Best Practices and Quality Management Techniques at Toyota

This study explores the best practices and quality management techniques followed by Toyota in the auto-mobile sector. It discusses their focus on customers, strong leadership, continuous learning, decision making based on facts, and investment in workforce. The study also covers the analytical frameworks used by Toyota and the approaches of quality management that improve their operations.

BUSINESS OPERATIONS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Best practice techniques followed at Toyota..........................................................................3
Analytical frameworks in manufacturing organization..........................................................5
Approaches of quality management which improves the effectiveness of operations in Toyota
................................................................................................................................................7
Quality management techniques of Toyota and reason for using it.......................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
The study is on best practices followed and quality management techniques being
implemented in auto-mobile sector. These can be said as practices or approach followed by a
company showing its philosophy of decision-making and efficient utilization of its resources
which prove beneficial for the organization. Toyota is the company being studied here which is a
Japanese auto-mobile firm having its headquarters at Toyota, Aichi, Japan and founded in 1937.
The best practices and analytical frameworks used by managers to help business effectiveness in
the organization. The approaches and techniques of quality management which help improve
operations in the company have also been discussed.
MAIN BODY
Best practice techniques followed at Toyota
The practice techniques followed at the company are:
a)Focus on customers: The company is concerned about its receiving way from customers, and
they have always followed a policy of 'customer first' by taking feedback. Toyota has established
customer care centres worldwide, and they always take customer views in consideration as to
how the public has responded to a product and whether they have queries regarding its
functioning and any such issues. Toyota values the customer feedback in a way that it uses their
suggestions to incorporate changes in new improved version of its auto-mobile. This creates a
long term relationship with the customers as they also realize the company values their
suggestions (Thompson, S., 2017).
b) Strong leadership: The former and current presidents of the company have been motivating
and encouraging as a leader to the employees. They have focused on innovation and always
maintained that the company should be following the best standards for maintaining quality.
They have applied a principle of nemawashi, a term which means a process of achieving
consensus on problems and identification of potential solutions with affected people. The
organization under them has also learnt to accept its mistakes to the public and had called back in
service millions of cars for making appropriate changes (Coe, Wiley and Bekker, 2019).

c) Learning continuously: Toyota has continuously learned new techniques by its significant
persons going round in America and Europe and study the advanced technology prevalent there.
This has helped them to make necessary improvements in their new launches with giving
customer a better and rich experience. Toyota has its own training centre imparting knowledge
and runs various training programmes in which programs for foremen, improvement programs
and programs based on skills are prominent. These programs are conducted by experts in the
corporation who serve as teachers to other employees and thus enhance their on-job growth.
d) Decision making based on facts and betterment for society: Toyota has always considered
the financials before taking a decision. The company follows three approaches: actual object,
actual site and facts. It thus reduces the chance of errors and helps in making a sound decision. It
also has helped company save costs and use the money elsewhere in company's operations.
The company's decisions are also based on betterment for society and not only benefiting
the shareholders. Toyota has a moral compass for strategic decision-making and wants its
training programmes regarding production system for other competitors to benefit the whole
community (Thompson, S., 2017).
e) Investment in Work force: Toyota has its own manner of recruiting and staffing. An
assembly worker recruitment usually takes up to 14 months of time to get recruited fully. Once
the company has hired the best, the employees find it easy to stay on for a long time. The
training and atmosphere given to the employees is suitable and rewarding as it makes confident
professionals who are also promised job safety. Even during financial crisis faced in past
decades, company has not made any full time employees redundant. Toyota also has its own
university imparting education and giving the company high skilled engineers. Thus, they see
education for employees as an investment and not costs. Employees also strive for growth as the
company makes promotions internally for managers and this motivates employees to work
better. In Toyota, team effort is rewarded instead of individual employees which makes people
work in unison to make their team win.

Analytical frameworks in manufacturing organization
One of the analytical framework which can be used is SWOT analysis which discusses
company's internal factors and external factors influencing the organization. Toyota's SWOT
analysis is as follows:
Strengths
Toyota has maintained its position as one of the top auto-mobile manufacturers in the world.
Toyota has a strong brand image and people have high faith in its products. The company being
having presence globally has a wide distribution chain and its presence is in many countries.
Toyota has always focused on innovation in its products and taken continuous feedback to
incorporate changes in its new models launched (Baines and Armstrong, 2018).
Weaknesses
Toyota has a hierarchy based organization structure thus it makes difficult for the employee
grievances to be solved and require more time thus delaying the process. There had also been
product recalls a few years ago which leads to a weakening in reputation for quality products.
These involve time and costs which can be used for product distribution instead. Product trials
need to be done first before arrival of it in the market.
Opportunities
Toyota has opportunity to expand its operations in developing countries which can serve as a
growing market as people are also experiencing a rise in purchasing power. There is also a
demand for fuel efficiency in cars which Toyota has a niche for making. This will also stand as
an eco- friendly measure for the company promoting the environmental concern. Company's
innovative techniques of using advanced electronics is also something which is looked out for
(Bernstein and van der Ven, 2017).
Threats
Toyota faces market competition from low cost competitors from other Asian countries. Toyota
has to increase further on its innovation to maintain its customer range here. Toyota has also
been facing competition from rapid innovation from competitors like GM, Honda. It will have to

increase its budget on product research and continue its policy of incorporating feedback changes
in the new models.
Another analytical framework which can be used is Porter's five force model which
describes the five external factors who help the Toyota in examine the important directions of the
company. Apart from various challenges and issues, Toyota is able to remain at the top position
in the auto-mobile industry (Stindt, 2017). Below is the detailed five force analysis of Toyota
are:
 Bargaining power of buyers: The Toyota customers directly affects the business
through revenues. This particular force shows influence of buyers on business operations.
Low switching costs as if the consumers find any product expensive, they can easily
switch towards the competitor's product, high quality of content and moderate substitute
convenience are the major external factors which contributes towards the bargaining
power of buyers in the environment of auto-mobile industry. In this section of the
Toyota's five forces analysis, the united effect of these external factors is the strong force.
Company needs to be assured that the product the organization offered to is customers
will match the tastes and preferences of its target consumers in the marketplace.
 Bargaining power of supplier: The major aim of the Toyota suppliers are to persuade
the enterprise to improve their business operations. Restricted population of suppliers
creates a moderate force that helps in influencing the Toyota. The bargaining power of
the company is higher when the suppliers are very few. High overall supply and low
forward integration of suppliers are the external factors which bring the weak force of
bargaining power of suppliers.
 Threat of new entrants: New entrants are basically the competitors of the company that
threaten the business (Zhang, 2020). However, Toyota faces the weak threat of new
entries. The entry barriers are the high cost of maintaining and growing a new firm in the
industry. This barrier weakens the threat of new entrants in the market for Toyota. Thus,
this part of the five force analysis shows that the threat of new entrants is the least
concern for Toyota while growing its business and maintaining its top position in the
market.
 Threat from the substitute products: Substitutes somehow affects the enterprise
business as it is relatively easy for consumers to shift from Toyota to substitutes.

However, the substitutes are moderately available in the market. In some areas, the
substitutes are unavailable. So, in this part of five force analysis of Toyota, the
combination of external factors creates the moderate threats of substitute products. For
maintaining the company in the market, company have to address the demand of the
consumers by making the products more accessible, affordable and convenient.
 Rivalry from existing players: Generally, auto-mobile firms are competitive against
each other in terms of innovation and marketing (Klochkov, 2020). Toyota also competes
with variety of competitors who are different through cost, fuel efficiency, brand image
etc. There are many competitors available in the market but the firm competes with only
a few large firms. Thus, this part of force analysis shows that the company must have a
complete and broad strategies in its operations which addresses the strong force of
competitive group action.
Approaches of quality management which improves the effectiveness of operations in Toyota
Quality management is the action of visual perception of all actions and tasks that must
be accomplished to maintain a desired level of excellence (Wesonga, 2018). This includes the
discovery of quality policies, ways of creating and implementing planning, control and further
improvements. Below discussed are the major approaches of quality management of Toyota are:
 Continuous improvement: Continuous improvements also known as the Innovation in
the company through improvements. All the employees of Toyota belief that the
organization must have a nature or desire for repetitive improvement since beliefs creates
innovation. Kaizen is the substance of continuous improvement in company. It is a
manner of thought process which promotes and authorize everyone to identify where and
how small changes can be made to benefit the business, teams and the individual
performances in an organization. Going to the source or Genchi Genbutsu is also in the
Toyota which shows the facts about checking yourself to make sure individual have right
information required to make a good decision in the establishment. Toyota confirms that
when they grasp a challenge they became sure about how to complete that challenge
within the time frame. This means that the firm have to deal with each and every
challenge not only with creativity but also with full courage. The reason for using this
approach is that the company believes that “Good is never good enough”. This statement

is not only for their products but also for their team members experiences. To achieve this
aspect, organization have to adopt this in their culture.
 Focused towards consumers: Toyota ensures that all of their employees must think
towards the tastes and preferences of consumers and continuously strive to create
customer satisfaction. Company ensures that they are committed to deliver the highest
quality and providing complete customer satisfaction by constantly improving the
products and services within their organization according to the needs and expectations of
the consumers. For Toyota, the consumers are the primal priority. Firm have designed
effective procedures so that when a customer faces any problem, they can easily able to
access the issues and put things right with the lowest degree of inconvenience caused to
its customers. The reason of this approach is to maintain position in front of its
competitors in the marketplace.
 Total participation: Self discipline and total optimization are the major factor for
Toyota. Institution gives assurance that all of their employees fulfil their respective roles
properly and will intensify their responsibilities towards their work through exercising
creative thinking and independence. Toyota's original manufacturing philosophical
system aims to eliminate waste and achieve the best possible efficiency often known as
lean system. The reason behind this approach is to fulfil the complete responsibility
towards the consumers, environment, business, employees etc.
Quality management techniques of Toyota and reason for using it
Quality management techniques involves the planning and controlling activities to
guarantee that the service and commodity fit for the purpose (Jermsittiparsert, 2019). The quality
of the product describes the image of the company and also bring the customers towards the
institution. There are many techniques that have been used by the Toyota, some of them are:
 Six sigma technique: This is a traditional technique of quality management and used
widely in mechanical and electrical industries (Pramono, 2018). In this technique the
focus of the organization is on the quality betterment of product by getting rid of defects
means a hurdle in the quality. Six sigma leads to a high performance culture and
employees to know there full strength. This technique helps Toyota to contribute

creatively in gaining profitability, market share, high-productivity and maximum
customer satisfaction level.
 Top down and bottom up technique: This technique shows effective results in
organizations. In this technique the information are passed from top to bottom level and
also from bottom to top-level. In Toyota the company shares the information from top
hierarchy to bottom level and from lower hierarchy to upper team members about the
work done and quality measures. The reason for using this technique is to maintain the
quality of the products and services by coordination with each level to deliver excellent
product and services to its consumers.
 Cost of quality technique: It is the technique of measuring difference between cost of
manufacturing of a product and cost incite without any defect during the production. The
main idea of this technique is to make the product inexpensive and free from any defects.
The managers of Toyota basically focus on cost reduction and quality improvement so
that it will give benefits to the consumers as well as the organization. This technique is
new and innovative and this is the major reason why Toyota adopts this technique in their
working culture. And for this skilful persons have been hired by the company to prepare
the charts and accounting. MNC like Toyota uses this technique on a wider scale.
CONCLUSION
From the above study it is concluded that quality management ensures high quality of
products and services by getting rid of defects and integrating improvements in the system. High
quality products brings loyal and satisfied consumers who bring more new customers along with
them. Enhanced brand value, higher productivity levels, ensures long-lasting efficiency, reducing
risks are some of the importances of quality management. This project includes the
demonstration of best practices commonly used by Toyota. With the help of focusing on
customers, strong leadership, continuous learning ability, decision-making on the basis of
betterment for the society and investment in work force, the company is able to maintain its
image in the market space. Analytical frameworks such as SWOT and Porter's five force analysis
is also well explained in this project to give broader perspective and understanding about the
working capabilities of the chosen manufacturing organization. In addition to all the above, the
quality management approaches and various techniques which have been used by the Toyota in

their organization to satisfy customers needs and preferences and even their employees as well
has been explained in detail to provide throughout understanding about the working style of the
manufacturing organization.

REFERENCES
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techniques and system effectiveness on the green supply chain management practices.
International Journal of Supply Chain Management. 8(3). pp.120-130.
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management methods. International Journal of System Assurance Engineering and
Management. pp.1-10.
Pramono, and et.al., 2018. The Use of Quality Management Techniques: The Application of the
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