Quality System

Of

Quratulain

BE-07-07

Year 2011 Project Assigned for Application of Total Quality Management Institute of Management Sciences, B. Z. University, Multan

Introduction and history:

Toyota is one of the world's largest automobile manufacturers, selling over 10 million models in 2010 on all five continents. A Top 10 Fortune Global 500 enterprise, Toyota ranks among the world's leading global corporations and is proud to be the most admired automaker, an achievement the company believes stems from its dedication to customer satisfaction. Toyota has been shaped by a set of values and principles that have their roots in the company's formative years in Japan. The Toyota story begins in the late 19th century, when Sakichi Toyoda invented Japans first power loom, which was to revolutionize the countrys textile industry. In January 1918, Sakichi founded the Toyoda Spinning & Weaving Company, and with the help of his son, Kiichiro Toyoda, he fulfilled his lifelong dream of building an automatic loom in 1924. Two years later, he established Toyoda Automatic Loom Works. Like his father, Kiichiro was an innovator, and during his visits to Europe and the U.S. in the 1920s, he became deeply interested in the nascent automotive industry. Making the most of the 100,000 that Sakichi Toyoda received for selling the patent rights of his automatic loom, Kiichiro laid the foundations of Toyota Motor Corporation (TMC), which was established in 1937. From looms to cars, the Toyota experience has been shaped by extending the boundaries of manufacturing.

W. Edwards Deming way:

Before there was a Toyota Way, there was the W. Edwards Deming way. If there is an enduring lesson in Toyota Motor Corp.'s recall fiasco, it is that the Japanese auto maker strayed far from the core teachings of Mr. Deming, the influential American statistician and quality-control guru. Mr. Deming was applying statistics to quality control. He would record product defects, figure out why they happened, work diligently to fix them, track how quality improved, and then keep refining the process until it was done right. Mr. Deming refined his ideas into what he called "total quality management," which later became the foundation of Toyota's now famous Toyota Production System of just-in-time manufacturing. TPS emphasizes consistently high quality, a relentless drive to eliminate waste and continuous improvement.

Mr. Deming, who died in 1993, played a key role in molding U.S. manufacturers into a powerful weapons-production machine during the Second World War. But it was in Japan that he made his mark. In the booming postwar years, U.S. manufacturers were far more interested in mass production than quality. So Mr. Deming took his ideas to war-ravaged Japan, where he found a receptive audience among Japanese manufacturers. Japan already had a tradition of hard work and attention to detail, and with shortages endemic, eliminating waste quickly became a national mantra. Even today, he's better known in Japan than in his home country. The Union of Japanese Scientists and Engineers still awards an annual Deming Prize to Japanese companies and individuals who make significant contributions to quality in manufacturing Mr. Deming spent extended stints in Japan in the 1940s and 1950s, initially working for the Allied command in Tokyo, and later as a consultant, teaching Japanese executives, managers and engineers about quality control.

Demings Points of Management:

His 14 points of management - a handful of which are summarized here - remain as relevant today as they were when he penned them: Get away from mass inspections by building quality into a product. Stop awarding business based solely on price, and instead focus on minimizing total costs, choosing suppliers based on quality and trust over the long term. Constantly improve production and service. Help people and machines and gadgets to do a better job. Drive out fear, so that everyone works effectively for the company. Break down barriers between departments so that people in research, design, sales, and production work as a team, enabling them to better foresee problems. Poor quality and low productivity can't be beaten with zero-defect slogans and targets because the solution lies in the system, not the work force. Remove barriers that rob hourly workers of their right to pride of workmanship by focusing on quality rather than sheer numbers. Remove barriers that rob managers and engineers of their right to pride of workmanship by abolishing objectives-based merit ratings. Toyota now acknowledges that it lost its way, focusing too much on growing big rather than building high-quality cars.

Toyota unabashedly set a goal of overtaking General Motors as the world's largest vehicle manufacturer, and it succeeded. Last year, it produced nearly 10 million cars, up from 8.2 million in 2010. Over that period, Toyota added 20 new plants around the world. But when the first inkling of a problem emerged, Toyota executives apparently weren't listening or didn't hear. Mr. Deming's teachings had apparently given way to other lesshelpful traits, including a reluctance of lower-level managers to deliver bad news up the command chain. The company's notorious flexibility had slipped into a reluctance to acknowledge failure. Toyota isn't alone in this. Managers everywhere could learn a thing or two, or 14, from the man who helped Japan become a global manufacturing powerhouse. Toyota is one of the best run companies in the world. With less revenue than the Big Three automakers, its market capitalization is still larger than that of General Motors, Ford, and DaimlerChrysler combined.

Toyotas Quality System:

Toyota's quality system involves seven primary features all along the supply chain.

Reduce setup times by reviewing and organizing procedures and enabling employees to set up their own stations; Produce in small lots to take advantage of the reduced setup time to broaden the capability to produce a variety of goods on the same line; Empower employees by continual training and adding responsibilities, encouraging them to treat other employees as customers and involving the team leader as one of the workers on the line; Maintain quality at the source through empowered employees who not only can detect problems as they occur but repair the problem, minimizing downtime; Maintain equipment as the primary means of maintaining quality, with workers at the source monitoring machines, thus in the best position to diagnose and repair as problems occur; Pull production through constant communication up and down the line, to deliver only the amount of material and work needed to keep the line flowing, minimizing inventory; Involve suppliers by training and taking responsibility to deliver their products to the main line with the same level of quality and efficiency that the main line strives for.

Why is Toyota successful? (The Toyota Production System)

Toyota is known for its reliable cars among the general public, but it has also been known in management and leadership circles for its unusual use of people. While most companies tend to make employee policies around the idea that people are lazy and expensive, at Toyota, labor strife is rare and people are an integral part of the quality process. The companys only strike was in 1950, and resulted in a commitment to mutual trust. Many credit Toyotas success to aspects of the Toyota Production System, established b y Tachi Ohno and Shigeo Shingo from the late 1950s through 1970 (when it gained the name). It includes aspects of Jidoka, just-in-time production, and kaizen, reducing both inventories and defects. The system is used worldwide, but is only one of the reasons for Toyotas success. Toyotas approach to automobile production, with its inherent quality controls, revolutionized the industry. Its just-in-time supply-chain concept has become a model for manufacturers around the world, and not just for automakers. The Toyota Production System (TPS) calls for the end product to be pulled through the system. This means the right parts reach the assembly line at the right place, just as they are needed, and with no excess. This approach represented a radical departure from conventional manufacturing systems, which require large inventories in order to push as much product as possible through production lines, regardless of actual demand. The idea of TPS, the contrary, is to produce only the products required in the precise quantities desired at a given point in time

Focus on flexibility
By basing production on demand rather than simply on capacity, Toyota manages to keep inventories, both of parts and of finished goods, to a strict minimum. But this is only one of the more obvious advantages of Toyotas unconventional approach. By focusing on smaller production lots and producing only what customers require when they require it, Toyota has developed a flexibility and responsiveness that continues to set the standard for the industry. With its Attention to continuous improvement (Kaizen), Toyota has attained diechangeover and machine-set times that are a fraction of its competitors. Thus its capacity for reacting quickly to new market trends makes TPS an ideal system in todays rapidly changing global business environment. Jidoka, a term loosely translated as "automation with a human touch," stems from Sakichi's Power Looms and operators. As problems occur, the machine stops either at the end of a

normal stage that produces a quality part or if a malfunction occurs, preventing defective parts from being introduced into the manufacturing process. Operators can monitor several machines at once. If one machine breaks, they can either repair that machine or alert a technician while monitoring other machines, which keeps the overall process flowing smoothly. It is not letting a defect go from one machine to the next, particularly in automated machinery; essentially, it adds the ability to detect unacceptable quality during the process of production rather than waiting until the end, when it may be hidden. The name itself is a Japanese pun on the term automation, adding the character for a person into the middle. Jidoka both reduces costs and increases reliability. It is also called Toyotas automatic error detection system flags the defect and enables line employees to take the necessary steps to resolve it on the spot even if that means bringing production to a halt. Only a system as agile and quality-oriented as TPS could make such measures economically possible. This approach not only helps eliminate waste, which makes TPS more respectful of the environment, it also means that customers can rest assured that Toyota products will conform to the highest standards of quality, reliability and durability. A big part of Toyota's success is that it applies "lean thinking" not just to products and manufacturing processes, but also to relationships with employees and customers. Indeed, Toyota has been an early adopter of HumanSigma, Gallup's process for measuring and managing the human difference in a company's performance. Toyota finds HumanSigma compelling because the process focuses on improving employee and customer engagement, which in turn drives business outcomes and increases shareholder value. Toyota's leadership in developing quality systems extends beyond the automotive industry into manufacturing and business in general. Industries from finance to health care have begun adopting Toyota's production system. Toyota has achieved quality in its processes through decades of continuous improvement. Its mission is to generate, as quickly and efficiently as possible, products that satisfy customers. Just-in-time production is the principle of having parts ready just as they are needed, rather than maintaining inventories across an assembly plant and in warehouses. Most people tend to focus on the cost savings from having less capital tied up in inventory under this system, but there is another advantage: engineering changes (to increase reliability or functionality, or to cut cost) can take effect much more quickly, since stockpiles of parts do not need to be cleared out; and problems with individual parts can be detected much more quickly since they are used closer to the time they are made.

The system was partly a result of Ohno and Shingo's observations of American production. They looked at Ford with an objective eye, and saw problems with Ford's treatment of people as machines at best, and enemies at worst. (Ford, at that time, had a hired army complete with spies which would invade workers' homes to make sure they were living as good Christians, and beat them if they were suspected of union sympathies or were caught in the wrong place at the wrong time.) Quite aside from the humanitarian issues which were perhaps inevitable in a company founded by a man idolized by Adolph Hitler, Ford did not use the knowledge or expertise of its workers. Toyota would lead the world in that regard. Ohno and Shingo also read the works of American and Japanese management experts, including Ishikawa, Deming, and Juran. They were impressed by the statistical quality control and quality circle approaches. Years before Pehr Gyllenhammar was to turn Volvo around, using similar techniques, Toyota organized around team development and cellular manufacturing. Using people as people, rather than ornery machines, also allowed for more flexibility than Ford's more automated approach would allow. This was to make rapid changes easier, also helping quality and increasing responsiveness to competitors.

The Human Touch

The most important aspect of integrating Toyota's quality system is the human element. Everyone in the company is not only encouraged but expected to participate in, contribute to and help develop the process. The quest for perfection is continual and never-ending. Problems and mistakes are not punished so much as highlighted as learning opportunities, and benchmarks to show progress along the continual path to improvement. This system also drastically affects labor-management relations. The workers dictate what they need in order to perform at peak efficiency, from raw material through procedural adjustments and equipment upgrades to skills training and professional development. Management provides assistance through supplying capital and developing, directing or providing instruction accordingly. Furthermore, more workers and supervisors collaborate on the line and develop specialized areas of expertise that pool together in problem resolution rather than adhere to a command-and-control hierarchy and arbitrary division of labor

The Toyota Way 2001

The Toyota Way 2001 is supported by the two main pillars of "Continuous Improvement" and "Respect for People" and can be summed up in the five key terms - challenge, kaizen, genchi genbutsu, respect, and teamwork. All Toyota employees, at every level, use these two values in their daily work.

To manufacture high-quality products and achieve customer satisfaction throughout the world, it is essential that TMC share the beliefs and values that it deems important with Toyota employees throughout the world. The Toyota Way 2001 gathers and organizes the management beliefs and values that TMC has handed down since its establishment. Based on mutual trust and respect between labor and management, long-term employment stability, and communication, each Toyota employee is taking measures to enhance workrelated skills and work ethic.

Labor-Management Relations
Based on Mutual Trust and Respect Mutual trust and respect between labor and management is a fundamental principle of Toyota's employee relations. Following a labor dispute in 1950, mutual trust between labor and management was adopted as the foundation of the Labor-Management Joint Declaration concluded in 1962. Also, in the Labor-Management Resolve for the 21st Century signed by labor and management representatives in 1996, mutual respect was added as a basic principle of labormanagement relations. Based on this fundamental principle, Toyota has adopted the Basic Principles of Human Resources Management.

Fundamental Stance on Human Resource Development

Toyota believes that "making things is about developing people". Thus, Toyota undertakes human resource development based on on-the-job training. Toyota also strives to create workplaces with abundant vitality while establishing and improving educational systems that focus on sharing and conveying appropriate values in accordance with the Toyota Way. Core Training: Work Methods that Put the Toyota Way into Practice Toyota Institute (TI) is an organization dedicated to promoting the implementation of the Toyota Way at overseas affiliates through the training of Toyota employees. The TI conducts core training at affiliates globally on work methods (problem solving and management expertise) so Toyota personnel around the world can put the shared Toyota Way into practice. Skills Training: Passing along Technical Expertise through the GPC to Employees Hired at Overseas Sites The Global Production Center (GPC) was created as a human resource development institution to raise the efficiency and pace of technical skills acquisition through technical training of employees hired at overseas sites. Veteran technical personnel from Toyota

plants in Japan gather at the GPC to develop and create training equipment for teaching technical skills, and training methods using manuals that employ animation, video, and other techniques, drastically reducing the time necessary for skills acquisition. Overseas GPC personnel who have received "trainer's trainer" certification currently conduct training on GPC methods at the regional centers in the U.S., U.K. and Thailand. Personnel Exchange and Training with Overseas Affiliates The Intra Company Transferee (ICT) program seeks to promote the global expansion of the Toyota Way and to develop human resources by having employees of overseas affiliates spend time working in Japan. ICT members work in Japan for between six months and three years receiving on-the-job training. The goal is to develop personnel who make a greater contribution to the development of the affiliates at which they work after returning to their home countries and regions. Toyota succeeded in building bonds of trust with employees. Even when the plant was running far below than capacity but no workers were laid off. Toyota has developed a corporate culture in which employees learn better and faster and receive a more comprehensive education than their competitors. It is a truly learning organization that continuously improves not only its work but also its management processes. GM has introduced its own Toyota-like production system with all the tools and methods, but failed to foster a culture rooted in a capacity to learn and improve. Back in the '80s GM lost a golden opportunity in the Golden State, where Toyota had carried out a virtual case study in TPS implementation and how to nurture such a culture. Toyota employees generate over one million process improvement ideas annually. The more astounding number is the fact that 90% of those ideas are implemented. There is no secret to why this occurs. Toyota executives have created a culture that encourages and rewards this behavior. Whether you are beginning or continuing your Lean journey, the transformation to a continuous improvement culture is vital to your success. Ensuring One of Toyota's Most Important Corporate Activities Employee Safety and Health Ensuring employee safety and health is one of Toyota's most important corporate activities. Toyota believes fundamentally that "safety is essential for sustaining and developing the company, and that placing safety first is everyone's responsibility, from senior executives to every employee at the workplace." Towards this end Toyota seeks the development of lively workplace environments that promote good physical and mental health.

Toyota and the environment

Toyota is fairly well known for having the best-designed hybrid-electric car, the Prius, which former Chrysler engineer Evan Boberg claimed in 2004 was the only car that actually saved fuel because of its hybrid design rather than coincidental features (such as lighter weight, efficient tires, and such). But Toyota's commitment goes much further. Their Australian unit's Earth Charter notes four principles:

Contribution towards a prosperous 21st century Aim for growth that is in harmony with the environment, and to challenge achievement of zero emissions throughout all areas of business activities and set as a challenge the achievement of zero emissions throughout all areas of business activity.

Pursuit of environmental technologies Pursue all possible environmental technologies, developing and establishing new technologies to enable the environment and economy to coexist harmoniously.

Voluntary actions Develop a voluntary improvement plan, not only based on thorough preventative measures and compliance laws, but one that addresses environmental issues on the global, national and regional scales, and promotes continuous implementation.

Working in co-operation with society Build close and cooperative relationships with a spectrum of individuals and organizations involved in environmental preservation including governments, local municipalities as well as with related companies and industries.

Toyota success today

Toyota participates in community activities, sponsoring educational and cultural programs as well as research.

Today, Toyota is the world's second or third largest manufacturer of automobiles in both unit sales and in net sales, and the #1 seller of retail vehicles in the US. In the United States, Toyota has roughly double the sales of Honda, and has replaced Chrysler Group as the #3 seller. It produces over 5.5 million vehicles per year, equivalent to one every six seconds. It is worth noting that, while German automakers tend to use symbols and numbers, and Americans tend to throw away names frequently, Toyota sticks by a name as long as a car is successful, and doesn't toss names onto cars that don't fit them. The Land Cruiser started in 1950; the Corolla in 1966; the Celica in 1970; the Camry in 1983; the 4Runner in 1984. Notable "dropped" names include the Corona (with its tendency to die from severe rust), Cressida (dropped for the introduction of Lexus in the US), unpopular pickups (T100, HiLux, Compact Pickup), and minivans (Van, Previa).

Toyota Motor Corporation today

In April 2002, Toyota adopted the 2010 Global Vision, a vision for meeting mobility needs in a way that respects our earth and all people. It is made of long-term policies centered on the basic theme of 'innovation into the future.' Four key themes based on trends seen as developing from 2020 to around 2030 are:

Toward a recycle-oriented society Toward the age of IT Toward a mature society (the decline of nationalism and war and the rise of respectful exchange of ideas) Toward motorization on a global scale (societies with little private transport gaining more)

These are linked to the pursuit of a new global image for Toyota with four key components: kind to the earth, comfort of life, excitement for the world, and respect for all people. The encompassing motto of "innovation into the future" is "working with passion and dedication to create a prosperous society."

Conclusion:
Toyota is one of the world's largest automobile manufacturers. It focus on quality of it manufactured products through different approaches like just in time approach, continuous improvement, jidoka. It has a view of keeping low inventories and small lot sizes in order to be give more attention to each and every part of its automobiles. Toyota is concerned about its employees and consider them as integral part of its quality process. It encourage them to participate and reward on good contributions, even the mistakes are considered a part of learning process.

Toyotas leadership has performed a major role in bringing it to such a success because iot developed a culture in which employees are treated as people rather than machines. Toyota is also focusing on ways to contribute towards communities and improving its production processes in order to save environment. Toyota is one of those companies that has successfully implemented the concepts of Total Quality Management.