Total Quality Management in Toyota

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Introduction

Toyota is one of the world’s largest automobile manufacturers, selling over 9 million models in 2006 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 Japan’s first power loom, which was to revolutionise the country’s 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.

 

History

When Toyota became the first Japanese car manufacturer to venture into motor sports in 1957, Shotaro Kamiya, then president of the Toyota Motor Sales Company, encouraged his team with his belief that, “There will be no progress if you fear failure.”

The Toyota spirit

For half a century this courageous spirit has guided these pioneers and their successors. Aware of the immense task ahead, Toyota approached motor sports with a mixture of patience and ambition. Over the decades, the company’s “kaizen” method of continuous improvement proved a winning strategy. Toyota eventually accumulating hard-won experience, professional respect and a long string of victories at tracks all around the world.

The purpose of this project is to how Toyota analysis of effectiveness of Total Quality Management in the automobile industry. The reason is quality of a product or a service plays a key role in the current business environment. Total Quality Management is a philosophy that guides every activity within a business. It is concerned with developing and sustaining a culture of continuous improvement, which focuses customer’s expectation at a low cost.

Providing the best product or service at the minimum price is the main challenge faced by the current competitive business environment. Toyota customers are price sensitive but at the same time they expect value for money, large companies have been able to gain the economies of scale therefore, they have been able to deliver low price products to the market. But the quality of that product cannot always be impressive as they mainly focus on the low cost. Traditionally the cost of quality is considered as an additional cost but at present cost of quality has taken a major role of a product costing.

As the competition and business survival in modem organisations are intensifying, they need not only to increase their market share by improving the quality or products and services, but also improve the performance of their employees. In the early 1980s, the concept of total quality management was widely applied to manufacturing industries. The application of Total Quality Management has recently shown its significance in services industries for improving the quality of service and customers satisfaction, which has resulted in increased competitive advantage.

In the UK, service automobile industry represents a dynamic and important sector, which occupies a major part of the economy. Rapid development of new levels of service capabilities would be the best solution to deliver high value-...
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