Strategic Quality and Systems Management of Toyota: A Case Study

Desklib provides past papers and solved assignments. This report analyzes Toyota's strategic quality management.

1
STRATEGIC QUALITY
STRATEGIC QUALITY AND SYSTEMS MANAGEMENT OF TOYOTA
Student’s ID
University Name:
Author’s Note:
Submission Date:

2
STRATEGIC QUALITY
Executive summary
Managing an organisation requires attention in many of the organisational aspects. Among
these organisational aspects, management of quality and operations is very crucial for gaining
success and respectful position in the market. Toyota motors have been one of such
companies, which have been a leader in case of quality and operations management. It has
been using various theories and strategies for facilitating better management of quality and
operations for acquiring its desired business objectives.

3
STRATEGIC QUALITY
Table of Contents
Introduction of the selected organisation along with the details of quality management
system, currently used in the organisation.................................................................................4
Determine the significance of efficient operations management and management of quality in
order to meet the objectives of the organisation (AC 1.1, 2.1)..................................................4
Assess the accomplishment of the current process of management of operations and
management of quality, in attaining the objectives of strategic management in the selected
organisation (AC 1.2, 2.2)..........................................................................................................6
Examine the require for strategic quality change and review the factors that drive the need for
the strategic quality change......................................................................................................12
Assess the resource implications for not responding to these changes....................................13
Plan a strategic quality change and apply it to get better organizational performance............14
Design systems to monitor the implementation of the planned strategic quality change........16
Define the systems, tools and methods to hold up the business processes implicated in the
quality change process. (AC 3.1, 3.2, 3.4, 4.1, 4.3)................................................................17
Assess the wider implications of quality change on the company performance in terms of
external perspective and the effect on people, systems and functions influencing presentation
in the business..........................................................................................................................19
Quality culture in Toyota and an effective quality culture to ensure continuous monitoring
and progress (AC 4.2)..............................................................................................................21
Assess the final results of strategic quality change and provide recommendations for making
improvement in the areas of strategic quality change, which aligns with the objectives of the
organisation (AC 5.1, 5.2)........................................................................................................24
Conclusion................................................................................................................................27
References................................................................................................................................28

4
STRATEGIC QUALITY
Introduction of the selected organisation along with the details of quality management
system, currently used in the organisation
In any kind of organisation, managing operations is one of the most crucial and difficult part
to handle. It helps in acquiring the organisational and business objectives. However,
operations management in an organisation should not always be the same. They need to be
updated and upgraded time to time for meeting the changes in trend and demands of the
customers. For this particular report, the organisation selected for better understanding of
concept is the Toyota motor company. Toyota is a leading organisation that has gained wide
fame across the globe. The organisation has gained success because of its good quality of
products and services. This Japanese automotive company is headquartered in Aichi, Japan.
Toyota motor company was found by Kiichiro Toyoda in the 1937 on 28 august. Toyota is
enlisted among the top six highest revenue-grossing companies of the world. Not only this,
Toyota has also been the leading companies to manufacture hybrid cars and has been praised
and recognised for its unique operation management techniques.
Toyota motor company has been a leading organisation in context of its superior quality
management systems. The concept of TQM i.e. total quality management is best used and
followed by Toyota for its operations management. The automotive company is also famous
by its title of the king of quality management (Barratt et al. 2011). The current existing
quality management system of Toyota directly addresses the concepts and principles of Total
Quality management. The extraordinary contribution of Toyota in quality management has
been recognised many times and the automotive company has been rewarded for their
effective quality management system.
Determine the significance of efficient operations management and management of
quality in order to meet the objectives of the organisation (AC 1.1, 2.1)
Significance of operation management in Toyota
According to Kim et al. (2012), Operation management refers to the process of handling and
managing the various production related operations and activity for better accomplishment of
the organisational goals and objectives. Through effective operation management, Toyota
ensures that the demands and requirements of the customers are fulfilled accordingly. This
helps in providing utmost satisfaction to the customer, which in turn helps in growing the

5
STRATEGIC QUALITY
business of Toyota. The motive of operation management in Toyota is to enable efficient
business operations of the organisation (Subramanian and Ramanathan, 2012). Toyota applies
several theories and philosophies in its operation management for provision of quality
products to the customer as well as successful completion of organisational tasks. From the
opinion of Christensen (2014), through appropriate operations management in Toyota,
optimum utilisation of resources is ensured. This helps in eliminating any kind of
unnecessary wastage of resources. However, through proper utilisation of resources and
prevention of unnecessary wastage, the cost of waste control and disposal is discarded. This
helps in saving a decent amount of capital, which can be invested in other significant areas of
operations management (Goodale et al. 2011). The operation management in Toyota is
enhanced through including six sigma approach, lean production and appropriate supply
chain management.
From effective operation management, the processes like production of goods and
distribution of goods and products can be facilitated efficaciously. Through proper operations
management in Toyota, the requirement of resources and the capacity required can be
assessed easily. Toyota uses Jidoka concept in its operations management for bringing
accuracy in its operations management. The Japanese term Jidoka stands for automation.
Therefore, majority of operations in Toyota are operated through automation (Kurdve et al.
2014). However, human guidance is also provided for bringing more accuracy in the
production system. In this way, Toyota motor company achieves its organisational goals and
objectives by effective operation management.
Significance of quality management in Toyota
As opined by (Kotter, 2012), Quality is included in the operations of Toyota by practicing
several quality management theories. Theories and concept like Kaizen theory, TQM (total
quality management), lean production method and just in time approach are used for effective
quality management in Toyota motors. Through effective quality management, business
standards are increased in the organisation, which helps in enhancing the position of the
organisation in the global market. With the help of effective quality management in Toyota,
the loyalty of customer is ensured for present as well as for future days. It also helps in
retaining the lost customers and gains the new target customers of the organisation. Toyota
improves quality in its products through innovative and creative ideas (Goodale et al. 2011).

6
STRATEGIC QUALITY
Bringing innovation in quality management is one of the key factors for the successful
structure of quality management system of Toyota.
Toyota makes and produces its automobiles and vehicles, by making sure that both
innovation as well as quality is present in their automobiles and vehicles. This enhances the
image of the organisation in form of their customer as well as in the market. By including
quality and innovation in their product, Toyota manages to provide optimum satisfaction to
their customers and this works as a competitive advantage for the company. Damian et al.
(2015) have stated that Toyota saves huge amount of capital by proper quality management
and waste reduction in its operations. This helps the company to generate more revenue in its
business. Due to this reason, Toyota is among the top six companies in case of revenue
generation. In this way, through quality management, Toyota accomplishes its organisational
goals and objectives, in an efficient manner. This states that operation management and
management of quality have crucial roles in the business area of Toyota. They are significant
for proper accomplishment of the organisational goals and objectives of Toyota.
Assess the accomplishment of the current process of management of operations and
management of quality, in attaining the objectives of strategic management in the
selected organisation (AC 1.2, 2.2)
Success of current operation management and quality management process in Toyota
The current operation management process in Toyota has facilitated proper growth in the
business of the organisation. The process of quality management falls under the process of
operation management. Quality is managed and sustained in the operations of Toyota. In this
way, both operations management and quality management processes in Toyota are
interconnected with each other. Their process is mainly focused towards production system
of Toyota, which comprises of various process and activities (Christensen, 2014). Managing
the production system of Toyota is a complex task and it requires lots of attention and
accuracy. For bringing accuracy and perfection in the production system of Toyota, several
theories like six sigma, lean production, kaizen, Jidoka, just in time approach and supply
chain management are used for effective operation and quality management. These theories
and processes along with their success in gaining strategic management objectives can be
understood further in the description.

7
STRATEGIC QUALITY
Toyota production system is also known by its short name TPS. It encompasses several
theories that are mentioned as follows:
Lean manufacturing
Figure.1- lean manufacturing
(Source: Web-cab.com, 2019)
Through lean manufacturing process, Toyota enhances the quality of its products and
services. This provides Toyota a competitive edge in the market, which helps in maintaining
its dominance in the global market. Through this manufacturing strategy, the productivity and
quality in the operations of the organisation are increased by maintaining the least cost for the
products and service offered by Toyota (Barratt et al. 2011). This attracts the customers
towards the products and services of Toyota, which in turn increase the profitability in
Toyota.
Toyota eliminates any kind of unnecessary activities and waste, which does not, contributes
in the improvement of operations or hinders the operations of the organisation (Abarajithan,
2013). This elimination of unwanted waste and activities or process is done through lean
manufacturing process.
Jidoka

8
STRATEGIC QUALITY
Figure.2- Jidoka
(Source: Ceopedia.org, 2019)
Jidoka is called as one of the pillars of Toyota production system. The term Jidoka is a
Japanese word, which means automation. This concept of Jidoka is used at the production
line of Toyota. As per Rüttimann and Stöckli (2016), Jidoka concept is used for resolving any
kind of problems, occurring at production line or manufacturing site. The automation process
or Jidoka occurs in four stages, which are as follows:
 Automatic detection of problems
 Automatic termination of process
 Automatic resolving of problems
 Reporting of the analysis of problem
If any kind of problems occurs in the production line of Toyota, then the complete
manufacturing process of production process is stopped at once. Then, the problem is found
and solved immediately. The root and cause of the problem is identified and amendments are
made for preventing similar kind of issues in future production processes (Abarajithan, 2013).
In this way, excellent quality is maintained by Toyota and operations are managed in an
effective manner.
Just in time approach
Just-In-Time Approach is used for managing capacity and warehousing in the industries.
Toyota uses this approach for effective management of its organisational operations.
Efficiency and productivity is increased in Toyota, which is one of the key factors for the
success of the organisation in the global market. Through just in time approach, Toyota

9
STRATEGIC QUALITY
makes its organisational environment flexible to the changes for eradication of waste from
the organisational operations (Goetsch and Davis, 2014). By the means of just in time
approach, better inventory management has been facilitated in Toyota organisation.
According to Ali et al. (2015), the operations of Toyota are operated according to the
principles of demands and supply as per the regulation of just in time approach, supplies and
raw materials for the production of automobiles and vehicles should be purchased from the
suppliers at the time of production. This facilitates better capacity management in Toyota and
eliminates any kind of creation of wastage. This also helps in saving lots of time and capital
for the company, which can be utilised somewhere else. The set up time is reduce in Toyota
and multi skilled and talented employees are recruited or hired by the company to facilitate
better saving of time (Kim et al. 2012). These features added by Toyota in its operation
management have made the application of just in time approach much easier and effective for
accomplishment of the organisational goals and objectives.
Six-sigma approach
Figure.3- Six-sigma approach
(Source: Qph.fs.quoracdn.net, 2019)
The errors occurring in production and operations of Toyota are also eliminated through six-
sigma approach. In reflection of Kim et al. (2012), the products with defects and error in
them can jeopardise the image and reputation of Toyota, in front of the customers and
market. Therefore, removal of such waste and errors is necessary for Toyota Company. By
implementing DMAIC of six-sigma approach, waste is reduced or eliminated from the

10
STRATEGIC QUALITY
organisational processes and operations. DMAIC stands for define, measure, analyse,
improve and control. With the help of DMAIC methodology of six-sigma approach, the
problems or errors occurring in the operations of Toyota are identified (Noe et al. 2017).
After identifying the issues and errors, the process is measured for checking the current
performance. After measuring the process, proper analysis is performed for checking out the
depth and seriousness of the problems and finding out the root cause of the error (Ali et al.
2015). After passing through analysis stage, appropriate solutions and remedies are found for
solving the identified error and problem. Various strategies are formed for solving specific
issues and problems, these strategies are implemented effectively for bringing improvements
in the operations and process of Toyota.
In this way, improvements are made in the processes by resolving the issues and errors,
occurred in the operations and processes of Toyota. However, the whole process is not
terminated here (Dombrowski et al. 2012). The last phase of six-sigma approach ensures that
this type of issue does not return or reoccurs in the future operations of Toyota. Therefore,
essential arrangements are done for sustaining the improvements made in the processes
(Antony, 2011). In this way, the errors and issues generating in the organisational operations
and processes are eliminated for long term. This helps in production of quality products.
Thus, both operation and quality management is carried out in an effective way, with the help
of six sigma approach.
Supply chain management
Supply chain management is one of most used and popular practice for managing quality and
operations in the organisation. For Toyota also, managing its supply chain is one of the steps
towards its quality and operations management. Through proper supply chain management,
Toyota achieves its organisational objectives in an efficient manner (Alves et al. 2012). The
production process or manufacturing operations of Toyota are conducted by collaborating
with the suppliers. Suppliers are contacted and collaborated for bringing improvements in the
production and manufacturing processes. In Toyota, there are in house departments as well as
outhouse department. These departments merge with the suppliers of Toyota for better
functioning and completion of the manufacturing and production process in Toyota. This
example shows that Toyota has been successful in managing good bonds and relationship
with the suppliers. According to Bhamu and Singh Sangwan (2014), maintaining good
relations with the suppliers helps in reduction of cost. It also helps in acquisition of best

11
STRATEGIC QUALITY
supplies and deals. Toyota has done the same, due to which, the suppliers of Toyota provide
the company with best supplies and raw materials (automobile parts).
One of the innovations applied by Toyota in its supply chain management is called as
Monuzukuri. Through this innovation, the best quality of supplies or automotive parts for
production process, are acquired from the supplier at best reasonable prices. This helps the
company in lowering its cost of production, which in turn helps in reducing the price of their
final products. In this way, Toyota is able to provide its customers, best quality of products at
lower prices. This is a reason that the customers of Toyota are fully satisfied with the services
and products offered to them. The supply chain of Toyota is very strong and immune to the
disasters (Assarlind et al. 2013). Toyota Company has merged with its suppliers, present in
each of its operating countries. Through this collaboration with the suppliers, Toyota has
constructed a flexible supply chain, which is resilient to any kind of disaster. This is one of
the unique and extra ordinary qualities of the supply chain of Toyota.
Through proper maintenance of coordination and synchronisation with the suppliers, Toyota
has managed its supply chain in best possible way. This is the reason that through effective
supply chain management, Toyota has gained competitive advantage in the market (Marodin
and Saurin, 2013). Not only this, supply chain management of Toyota has also helped in
lowering the cost and has enabled efficient cost cutting in its business. Supply chain
management by Toyota has also contributed in processes of quality management and
management of operations (Manville et al. 2012). Due to these factors, the revenue
generation by the organisation is much higher than other automotive companies present in the
global market. Therefore, it is clearly understood that effective supply chain management has
facilitated better accomplishment of the organisational and business objectives of the
company.
Apart from the theories and concepts mentioned above, Toyota also uses total quality
management i.e. TQM for effective quality management in the organisational processes.
Total quality management has a significant history in Toyota. Back in the time, Toyota was
just shifted from truck manufacturing to manufacturing of cars (Matt and Rauch, 2013).
During that time, there were some issues and defects found in the products, attained after the
production processes. When examining the whole matter, it was found that the machineries
that were used for the production process were defected and worn out. The cause of this
wearing out of the machineries was the accumulated dust and metal particles in them. This

12
STRATEGIC QUALITY
caused wearing out of the machineries and resulted in production of defected pieces (De Mast
and Lokkerbol, 2012). This was because the workers on production unit were following old
school American practices in which, machineries were only checked and repaired, when they
stopped working or functioning. Therefore, this accumulated dust was never been noticed by
the workers. This practice was eradicated and regular Time to time checking of machineries
was started in the production unit of Toyota.
In this way, the problems and issues related to quality management as well as operation
management were resolved or eliminated through approaching various techniques and
contact. All these factors together contributed in the successful accomplishment of the
organisational goal of Toyota.
Examine the need for strategic quality change and review the factors that drive the need
for the strategic quality change
Toyota motor company has always recognized as the most well known automobile company
around the world. They have secured the largest place in manufacturing the cars. As
discussed by Mosadeghrad (2012), their main achievement has evolved from the integration
of Japanese affectivity and their quality. This company has designed faster and more
dependable cars at a reasonable price. In recent time, Toyota is a gainful automobile
manufacturer than any organisation within the world. Every change is always driven by some
factors, which encourage that change. Some factors are given below:
Increased competition - Technology is an area where new initiatives are produced very
regularly. To gain the competitive edge, a company is required to find out the ways, which
keep themselves updated with the latest technological developments and trends. As opined by
Von Krog (2012), the company requires continuously making the changes and remaining on
upgrading themselves. Toyota has recognized as such companies, who believe within the
process of change. This offers them a competitive edge over other organisations as they are
modifying their processes, systems, actions and strategies on frequent basis. This reason for
strategic quality change is to maintain aggressive edge within the market, as competition
increase with time.
Globalisation- Integration and interaction among people around the world is getting closer as
the technology advances, distance reduces. For this reason, an organisation requires to keep
up with the most recent trends of globalisation. As noted by Kotter (2012), globalisation was