Toyota Motors Corporation Quality Management and Operational Improvement in a Strategic Context

INDEX

INTRODUCTION……………………………………………………………………………………4

1.1. Background…………………………………………………………………………………………4

1.2. Module/Project Aims and Learning Outcomes…………………………………………………….6

METHODOLOGY…………………………………………………………………………………..6
DISCUSSION AND ANALYSIS……………………………………………………………………9

3.1. Background of Toyota Motors Corporation………………………………………………9

3.2. Toyota Motors Corporation Innovation and Product Development……………………..11

3.2.1. Innovation………………………………………………………………………..12

3.2.2. Product Development…………………………………………………………13

3.2.3. The company challenge and response…………………………………………14

3.3. Background of Quality Management and Operational Improvement at Toyota…………15

3.4. Quality Management Methods used by Toyota Motors Corporation……………………16

3.4.1. The Toyota Way………………………………………………………………16

3.4.2. Toyota’s approach to quality………………………………………………….16

3.4.3. Toyota and International Standard for Quality Management…………………17

3.4.4. Total Quality Management (TQM)……………………………………………19

3.4.5. European Foundation of Quality Management (EFQM)………………………19

3.4.6. Lean Thinking…………………………………………………………………20

3.5. Operational Improvement Methods used by Toyota Motors Corporation……………….21

3.5.1. Theory of continuous operations management and improvement…………….21

3.5.2. Kanban…………………………………………………………………………22

3.5.4. Toyota Production System (TPS) and Lean Manufacturing…………………..22

3.5.4. Kaizen…………………………………………………………………………23

3.5.4.1. Overview of Kaizen…………………………………………………23

3.5.4.2. Elements of Kaizen…………………………………………………23

3.5.4.3. Implementation of Kaizen………………………………………….24

3.5.5. Six Sigma Model………………………………………………………………24

CONCLUSION……………………………………………………………………………………..25
RECOMMENDATIONS……………………………………………………………………………26
REFERENCES……………………………………………………………………………………..27

EXECUTIVE SUMMARY

Toyota Motor Corporation has recorded significant growth despite its humble and challenging beginnings to become the largest car manufacturing industry as well as one of the leading car production and sales companies in the automobile industry. This has been attributed to the company’s commitment to embrace innovation and diversity in production development while at the same time devising timely and effective solutions to challenges that have posed threat to its continued growth. As a result of this, Toyota has continued to experience growth in both production and sales even at times of global financial crisis when most of its competitors were downsizing.

In addition, Toyota has managed to adopt various quality management and operational improvement methods that have gone a long way in making sure that the company continues to grow as a result of producing very high quality cars in a cost effective manner. For instance, the company has adopted the Toyota Way and Total Quality Management (TQM) as the methods for continued quality. Moreover, the company has also adopted various continuous operational improvement methods such as the Kaizen, Kanban, Toyota Production System, Lean Manufacturing and Six Sigma. Furthermore, the study hypothesis has been confirmed since it is evident that Toyota has adopted a wide range of quality management and operational improvement methods that have strategically positioned it in the global market.

INTRODUCTION

1.1. Background

With increasing competition on international markets and continued globalisation, many multinational corporations have nowadays focused on developing efficient methods of producing quality products through quality management and continuous operational improvement in order to maintain their competitive advantage on international markets (Davies and Drake, 2007). However, achieving this has been a nightmare for many multinational corporations that have recently been struggling to remain relevant on international markets as a result of stiff competition from their competitors who have effectively implemented quality management and operational improvement models and strategies. Therefore, for strategic positioning of multinational corporations on the global market, production of high quality products in an efficient and cost-effective manner through quality management and operational improvement models is inevitable. Thus, in this paper the topic which has been chosen for investigation is the quality management and operational improvement in a strategic context at Toyota Motors Corporation. Out of many multinational corporations, Toyota Motors Corporation was chosen for investigation in this case study since it is one of the few automobile companies that have effectively adopted quality management and operational improvement models. As a result of this, the company has continued to experience tremendous growth over the last three decades making it one of the leading automobile manufacturing companies worldwide (Asanuma, 1989).

The rationale behind investigating Toyota Motors Corporation’s quality management and operational improvement in a strategic context is to ensure that a succinct understanding of the models and strategies used by the company for consistent production of quality cars through continuous operational improvement is obtained. Quality management and operational improvement are the key strategic measures implemented by many successful multinational corporations in order to make sure that they maintain their competitive advantage on international markets (Davidow and Malone, 1993). This makes an investigation of these two crucial aspects of many successful companies, especially Toyota Motors Corporation very interesting. This is attributable to the fact that Toyota Motors Corporation is nowadays considered as the model company in the automobile industry since despite its humble and challenging beginnings, it has managed to effectively implement quality management and operational improvement models and strategies to become one of the leading automobile companies across the world by ousting many giants in the automobile industry. Therefore, it is worth to investigate the two key principles captured in the project topic such as: quality management and operational improvement, and particularly within a company which has managed to effectively implement them to become one of the global leaders in the automobile industry (Sake, 1992). The findings of this investigation would enable an explicit understanding of both quality management and operational improvement models at Toyota Motors Corporation.

The findings of this project will be of significant importance to anyone interested in quality management, operational improvement and the automobile industry as a whole. However, this project will particularly add value to automobile industry stakeholders including company owners, management teams, employees, customers, quality management and operational improvement consultants as well as prospective investors. This is because the project will outline the models of quality management and operational improvement adopted by Toyota Motors Corporation to emerge one of the most successful automobile companies globally. The project will also add value to stakeholders in other manufacturing companies where the quality management and operational improvement models implemented by Toyota Motors Corporation can be transferred. Moreover, the project will also add value to scholars and students interested in quality management and operational improvement. Finally, the proposition/hypothesis of this investigation is that, Toyota Motors Corporation has implemented various quality management and operational improvement models and strategies in order to remain successful on international markets while at the same time ensuring that it continues to be one of the leading car manufacturing companies in the world.

1.2. Module/Project Aims and Learning Outcomes

This project and the module in overall have several aims which include: critical examination of a variety of quality and operational improvement theories; critical examination of the impact of quality management and operational improvement on organisational practices and in particular Toyota Motor Corporation; to develop an understanding of the interrelation between quality management, operational improvement and strategy in a systemic manner; and to produce an investigation of the application of quality management and operational improvement theories, concepts and models at Toyota Motors Corporation. Moreover, at the end of this project and module, the anticipated learning outcomes are closely related to the aims since each aim translates into a learning outcome. Thus, this module and in particular the project will enable critical analysis, examination and evaluation of different approaches to quality management and operational improvement theories, concepts and models in general and in an organisational setting specifically at Toyota Motor Corporation.

METHODOLOGY

In order to ensure that this project was successfully carried out, a case study research method was adopted and it was made sure that the case study was descriptive and explorative in nature. The adoption of this research method was to ensure that adequate data about Toyota Motors Corporation’s quality management and operational improvement models and strategies was gathered in order to facilitate succinct discussions of these key aspects of the company’s success as well as enabling critical evaluations of the gathered information through descriptive analysis in order to explicitly decipher the applications of quality management and operational improvement models and strategies (Fisher, 2007). This is mainly because the case study research method adopted in this project was used as a strategy for empirical inquiry to enable investigation of the models and strategies of quality management and operational improvement at Toyota Motors Corporation. Furthermore, the case study research method adopted in this project involved collection of both quantitative and qualitative data as evidence to facilitate testing of the proposed hypothesis and making of conclusions (Neumann, 2000). There was no primary data collected in this investigation meaning the data collected in this investigation was entirely secondary data. This implies that during this project, no original, raw or field data also known as primary data was collected, but the gathered information was purely obtained from already existing data also known as secondary data (Bryman and Bell, 2003). Therefore, the project heavily relied on various references as sources of secondary data that was used as evidence. The secondary sources of data used include relevant websites mainly the Toyota Motors Corporation website and Energy Bulletin website while additional information was obtained by reviewing other secondary sources of data such as books, reports, as well as peer reviewed journal articles.

A case study research method was adopted in this project because it aimed at seeking to provide a description of models and strategies in context, detailed manner as well as holistically (Fisher, 2007). Practically, the choice for this research method was motivated by the fact that it forms a basis through which existing data can be organised in addition to looking and considering the situation under investigation as a whole. Moreover, case study research method is also the most appropriate research method in providing us with an explicit understanding of a complex phenomenon and is capable of adding strength or extending experience to the information which is already known by conducting a review of previous studies and existing information (Neumann, 2000; Swailes, 2001). This research method is also very crucial for this study because it emphasises on providing a detailed analysis of the results obtained from a limited number of conditions or events and establishing the available applications or relationships. Theoretically, case study research method has been widely used by researchers for many years across a wide range of academic disciplines. Researchers in business, in particular, have widely used this research method in the examination of contemporary business situations as well as providing the basis for applying opinions and ideas obtained through the adopted research methods (Bryman and Bell, 2003). Thus, this research method is the most appropriate to investigate a contemporary business phenomenon when there is no clear evidence of boundaries between context and the business phenomenon, and in order to gather evidence multiple sources of information are utilised (Swailes, 2001).

The use of web-based information is usually problematic since its reliability and credibility cannot be ascertained, but to overcome this challenge only Toyota Motors Corporation and Energy Bulletin websites were used in this project while the other information was obtained from books, reports, as well as peer reviewed journal articles. In order to ensure that the findings of this project provide reliable, credible and relevant information about the topic under investigation the evaluation of secondary sources of data used and the secondary data collected essential. For instance, the secondary data collected for this project was evaluated to ensure it satisfied certain requirements such as availability where it was considered whether the required information was available (Fisher, 2007). The secondary data collected was also evaluated for relevance to ensure it was appropriate and relevant for the case study period and not out-dated. Furthermore, accuracy of the secondary data collected was evaluated by examining the dependability of the secondary sources of data used. In addition, the secondary data collected for this study was evaluated to check its sufficiency where the available data had to be adequate in order to enable explicit discussion and critical evaluation (Swailes, 2001). Evaluation of secondary data retrieved for this project showed that it succinctly satisfied the above mentioned requirements.

DISCUSSION AND ANALYSIS

3.1. Background of Toyota Motors Corporation

Out of the numerous multinational companies involved in manufacturing and selling of cars across the globe, Toyota Motors Corporation is considered as one the global leaders in the automobile industry. Toyota Motors Corporation was established by Mr Kiichiro Toyoda in 1737 at Tokyo, Japan. Over the years since its inception, the company has undergone significant growth to become one of the best car manufacturing and selling company, and currently it is undoubtedly the largest and best automobile company in mass production of cars across the globe (Toyota Motors Corporation, n.d). Presently, Toyota Motors Corporation has over 317,000 workers worldwide. However, shortly after the World War II is when Toyota Motors Corporation came to limelight after it embraced more efficient and cost effective production methods through adoption of various quality management and operational improvement models and strategies leading to production of incredibly numerous cars that were of high quality and economical compared to it major competitors in Europe and U.S.

However, Toyota Motor Corporation initially began in 1936 as a subsidiary of Toyoda Industries, a company that was owned by Toyoda’s father. The company produced its first vehicle in 1936, the Toyota AA, while it was still associated with Toyoda Industries (Toyota Motors Corporation, n.d). However, the Toyota brand as it is currently known was established in 1937 as an independent company followed by subsequent change of name to Toyota. The implementation of name change was done to signify that work and home had been clearly separated as well as simplifying pronunciation of the new name. Toyota’s first factory was opened in 1938, but its operations ceased during World War II only to resume after the war ended (Toyota Motors Corporation, n.d).

Subsequently, the establishment of Toyota Motor Sales Company was done in the year 1950 after which it began production on the BJ Toyota Jeep, the SG small truck and the BX truck. Six years later in 1956, the company established the Toyopet chain, and the first vehicles that were sold under this name were the Toyopet SAs. However, in 1960s there was discontinuation of this product line because of the negative connotations that were associated with the words pet and toy (Toyota Motors Corporation, n.d). Moreover, during the same period in 1960s Toyota opened a new facility that enabled further research and development and also it established a prominent presence in Thailand. In addition, this period also coincided with the time when Toyota was celebrating its 10 millionth model production.

Later, in 1982 the Toyota Motor Company and Toyota Motor Sales formed a merger and the two previous companies became one company, which was named Toyota Motor Corporation. After the merger, Toyota Motor Corporation entered into a joint venture with General Motors which by then was referred to as the New United Motor Manufacturing Incorporated (NUMMI). As part of this deal, Toyota Motor Corporation began operations at a car manufacturing plant in Fremont, California. This opened the company’s door to venture into the vast American market. Lexus, which was Toyota Motor Corporation’s new luxury product line, was launched in 1989, and throughout the 1990s the company followed this by putting more emphasis towards designing, developing and producing more luxury vehicles, adding vehicles such as the Prius, Tundra, Scion and Camry sport to its product line (Dawson, 2004).

At present, Toyota Motor Corporation is one of the largest and leading multinational corporations in the design and development of hybrid vehicles targeting the commercial market across the world. As a result of implementation of research and development as well as quality management and operational improvement strategies, the company has achieved numerous cutting edge technological inventions and developments that range from designing of hybrid cars, robotics and then aerospace research. For instance, the company is currently working on improving the Prius plug-in hybrid car which is anticipated to be the most effective fully electric vehicle using lithium-ion batteries for the extension of its driving range. Furthermore, over the years Toyota Motor Corporation has also been involved in many social corporate responsibility activities particularly by funding numerous educational philanthropy projects including running and management of the Toyota Technological Institute since 1981, which has the responsibility of offering scholarships to students in high schools.

3.2. Toyota Motors Corporation’s Innovation and Product Development

Toyota’s innovation has enabled it to adopt efficient production processes that have improved and diversified its product development capacity making it Japan’s leading carmaker. This has also facilitated the presence of the company in over 170 countries across the globe. Moreover, the company’s innovation has enabled it to manufacture a variety of automobiles including cars, pickups, minivans, and SUVs models including Camry, Land Cruiser, Sienna, Corolla, 4Runner, and the luxury Lexus line. Also the company has enormous financial potency, as indicated by the company’s production and sales statistics in Japan between 2001 and 2012 shown in Table 1 below:

Table 1: Toyota Motor Corporation Production and Sales in Japan between 2001 and 2012

Year	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012
Production	4,046,637	4,138,873	4,244,667	4,454,212	4,611,076	5,085,600	5,119,631	4,911,861	3,543,199	4,047,343	3,483,464	4,420,158
Sales	2,291,503	2,218,324	2,305,635	2,387,556	2,368,817	2,368,706	2,261,515	2,153,197	1,996,174	2,203,849	1,783,521	2,411,890

Source: Toyota Motor Corporation

Some of the key factors that have contributed to Toyota’s success include: innovation, product development and its ability to address challenges facing automobile industry. Over the years Toyota has developed in a gradual manner to become a trusted brand on the basis of quality, for being eco-friendly and its first-class performance. The factors are discussed below:

3.2.1. Innovation

Innovation is a process which strives to take and turn creative process outcomes into useful work methods, services, or products (Betz, 2003). Toyota is a frontrunner in terms of innovation in the car manufacturing industry compared to its competitors. The company’s innovation is mainly process oriented because it was the first car manufacturer to embrace lean manufacturing through its tailor-made Toyota Production System. In addition, the company was also among the first ones to adopt smart automation and Just in Time manufacturing (JIT). Moreover, considering the company’s product innovation, it is evident that the company has significantly embraced innovation especially in the design and manufacturer of its hybrid electric vehicle, Prius.

However, since innovation in a company is not judged its products, there are other ways through which innovation in a company can be evaluated mostly its processes. This implies that innovation can be incremental, and considering that Toyota loudly reinvents itself every decade as well as making steady and incremental changes more continuously, it can then be safely concluded that Toyota strongly embrace innovation. This is mainly because it embraces innovation in its processes, product development leading to a lasting incremental innovation. Numerous workplace innovations have so far been made at Toyota, including the andon cord which allows any employee can stop the production line after detecting a problem. Toyota’s innovation can also be observed in the kaizen manufacturing method which facilitates continuous operational improvement. Through kaizen Toyota has managed to achieve significant organisational transformation through slow and continuous operational improvement rather than radical change.

3.2.2. Product Development

In terms of product development, Toyota is among the leaders in the car market considering the company’s latest models which are more economical and appealing leading to increased demand as well as improved loyalty to the Toyota brand (Clark and Fujimoto, 1991). This is attributable to the fact that Toyota has a reputation for the production of greener, first-class performance and more fuel proficient cars. Through innovative and improved product development, Toyota has being striving to meet government requirements like reducing emissions and the impact on the atmosphere as well as changes in economy caused by fluctuations in fuel prices of fuel. Toyota was the first car manufacturer to promote development and production of hybrid (gas and electric) fuel vehicle, with its Prius model been the earliest hybrid vehicle. In order to ensure the company continued with product development, it established manufacturing and sales subsidiaries across the globe to facilitate effective entry and penetration to global market. Toyota gained market competitiveness easily by first establishing its presence in Asia, Europe, US which are considered internationally strategic markets (Lowson, 2002).

Moreover, Toyota has adopted a worldwide manufacturing model. Thus, irrespective of car manufacturing sites being costly to establish because of the required initial fixed cost investment which is high, in the attempts of ensuring cheap product development, a significant number of Toyota’s manufacturing sites have been moved to countries with less factor costs (without comprising on the quality of cars produced) and currently the company manufactures diverse car parts and carries out car assembling in diverse locations across the world (Lowson, 2002). However, the quality of Toyota cars has remained top notch as a result of embracing different strategies of quality management and operational improvement.

3.2.3. Toyota’s challenge and response

Toyota Motors Corporation and the vehicle industry as a whole are facing great survival threats. According to Energy Bulletin (2007) oil accounted for 95% of energy used for transportation globally while other factors such as energy security, concerns over carbon emissions from combustion of fossil fuels as well as increasing cars and fossil fuels’ demand in emerging economies continuing to push oil prices high, all pose threat to Toyota. This is mainly because Toyota Motor Corporation and other car manufacturers are facing constantly increasing consumer group and political demands to develop more fuel-efficient cars in order to decrease carbon emissions. However, Toyota has partly addressed this challenge by leading in the production of hybrid vehicles as well as purely electric operated vehicles.

Increasing oil prices on global markets is making the number of consumers handling cars to continuously decline. As a result of increasing car operation costs due to increasing fuel costs, many consumers are opting not to buy personal cars. In Europe, this trend is encouraging car-sharing and seeking for alternative forms of transportation thereby altering demand for Toyota cars. However, Toyota Motor Corporation is striving to address this by developing and manufacturing fuel-efficient cars that are economical to operate.

3.3. Background of Quality Management and Operational Improvement at Toyota

At Toyota quality has always been recognized as one of the most important factors that affect customer satisfaction and necessary quality management and operational improvement methods have been implemented to ensure quality products are manufactured. To achieve total alleviation of quality deviations, various quality assurance systems were set up by the company across various divisions. Toyota Motors Corporation adopted the “Toyota Way” which comprise of a set of management principles in order to overcome problems of quality assurance caused by rapid globalisation. In addition, Toyota also adopted Total Quality Management (TQM) in 1961 to ensure efficiency in quality management (Davies and Drake, 2007).

On the other, operations are an important pillar which supports production activities and they are associated to the flow of operators and equipment. Operational management improvements have been the focus of the Toyota production system for long. This is mainly because operations consist of three major components such as preparation and after-adjustment, principal operations and marginal allowances. Toyota has for long recognised the importance of operational improvement and invented various methods to facilitate it such as Just in Time concept in 1938 with an objective of avoiding building up of too much defective stock which would have to be corrected or written off. The Toyota Production System is the second one and was developed after World War II as well as Lean Manufacturing, which is its generic equivalent both which act as the benchmark for manufacturing companies worldwide. Later, in 1961 Kaizen was then introduced by Toyota as a representation of the continuous improvement concept.

3.4. Quality Management Methods used by Toyota Motors Corporation

Toyota Motor Corporation has adopted various quality management methods and strategies to ensure that, production of high quality cars is constantly maintained. Some of the quality management methods adopted by Toyota include:

3.4.1. The Toyota Way

Toyota’s managerial values as well as business and operational methods are collectively referred to as “The Toyota Way”. The “Toyota Way 2001” was adapted by the company in April 2001 to express conduct and values guidelines that had to be embraced by all Toyota employees (Liker, 2004). Five principles of the Toyota Way are: challenge, teamwork, respect, Genchi genbutsu (go and see) and Kaizen (improvement). Moreover, it is also observed that, the Toyota Way has four components such as: a problem-solving process; adding value to the company by continuously developing its people; embracing long-term thinking as the management decisions basis; and recognising that continuous solution to root problems leads to quality improvement through organizational learning (Liker and Hoseus, 2008).

3.4.2. Toyota’s approach to quality

The reputation of Toyota as a producer of very high quality vehicles across the world has been achieved through its approach to quality assurance and quality control, which has been developed over many years and unique to Toyota. Toyota activities play a central role in customer satisfaction, and Toyota considers quality control and quality assurance as key parts of the company activities in economical production of high quality products, that exceed customer needs (Lieberman, 1994). Thus, in order to satisfy customer needs Toyota engages all its employees in activities of quality control all the times. Hence, every employee at Toyota always has two crucial tasks to play: their job duties and quality assurance. Through this approach, Toyota involves all its employees in total quality control by ensuring only the best work is allowed to proceed to the nest stage of production.

The company also use standard work and visual control as a clear indication of the current status of the products and in spotting quality problems easily as they occur. Toyota has been ensuring stability of quality and prompt detection of deviations from standard quality by strictly adhering to standardised work. Intelligent automation of production processes has been implemented at Toyota production lines in order to automatically stop them upon detection of an error (Lieberman, 1994). Moreover, Toyota also embraces teamwork in ensuring production of quality products. This has been achieved through andon cord which can be used by any team member to stop the production line after detection of an error or quality deviation. At Toyota it is believed that quality of finished vehicles depends on reliable supply of high quality materials and parts, achieved through establishing long-term and cordial working relations with all its suppliers to ensure consistent high quality supplies.

3.4.3. Toyota and International Standard for Quality Management (ISO 9000&14000)

Toyota Motor Corporation has been the benchmark for quality products production in the automobile industry. In the attempts of maintaining this global reputation, the company has gone ahead to apply for International Standard for Quality Management Certification as a way of ensuring quality and efficient operations are always guaranteed (Sake, 1992). These quality management systems have been playing a significant role in ensuring there is consistency in products’ quality standard. In particular, Toyota has so far been awarded ISO 9000 and ISO14000 certifications. As a result of Toyota’s continued attempts to provide the highest standards of quality products to its customers, it has not only strived to obtain new ISO certifications, but also renewing the ones that are out-dated.

Initially, since Toyota had TQM/TQC firmly in place it did not see any need for obtaining ISO9000/QS9000 certification, even though its subsidiaries in Europe and U.S. needed ISO 9000 for business purposes (Ishikawa, 2007). However, Toyota Japan eventually applied for ISO 9000/QS 9000 certification for “learning purposes”. In 1996, the engine division achieved ISO 9000 certification followed by the Hirose plant which in 1998 obtained QS 9000 certification (Withanachchi, et al., 2007). Subsequent renewals of the certification followed after each evaluation that was mandated. However, the ISO 9000/QS 9000 requirements were more than satisfied by Toyota’s TQM/TQS practices and systems, so the certifications were essential in reinforcing the practices and systems that existed at Toyota. In addition, in order to ensure suppliers maintained high quality management, Toyota established an ISO consulting team in the department of quality assurance to provide assistance to its suppliers (Ishikawa, 2007).

Effective quality management require not only production of high quality products, but also to ensure that the quality of working and surrounding environment is maintained high. Thus, in the last two decades environmental policies have being moving forward very fast. Therefore, apart from obtaining ISO 9000/QS 9000 for product quality, Toyota has also obtained ISO 14000 for environmental quality management (Withanachchi, et al., 2007). For instance, in 1998 the Design and Development Division at Toyota became the first among local manufacturers to obtain ISO 14000 certification due to its environmental management practices and systems. Moreover, in 1999 Toyota become the first multinational carmaker to achieve ISO 14000 certification for all its plants globally while during this time, Toyota also began to demand for all its suppliers to receive ISO 14000 certification. Subsequent renewals have been taking place to ensure the company maintains high quality working and surrounding environment through implementation of effective policies, practices and systems (Ishikawa, 2007).

3.4.4. Total Quality Management (TQM)

TQM comprise of a group of management customs in business, aimed at ensuring the organization meets or exceeds customer needs constantly. TQM put more emphasis on process measurement and controls so that constant development can be achieved (Davies and Drake, 2007). Thus, TQM is a complete and organization-wide attempt towards developing quality products. Toyota has been specifically using TQM to ensure high quality products and services are offered to customers. Therefore, in the entire process of TQM implementation, senior management authorises all management levels as well as with self management at worker level, to be handling quality system (Withanachchi, et al., 2007).

Therefore, at Toyota TQM focuses on constant development, joint effort, the means responsibilities are accomplished, recognising everyone responsibility at Toyota as well as viewing the company as an internal system whose aim is concentrated (Besterfield et al. 2010). Moreover, Toyota notes that TQM has direct benefits such as improving willingness, amplification of workmanship satisfaction amongst individual workers as well as enhancing sustainability resulting from extended time between equipment failures (Schonberger, 1987).

3.4.5. European Foundation of Quality Management (EFQM)

The EFQM Excellence Model is undoubtedly the widely used and the most popular quality tool in Europe, and thousands of organisations use EFQM Excellence Model to improve their quality management and performance. Thus, it supports members of many organisations to self-assess and reflect thereby leading to overall improvement in quality management. Despite, extensive use of the EFQM Excellence Model in Europe, it has been reviewed severally in order to make sure it reflects the world many companies operate in. As a result, many organisations have begun adopting it.

For instance, even though Toyota Motors Corporation has not directly adopted EFQM, most of the practices proposed by EFQM have been implemented at Toyota through the Toyota Production System, Kaizen, Six Sigma and the Toyota Way. For example, among the nine criteria for measuring excellence in a company consisted in the EFQM model, all of them have been achieved by Toyota through its other quality assurance models. The five “Enablers” of quality in this model such as: leadership, policy and strategy, people, partnerships and resources as well as process are succinctly implemented at Toyota. Moreover, the four “Results” of quality consisted in this model such as: customer results, people results, society results and key performance results are all comparable to Toyota. Thus, even if Toyota has not fully implemented EFQM Model, most of what consist in its nine criteria is present in Toyota quality assurance practices and systems.

3.4.6. Lean Thinking

Lean thinking is undoubtedly one of the most important models for effective quality management. Lean thinking achieves quality in a company by changing the management focus from optimizing separate assets, technologies, and vertical departments to optimization of the flow of services and products through entire value streams flowing horizontally across assets, technologies, and departments to customers (Maurer, 2012). Lean thinking model also referred to as lean manufacturing leads to elimination of waste along entire value streams and production processes, instead of at isolated points, thus leading to creation of processes that need less space, less capital, less human effort, and less time to manufacture very high quality products affordably, compared with traditional production processes and systems (Oakland, 2010).

Toyota is a model company when it come to lean thinking or lean manufacturing since after the company developed Toyota Production System, its focus has been to minimise waste as much as possible in order to give customer value by producing very high quality cars (Maurer, 2012). Adoption of the lean thinking philosophy to quality management saw the company steadily grow from a small company to become the largest carmaker worldwide. Lean thinking at Toyota has also been evident from its Kaizen and Just in Time systems aimed at achieving quality through continuous improvement. However, implementation of advanced production systems through automation and giving any team member a responsibility to maintain quality assurance have been key lean thinking concepts that have significantly reduced company wastage leading to production high quality and affordable cars thus resulting to customer value (Dale, et al. 2005).

3.5. Operational Improvement Methods used by Toyota Motors Corporation

Operations are an important pillar which supports production activities and they are associated to the flow of operators and equipment. Operational management improvements have been the focus of the Toyota production system for long. This is mainly because operations consist of three major components such as preparation and after-adjustment, principal operations and marginal allowances (Dale, et al. 2005). Operational management need to be carried out constantly with regular improvements on the operational methods for improved efficiency and increased cost effectiveness. Methods used by Toyota for operational improvement include: Lean Manufacturing, Kanban, Toyota Production System, Kaizen, Just in Time, Sigma Six, among others.

3.5.1. Theory of operations management and improvement

For any company, the value added by both operations strategy and operations management is fundamental and basic. The operational activities are essential in providing goods and services (Dale, et al. 2005). Operations management originated from the study of “manufacturing management” and “production”. Thus, operations management definition can be made in terms of the company’s design, operation and improvement of both external and internal systems, technologies and resources that facilitate creation and delivery of the company’s primary service and product combinations. This implies that the concept of operations management extends beyond the limits of manufacturing or internal production and through continuous improvement the quality is maintained high (Oakland, 2010). Currently, operational management and improvement encompasses other additional activities such as product and process design, purchasing, distribution, etc.

3.5.2. Kanban

Kanban is a technique aimed at achieving just-in-time, and its aim is to achieve timely delivery products and services (Bank, 2000). As a result of this, at Toyota Kanban is at the heart of the production line. For instance, production workers at Toyota begin to work themselves and embark on making their decisions individually concerning overtime work. At Toyota, the Kanban system is also used to clarify managers and supervisors’ roles. This leads to promotion of improvement in both equipment and work in order to eliminate wastage.

3.5.3. Toyota Production System (TPS) or Lean Manufacturing

The practical expression of Toyota’s customer-oriented and people philosophy is referred to as the Toyota Production System (TPS). However, TPS is not a company-imposed procedure that is not rigid, but following a set of principles tested and proven practically over many years (Ishikawa, 2007). However, TPS has been central to quality management and continuous operational improvement at the company and many of its ideas have been replicated all over the world. TPS is also at the heart of lean manufacturing to improve quality and minimise wastage (Lu, 1989).

However, TPS has three desired outcomes such as to provide Toyota members with job security, work satisfaction and fair treatment; to provide highest quality vehicles to customers at lowest possible cost, in a manner that is timely; and also giving the company flexibility to respond to the market, which facilitates achieving of profit through long-term prosperity and cost reduction activities. TPS strives to ensure there is absolute elimination of waste, unevenness and overburden in all areas thereby allowing members to work efficiently and smoothly. Standardisation forms the foundations of TPS to ensure a safe operation method and consistency in the quality approach (Maurer, 2012).

3.5.4. Kaizen

3.5.4.1. Overview of Kaizen

Kaizen is very important for continuous operational improvement at Toyota and it is at the heart of the Toyota Production System. According to Toyota processes human and mechanical tasks need to be precise and standardised to ensure maximum quality, waste elimination and improved efficiency. Both operation process and staff members at Toyota are required to undergo continual improvement. These day-to-day improvements achieved by employees and production processes are known as Kaizen (Oakland, 2010). However, Kaizen also means continuous improvement in every aspect of the Company’s activities.

3.5.4.2. Elements of Kaizen

The Kaizen at Toyota has five major elements that help in regulating the operations of the company such as management teamwork, increased management morale, increased labour responsibilities, and management suggestions for labour improvement as well as quality cycle (Bodek, 2010).

3.5.4.3. Implementation of Kaizen

The implementation of Kaizen has been central to the success of Toyota Production System, where every staff in the line is allowed to halt the production line in case they detect any error and together with their supervisor or team leader, suggest an improvement aimed at resolving the error or defect which may initiate a Kaizen (Bodek, 2010). However, for full implementation of Kaizen the PDCA cycles are used at Toyota where the cycle of Kaizen activity can be outlined as follows: standardising an operation and activities; measuring the operation (for the purpose of finding amount of in-process inventory and cycle time); gauging measurements against requirements; embracing innovation for meeting requirements and increasing productivity; standardising the new, improved operations; and finally continuing the cycle without ceasing (Bodek, 2010).

3.5.5. Six Sigma Model

Six Sigma model was developed by Motorola to extend on existing quality tools and techniques, but Toyota adopted it together with other operational improvement methods in a hybrid manner. The goal of the Six Sigma strategy at Toyota is to ensure there is improvement in the process outputs quality by addressing errors through variability minimization in the manufacturing process as a result of making sure that the production process can be expected to be statistically free of defects or errors at the Six Sigma confidence level (Barney, 1991). At Toyota, Six Sigma has been implemented via the “DMAIC” methodology, which involves the problem definition, relevant data measuring and analysis (i.e., statistical data), optimizing or improving on basis of the data analysis, as well as to control and monitor the implemented improvements to address quality concerns caused by any deviations from the optimized process (Pande, et al. 2009). Both Six Sigma and TPS philosophies employ process-based approaches to optimization of its operational processes and improving quality.

CONCLUSION

As it has been observed in the discussion and analysis presented in this paper, it is evidently true that Toyota Motor Corporation is undoubtedly one of the most successful car makers globally and the principles of success that the company has adopted to emerge the world’s largest car maker. However, apart from adopting quality management and continuous operational improvement methods, Toyota has also successfully adopted technological advancements and establishing of strong relationships with partners in order to continue building strong teams and growing together.

RECOMMENDATIONS

It is undoubtedly true that Toyota is one of the successful cases of effective application of quality management and continuous operational improvement. However, the company needs continued commitment to continue adhering to high standards of professionalism, quality control, quality assurance and continuous operational improvement. This would ensure that the company continues to produce very high quality cars more effectively and in a cost-effective manner.

However, there are several recommendations that can be adopted to make sure that Toyota continues to be a benchmark in quality management and operational improvement. These recommendations include:

In order to continue upholding Kaizen or continuous operational improvement on human and mechanical processes, Toyota needs to develop a comprehensive continuous professional development program.
For Toyota to achieve most from its quality management and operational improvement methods there is need to overcome the challenge posed by increasing oil prices. This is only achievable through increased production, marketing and sales of hybrid vehicles that do not need fossil fuel to operate.

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