Since its inception in 1937, Toyota has grown to be the third largest auto producer and fifth largest industrial company in the world. Toyota sets the standard in efficiency, productivity and quality in the auto manufacturing industry; and is the envy from rivals such as Ford, Chrysler and GM. Toyota’s product quality and service is recognised by various independent agencies such as J.D. Power and Associates and Motor Trend.
IndustryWeek has named Toyota as one of the world’s 100 best-managed companies.
With its transplant to Georgetown, Kentucky (TMMK) in 1988, industry insiders have wondered how Toyota will implement its form of management and team culture in the American setting. Earlier in 1994, Toyota’s joint venture withGMinNewUnited Motor Manufacturing, Inc. (NUMMI) had yielded valuable lessons in labour-management co-operation. Toyota reproduced many features of management philosophy and practices, yet several practices have been altered or eliminated. Practices such as teamwork, group orientation, work structure, plant layout, job rotation and community of fate theme have been adopted. Promotion based on seniority, lifetime employment, company unions have been modified to fit local needs.
Since quality is an end result of a process, we will have to examine the process and the human side of the process. Lessons learned can then be applied to our own organisation for improvement.
In order to better understand Japanese management systems, one needs to understand the social-technical systems (STS); which are based on the awareness that everything depends upon everything else, and that performance is the product of the interactions of the sub-systems. Japanese prescribed to amodel and follow the correct process, result will then follow. In an organisation, it is translated to employees as to think of the implications of the network first and individual second. Mutually beneficial relationships are based on mutual trust, and participants share in business gains. Harmony or wa, is the foundation and building block of Japanese relationships. The desire to keep harmony in relationships puts emphasis on co-operation, consensus building “nemawashi”, participative management and shared decision-making “ringi”. Although the process is time-consuming, implementation is fast because of the widespread awareness and support for the proposal already gained throughout the process. Japanese use this to look at the “big picture”, consider alternatives and foreseeable problems before implementation.
It is interesting to note how harmony plays a unique role in Japanese competition that is unconceivable in the United States. Competition is intense within the industries, but players compete with the spirit of co-operation. Japanese competition centres on preserving market share, not on seeking profitability. To gain a favourable impression from consumers and market share, organisations become service-oriented, with emphasis on quality and reliability.
Toyota Production System (TPS)
TPS was established by Taiichi Ohno, with concepts designed to maximise flow, eliminate waste and respect people; with the foundation based on efficient use of resources to produce materials with a repetitive, reliable system. The system eliminates non-value added physical activity with automation and a multi-task workforce. Some have described the system as the essence of “Taylorism and lean production” (Rawlinson, 1996). TPS is accomplished through the use of Jidoka, Just-in-Time, Kanban inventory system and Kaizen.
Calling attention to problems and fixing them before the product is finished is the basic essence of Jidoka. The task of quality inspection formerly done by a human is built-in into the machine, thereby creating product quality within the process (Toyota, 1987). With the operator managing several machines at once as opposed to one in each station, efficiency and productivity rises. Under this system,workers must...
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