean manufacturing process which helps to reduce work-in-progress (WIP) in process. The figure provided above narrates that the manufacturing process implemented in Toyota. Toyota focused on eradicating waste time and material through the production process from the year of 1940. Subsequently, they took initiative to execute the lean production (Liker, 2004). Conclusion It is perceived that quality has presently become synonymous with the Toyota vehicles. It has successfully fulfilled its CSR (Corporate Social Responsibility) in various countries where it operates its business. Toyota always intends to provide quality products to satisfy its customers. However, it has faced certain controversies during the year of 2009. And since then, Toyota took the difficulties raised by controversies as its opportunity for further improvement. Toyota has created its position in the industry significantly over the years for being reliable, by supplying low-defect vehicles, and sustaining public perceptions about quality. However, the controversial issues have adversely affected its business across the world. There is intense competition in the automobile industry with prevalent industry players such as Ford, Hyundai and General Motors. Toyota has developed as the market leader in automobile industry through certain mergers and acquisitions. Recently, Toyota got into a partnership with Microsoft to provide advanced “telematics” to its customers. Toyota adopted certain policies such as recycle-oriented society along with respect for all people. Toyota intends to lead the market in terms of mobility and socially responsible operations with a commitment to quality, efficient innovation with lower rate of environmental hazards. Thus, it can identified that quality management in Toyota has been a major stepping stone for sustained growth and success of the company and in future too, it is expected that this aspect will enable Toyota to maintain customer trust and loyalty (Toyota Global, 2011). References Comite euro-international du beton. (1998). Quality management: guidelines. UK: Thomas Telford. FinePrint. (No Date). Models of quality management. Retrieved from http://www.calidad.unav.es/Archivos/models.pdf Liker, J. K. (2004). The Toyota Way: 14 Management Principles From The World's Greatest Manufacturer. USA: McGraw-Hill Professional. Moneycontrol.com. (2007). Toyota launches traffic safety education initiative. Retrieved from http://www.moneycontrol.com/news/business/toyota-launches-traffic-safety-education-initiative_293538.html Morrison, M. (2003). Toyota applies quality management to people. Retrieved from http://gmj.gallup.com/content/1165/toyota-applies-quality-management-people.aspx QV Systems Inc. (2010). Toyota management systems seminars. Retrieved from http://www.qv-system.com/files/Toyota_Management_Systems_Seminars_r1.pdf ResQ Management Resources Ltd. (2009). Lean Marketing. Retrieved from http://www.resqmr.co.uk/lean-marketing Toyota-industries. (2011). Five values (We have Five Values that form an action guide for our employees to enforce our basic philosophy). Retrieved from http://www.toyota-industries.com/corporateinfo/philosophy/ Toyota Motor Sales, U.S.A., Inc. (2011). Toyota announces voluntary safety recall. Retrieved from http://pressroom.toyota.com/safety-recall/ Toyota Global. (2010). Overview of the new R&D center. Retrieved from https://www.toyotaglobal.com/sustainability/environmental_responsibility/basic_stance_on_the_environment/initiatives_rd/overview/pdf/all.pdf Toyota Global. (2011). Overview of a Recent Series of Quality Management Issues. Retrieved from http://www.toyota-global.com/sustainability/sustainability_report/special_story/the_quality_issue_background_and_future_prospects.html Toyota Industries Corporation. (2011). News. Retrieved from http://www.toyota-industries.com/news/2011/ Toyota Motors. (2011). The quality issue: background and future prospects - seeing the quality issue as an opportunity for renewal and improvement / firm action throughout its operations in each field. Retrieved from http://www.toyota-global.com/sustainability/sustainability_report/special_story/the_quality_issue_background_and_future_prospects.html Toyota Industries Corporation. (2011). Corporate citizenship. Retrieved from http://www.toyota-industries.com/csr/ Read More