Project Portfolio and Program Management: Toyota Case Study Report

This report presents a comprehensive analysis of project portfolio and program management, using Toyota as a case study. It begins by evaluating the strategic value of project portfolio management, exploring the situational context of Toyota, and analyzing its strengths, weaknesses, opportunities, and threats (SWOT). The report then delves into the findings from implementing project portfolio management, focusing on the application of total quality management to address issues like rising raw material costs and production quality. A detailed portfolio evaluation follows, examining methods like cost/value performance, strategic alignment, and continuous improvement. The report also explores portfolio management strategies, including inventory creation, project analysis, and alignment with strategic objectives. Furthermore, it discusses the maturity levels and corporate culture within Toyota, highlighting the benefits management lifecycle and the role of the project management office. The report concludes with an assessment of the challenges and successes associated with project portfolio management within Toyota's global environment, offering insights into the organization's strategic alignment, cost management, and overall project outcomes.

Running head: PROJECT PORTFOLIO AND PROGRAM MANAGEMENT
Project Portfolio and Program Management
Name of the Student
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Table of Contents
Introduction:...............................................................................................................................2
Findings from Project Portfolio Management:..........................................................................2
Situational Context:................................................................................................................2
Portfolio Evaluation:..............................................................................................................4
Portfolio Management:...........................................................................................................6
Maturity Levels:.....................................................................................................................7
Corporate Culture:..................................................................................................................8
Conclusion:................................................................................................................................9
References:...............................................................................................................................11

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Introduction:
The project portfolio management is some sets of disciplines of senior leadership
which help to maximize the value of the business and drives strategic execution by
optimization, selection and by the analysing the project investments which all are aligned to
strategies and goal of the business (Martinsuo, 2013). The project portfolio management can
manage the processes, technologies and the methods in a centralized manner which are used
by the project managers to manage and analyse any specific type of project which is based on
various key characteristics.
In this paper, the strategic value of project portfolio management and the project
management will be evaluated. Also, various applications of the project portfolio
management tools will be discussed in this paper.
To evaluate the strategic value of the project portfolio management situational context
of the selected organization will be evaluated. Following that portfolio evaluation will be
done. After the evaluation of the portfolio management of the portfolio will be assessed in
this article. Finally, the maturity levels and the corporate culture of the organization will be
discussed properly.
Findings from Project Portfolio Management:
The findings from the implemented project portfolio management on the organization
will be evaluated in this case. The project portfolio management was applied to the
organization Toyota, and in the following section, those findings will be shared.
Situational Context:
The swot analysis of the Toyota Company has shown that currently, the company is
having various type of weaknesses within their system (Gao & Low, 2014). Also, there are

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many threats which are the company is facing. This threat includes cost increase threats and
market competition threats. To manage these weaknesses and to mitigate the threats the
Toyota is currently approaching to the project of Total quality management. This approach
has helped the Toyota to be successful in their domain. The total quality management allows
Toyota to manage the production cost and the inventory (Goetsch & Davis, 2014). The
number of defaults has been reduced by the total quality control, and it has improved the
loyalty and the satisfaction of the customers. So it can be stated that Toyota is investing in the
right project.
The Toyota Company has introduced strategic alignment metrics in their current
environment of the organization. This strategic alignment metrics is a type of tool which
helps the project to determine overall strategic fits related to the project (Gerow et al., 2014).
Scoring is very much important for every project and using this tool of the strategic
alignment metrics scoring has been done here. The scoring technique has helped Toyota to
determine whether the project can increase the capacity or not and it has been determined that
Toyota can increase its capacity by introducing the approach of total quality management.
In recent times Toyota has faced various types of problem due to the rising price of
raw materials and fuels. The main problem they have faced is the quality production issue
(Kochan, Lansbury & MacDuffie, 2018). To tackle this situation Toyota has introduced
project portfolio management by the implementation of the total quality management and by
implementing this, Toyota is now executing very well. The introduction of the project
portfolio management assisted Toyota to remain competitive in the automobile industry. Now
Toyota is able to determine the profitable products and also able to cut the products which are
unsuccessful. This thing has helped Toyota to save a large amount of energy and time.

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In the current situation, while project portfolio management is applied to Toyota, it
will not be able to absorb all the changes instantly. The implementation of the total quality
management may lead to the organizational conflicts and organizational resistance in terms of
management of the human resources and operations in Toyota (Rahim, 2017). This can lead
to employee demotivation, poor performance and outcome of ineffective communications. It
can also affect the ongoing projects badly in terms of the efficiency of the project. To absorb
all the changes the organization needs sufficient amount of time and cooperation of the
employees of the organization.
The Toyota is now actually realizing the benefits which are promised by the
implementation of the project portfolio management. By the implementation of the total
quality management, Toyota is able to profit more which was promised before the
implementation of the project portfolio management (Killen & Hunt, 2013). Another benefit
is the effective cash management which is achieved through the total quality management.
Portfolio Evaluation:
The automotive giants Toyota has used the total quality management as the project
portfolio for managing its operations effectively. In this total quality management, Toyota has
used some specific methods to evaluate its overall project portfolio. This methods of
evaluation are the cost/value performance, strategic alignment and continuous improvement
(Clark, Silvester & Knowles, 2013). By using the value/cost performance method, Toyota can
understand the organizational money spending for the project portfolio which has been
initiated in this case. Also, this can help the Toyota to understand the returns of the project
and to compare the spending history of Toyota with the market rivals. In the second method,
the strategic alignment project’s overall strategic fits are determined with the implemented
portfolio. Scoring of the project is done by using this method (Costantino, Di Gravio &
Nonino, 2015). The method of continuous improvement is related to the operational

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efficiency of Toyota that can be achieved by overall project portfolio management. The main
benefit of this method is that it helps to identify the opportunities which can help to improve
the project in the portfolio.
The above methods of project portfolio evaluation are chosen in this case because all the
three methods have provided the basic needs which are required by the Toyota. Before
implementing the project portfolio, Toyota was facing difficulty in managing the profitability
and the cost due to the rising price of the raw materials and fuels. As Toyota was facing
difficulty in the cost management, cost/value performance method was implemented in this
case because it can efficiently manage the budget of the Toyota (Millar & Hall, 2013). Also,
Toyota faced huge financial loss in the automotive industry as for some major flaws in their
production line. Due to this major fault, the Toyota needed to call back its vehicles line up of
Camry and the RAV4 in the year of 2007. In the year 2011 Toyota again recalled 111,000
vehicles from the market which led to massive financial loss (Nkomo, 2013). Due to this
reasons, Toyota agreed to introduce the method of continuous improvement. The continuous
improvement method analysed the operational efficiency of the Toyota which helped the
Toyota to rectify its major fault in the production line (Bos & Millone, 2015). As the total
quality management was introduced in the Toyota, it was very much important for them to
analyse the efficiency of this total quality management. For this reason, the strategic
alignment method is used by Toyota. The strategic alignment evaluated the improved quality
in the product line by using the project efficiency of the project to maintain competitiveness
in the market (Kim & Kim, 2015), a decrease in the operating cost and increase in the
capacity of the Toyota. By analysing this, all this method actually analysed the value of the
project. Thus the use of these methods is justified in this case.
Using the above-discussed methods, Toyota is not going to face any type of serious
challenges. This is because Toyota is already operating in a global environment and by

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introducing these methods Toyota has solved several problems within the organization. Thus
it can be stated that is currently no challenges that Toyota will face using the methods in a
global environment.
The benefits management lifecycle works on the principle of identification, appraisal,
planning, realise and reviews which all work in a cyclic manner (Bradley, 2016). The
methods used by the Toyota for the evaluation consists all of these principles. So it can be
stated that the benefits management lifecycle was incorporated indirectly in the process of the
evaluation.
The benefits management is the process of the planning, identification, tracking and
measurement of the project investment until the realization of the projected benefit (Kerzner
& Kerzner, 2017). The benefit measurement ensures that the benefits that are desired are
specific, agreed, measurable, realistic, and most importantly time bounded. As the benefits
management is controlling all of these aspects of the project management, the benefit
management can ensure the successful goal deliveries of the project.
Portfolio Management:
The project portfolio management has clearly ensured that the collective projects of
the organization are completely aligned with the strategic objective of the organization. In the
first step the project portfolio management created inventory as a strategy. By creating the
inventory, the Toyota can identify all the projects which are the pipeline of the Toyota.
Toyota must ensure that these projects are within the strategic goals of them. The second step
by the project portfolio management is the project analysis which is in the pipeline of the
Toyota (Fair et al., 2015). Analysing will help Toyota to determine which project will
provide greater value to them. The third step of the project portfolio management is the
analysing which projects are aligned with the strategic objectives which are determined by

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the Toyota. For this step returns and the risks are determined in this case. The fourth step of
the project portfolio management is the role of management of the Toyota. The proper budget
should be allocated to the projects after the evaluation of the project for the proper execution
of those assessed projects. In the last step, Toyota must focus on the testing and adoption of
those projects. It is required because only the practical implementation will ensure that the
selected project will provide the desired results or not. By executing all the projects
mentioned above, Toyota is ensuring that all the collective projects are aligned with the
strategic objective of them.
The concept of the project management office has been introduced in this case of
Toyota. By the establishment of the project management office concept, Toyota can achieve
success in the key performance indicators of the project (Pemsel & Wiewiora, 2013). These
key indicators are the schedule, scope, quality, benefits and the budget. In this case of the
Toyota, it has been assessed that by the implementation of the project portfolio management
the organisation is improving these key indicators. Thus it can be stated that the project
management office concept has been introduced in this case. Moreover, that as Toyota has
successfully standardised the assessed practices in this case which has increased the success
rates of the project.
The Toyota is currently using both of the qualitative and the quantitative approach of
tools for managing the portfolio of the project. In the current situation these tools are very
much effective in the management of the project portfolio. The tools or the methods used by
Toyota is the cost/value performance tools, strategic alignment tools and the tool of
continuous improvement.

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Maturity Levels:
The maturity model can assists the organization Toyota by the implementation of the
high level of organizational behaviour. It also, improve the success of the project and
improve the performance of the organization (Falessi, Shaw & Mullen, 2014). The maturity
models are currently having a total number of five levels. As Toyota is facing problems in the
management of the cost, it has been assessed that at the level three or the level defined
Toyota will look at terms of the approaching to the project portfolio management. It is
because of that the standard processes of the organization is established in this level and
improved over the time.
The best practices which can be adopted for improving the maturity level of Toyota is the
awareness of the process, process repeatability, process definitions, management of the
processes and the optimization of the processes. The model, in this case, is the PRINCE2
model which will be the appropriate one.
To implement this changes some internal help is required from the organization. First
of all, for an unaware organization, the creation of awareness among the whole organization
is the first requirement, and for the implement, this changes organizational support is required
which includes the support from the colleagues as they might create the main problem in
implanting this practices.
Corporate Culture:
The corporate culture of Toyota is very much success because they have applied the
Japanese corporate culture and the mechanism of the decision-making. Using these two
factors, Toyota is able to analyse the crucial factors of each of the decisions which are taken
on the manufacturing plants. The process of the decision making brings transparency to all of
the decisions made by Toyota (Kelley, Cranor & Sadeh, 2013). Thus it can use the

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mechanism of the recall for solving the problems. In terms of influence cultures of the Toyota
will impact several internal stakeholders in a different way. As an example, the HR manager
will be influenced more than the facilities and technology manager in terms of transparency
in the organization.
The process of the project portfolio for the selected project is running very well.
Though it is running well, improvements can be done by the initiative of the change
management and the benefits realization. These can help to improve the prospective area of
stakeholders. The main concern the stakeholders might express is the marketing condition of
the Toyota. Though Toyota is one of the major organization which does innovation with their
products but still the market competition for Toyota is very much tough.
The corporate culture of the Toyota Corporation will support the project of the portfolio and
the criteria of sustainability by handing and supporting the projects in various aspects. These
aspects are the training, governance, process orientation and roles and responsibilities. When
the organization’s corporate culture manages the processes of Toyota in a good way, it
actually becomes a success factor of the project (Eccles, Ioannou & Serafeim, 2014). Thus it
will support the management of the project portfolio and the sustainability criteria. The
governance and the training also have some contribution to the management of the project
portfolio.
The Toyota Corporation has implemented the project portfolio in a very good way so
that in current situation this organization is not facing any type of issue in their production
line. Implementation of this project portfolio of the total quality management helped Toyota
to control its production line, and it also helped to achieve perfect cost control. In such a way,
this portfolio management has helped to gain sustainable development in the organization of
Toyota without facing any type of big challenges.

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Conclusion:
From the above discussion, it can be concluded that project portfolio management is
introduced in the various organization for reducing the inefficiencies which occur in the
project due to several risks and weaknesses of the organization. The project portfolio
management helps to eliminate this type of risks and threats thus it improves the efficiency of
the organization. In this case, the analysed organization is the Toyota Corporation which is
the biggest organization in the automotive industry. There is several criteria for implementing
this project portfolio management perfectly within the organization. In this case, the Toyota
Corporation has implemented total quality management of the project portfolio. One of the
criteria for implementing this project portfolio of the total quality management is the creating
awareness among the organization about this project portfolio which has been done by the
Toyota Corporation properly. Before implementing the project portfolio management, Toyota
was facing various types of issues in their organization due to the high price of the raw
materials and the fuels. Toyota has also done mistakes in their production line, and due to this
fact, their line-up of the RAV4 and Camry vehicles has been recalled by them. From the
market statistics, it has been found that the Toyota recalled a total number of 181,000
vehicles from the market due to the fact of abnormal noise and leakage in the fuel injection
process which cost Toyota a huge loss. Implementing the project portfolio management
helped the Toyota Corporation to overcome this issue by improving the production line and
by decreasing the operating cost of the organization.

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