Total Quality Management Implementation by Toyota Motor Corporation

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Master of Science Engineering Project Management, Bournemouth University

Design Management

February 16, 2024

TABLE OF CONTENTS

1 TOYOTA`S HISTORICAL BACKGROUND AND TOTAL QUALITY MANAGEMENT

FOUNDATION…………………………………………………………………………………. 3

2 TOYOTA`S ORGANISATION PRACTICES .................................................................. 6

3 TOYOTA ORGANISATIONAL CULTURE ................................................................... 7

4 TOYOTA LEADERSHIP STYLE ..................................................................................... 8

5 TOYOTA ROADBLOCKS TO TOTAL QUALITY MANAGEMENT........................... 9

6 CONCLUSION .................................................................................................................. 9

7 REFERENCES ................................................................................................................... 9

LIST OF FIGURE

FIGURE 1 .................................................................................................................................. 5

FIGURE 2 .................................................................................................................................. 6

FIGURE 3 .................................................................................................................................. 7

FIGURE 4 .................................................................................................................................. 8

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1. TOYOTA'S HISTORICAL BACKGROUND AND TOTAL QUALITY MANAGEMENT

FOUNDATION

TMC (2014), traced Toyota Motor Corporation's (TMC) origin from Sakichi Toyoda's (1867-

1930) humble beginning of producing one of the best automatic looms based on several key

elements that materialised into the pillars of the Toyota Production System (TPS) including

genchi genbutsu which means solving issues and improving processes by tracing it from the

origin, jidoka meaning automation with a human phase, and monozukuri which means the

manufacturing spirit. In 1929, Sakichi`s son, Kiichiro (1894-1952) sold to Platt Brothers &

Co. patent rights of his father`s Toyoda Automatic Loom Works for £100,000 with which he

commenced the design of Model AA utilising Ford and GM components (Cusumano 1985).

In 1933, Kiichiro employed the services of experienced engineers [Link] (Wada 1995), S.

Kamiya to handle Toyota`s sales and marketing activities, R. Oshima to purchase European

automobile equipment and machinery, and S. Takatoshi to travel to the USA to understudy

automotive components production. Also, based on Holweg's (2007) account Toyota`s

representative visited a German plant known as the Focke-Wulff Plant to monitor the

`Produktionstakt` method which later was expanded to takt time meaning the production time

of a product unit. These steps culminated in a Model AA prototype passenger car production

in 1935. In 1938, Kan masterminded the Koromo Plant with a 2,000 monthly production

capacity and started operations using a combination of American manufacturing styles and

Kiichiro`s just-in-time (JIT) which means manufacturing and delivering the right items at the

right time in the right quantity. Toyota Motor Company (TMC) was established on August 28

1937 (Toyota 2024) and the pre-war era formed the key driving principles including keeping

monozukuri alive, kaizen meaning non-stopping improvement, genchi genbutsu, jidoka

locked in human resources, inspiring creativity and innovation, advanced manufacturing

methods and systems introduction, lifelong knowledge acquisition, and deployment of latest

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technologies (Toma and Naruo 2017). In 1947, after the Second World War, Model SA, a

cheap automobile was introduced to the Japanese market and in 1950 Kiichiro resigned over

internal labour issues resulting in Toyota splitting into Toyota Motor Manufacturing and

Toyota Motor Sales. Eiji Toyoda (1913-2013) took over the mantle of leadership and his

ambitious move to replicate the flow production from Ford`s Rouge Plant was forstalled by

financial constraints and the small size of the Japanese market that forced him to adapt to the

imported technology (Tolliday and Zeitlin 1986). However, in 1954 Eijii implemented the

pull system flow production where components were provided from a preceding operation to

a following one. Furthermore, under his watch with the expertise of Ohno, TPS focused on

the reduction of muda which is waste and the rearrangement of the production line with the

backing of Noritsu Kyokai resulting in business consistency and resuming full operation

(Gronning 1997). Toyota benefited from the 1950 Deming teaching on how to utilise the

plan-do-check-act-cycle known as the Deming cycle or PDCA to progress quality and Juran's

explanation to the top and middle tier managers of their responsibilities to the quality control

system. The aftermath was the formation of six distinctive features to quality control that

separate Toyota and other Japanese organisations from the West including organisation-wide

quality control, enlightenment and training in quality control, circles of programme on quality

control, quality control audit, utilisation of statistical approach and national level promotion

of quality control. This is demonstrated in the Customer First, Dealer Second, Manufacturer

Third slogan which gave rise to the creation of additional distribution routes for varying

Toyota products. Nevertheless, the first attempt to penetrate the American automobile market

with the Toyopet Crown model failed (Burton 2015). Toyota persisted and had a

breakthrough in the late 1960s and early 1970s during the commencement of ever first oil

issues. Toyota Motor Company and Toyota Motor Sales Company joined in 1982 and became

the biggest producer in the automotive industry in 2008 (LeBeau 2009) which was

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maintained in 2015 (McGrath 2016). Figure 1 depicts pictorial milestones in Toyota's

products and major world events.

Figure 1:Toyota Trajectory history (Toyota Global 2024)

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2. TOYOTA ORGANISATIONAL PRACTICES

Toyota`s excellence is defined by the Toyota Production System (TPS) which is based on 5 Sakichi`s

principles, firstly TMC`s societal objectives are to develop and care for society and its country (Sato

2008). Secondly, is the unwavering drive to improve and innovate, and thirdly loyalty, integrity, and

simplicity. The fourth is that workers are members of Toyota`s family and conditions are made

favourable for them and the fifth is balancing business and integrity (Sato 2008). To this end,

complete muda (waste) elimination is foundational to TPS (Ohno 1988) and achieved by furnishing

the highest quality at the minimum cost and shortest time (Magee 2008).

Figure 2: The two pillars of TPS (Toma and Naruo 2017)

Womack [Link] (1991) in Figure 2 state that the TPS depends on JIT which means having the right parts

in the correct assembly line in the exact required amount and automation which is error prevention by

machines. Also, Toyota`s products are determined by customer needs. For example, Voxy si Noah was

made for people with special needs (TMC 2014) and its performance was judged by them (Liker

2004).

What is more, Toyota Leaders have always supported and championed TQM. Sato (2008) asserts that

they set and realised ambitious targets while assuming responsibility for errors demonstrated when

millions of cars were recalled (Isidore 2016). Furthermore, Toyota strongly believes in and practices

kaizen (Imai, 1986) which is based on process and outcomes, systematic reasoning and no finger-

pointing (Magee 2008). Also, according to Liker and Meier (2007), Toyota workers are thoroughly

selected, tutored and encouraged to be the best in their field. Toyota equally has a lifelong learning

habit exemplified by the study of the U.S. competitor (Sato 2008) and tackles issues based on genchi

genbutsu and genjitsu meaning fact (Sato 2008).

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3. TOYOTA ORGANISATIONAL CULTURE

Hoseus and Liker (2008) study shows that two models characterise Toyota's culture. The first is “The

Toyota Way 2001” which depends on Continuous Improvement and Respect for People shown in

Figure 3. Then Continuous improvement goes on the wheels of “Challenge” meaning thinking long-

term, facing risks and problems, and solving them. Others are Kaizen and Genchi genbitsu which are

non-stop improvements in all areas of the organisation, and seeking for ways to make the right

decision and striving to attain organisational goals. Respect for People has two sub-divisions Respect

and Teamwork.

Figure 3: The Toyota Way 2001 (Hoseus and Liker 2008)

Figure 4 represents the second model known as the 4P model including Philosophy, Process, People

and Partners, and lastly Problem-solving. Both models are important to Toyota's success with Total

Quality Management implementation (Boaden 1996; Hoseus and Liker 2008). Toyota`s staff wear the

same uniform, park in the same space and eat in the same place to demonstrate equality (Fang and

Kleiner 2003).

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Figure 4: 4P model of the Toyota Way (Liker 2003)

Also, mutual trust is an important problem-solving tool and managers are rotated around the

departments periodically to gain literacy on speed in delivery, work stabilisation, visualisation and

standardization (Hoseus and Liker 2008).

4. TOYOTA LEADERSHIP STYLE

Toyota`s leadership style is a family type of leadership where managers and staff have cordial

relationships and managers are regarded as teachers and team leaders (Trompenaars and Hampden-

Turner 1997). In addition, Hoseus and Liker (2008) believed that Toyota developed a unique

management design for the Japanese market after studying competitors. Furthermore, Toyota's

management seeks ways to encourage its quality vision in its overseas subsidiaries (Hoseus and Liker

2008) to produce cars relevant to each market (Direction 2008). Also, as a cost-saving measure,

workers beyond retirement age are offered new positions abroad to teach and train greenhorns and

foreign workers which has inspired workers' loyalty to the organisation (Direction 2008). What is

more, Toyota's leadership focuses on technological creativity and production system reform leading to

the production of high-quality vehicles at reasonable costs (Elsey and Fujiwara 2000; Direction 2008).

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5 TOYOTA ROADBLOCKS TO TOTAL QUALITY MANAGEMENT

The biggest challenge Toyota encountered in the implementation of Total Quality Management has

been in managing its business expansion (Camuffo and Wilhelm 2016). Toyota found it difficult to

maintain high training quality in the U.S. casual workforce especially when its Total Quality

Management practices are tacitly relying mostly on on-the-job knowledge transfer (Greimel 2010).

Also, Fackler (2007) reported that some foreign plants failed to comply with Toyota`s Andon cord

practice which detects product defects. Moreover, some of Toyota`s cost-cutting schemes are

unfriendly to TQM, including 1990`s removal of team leader positions (Shimizu 2004), quick

promotions of team leaders in France against the 10 years traditional period (Pardi 2007), the

Construction of Cost Competitiveness for the 21st Century (CCC21) which introduced dealing with

suppliers with no Kaizen knowledge (Chappell 2008), and reduction in number of automobile part

which mounted pressure on existing suppliers (Okamura 2005).

6 CONCLUSION

Having analysed Toyota`s rich TQM history, practices, culture and management style, shows

why Toyota is successful with Total Quality Management (Toma and Naruo 2017). However, Toyota

has encountered some bottlenecks in executing TQM.

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