NUMMI Analysis

Topics: Organizational culture, Problem solving, Toyota Pages: 9 (2457 words) Published: September 6, 2014

Executive Summary
The goal of this executive summary is to identify the problems, the major causes, solutions and methods of implementation for the New United Motor Manufacturing Inc. better known as NUMMI. NUMMI though specializes in vehicle manufacturing, was having trouble producing small vehicles. NUMMI workforce also had a horrible reputation. NUMMI would like to successfully reinvent its organization culture and produce high quality vehicles. NUMMI solution is to adopt a new production and management systems. To conclude this report, we will justify why adopting new production and management system will benefit NUMMI and help change its organizational culture. Problem Identification

In1983 the New United Motor Manufacturing Inc., Toyota and GM joint venture experiment in a unlikely collaboration to bring a new fleet of profitable small cars to the United States. This partnership took place in Fremont, California in a factory plant called NUMMI. GM objective was to learn how to make small profitable vehicles and learn Toyota production and Management System. Toyota objective on the other hand wanted to simply begin producing vehicles in the United States. GM already had the infrastructure in place that Toyota needed; this lead to their partnership.

The workforce at the original GM Fremont factory was well-known to be the worst in producing low quality vehicles in the GM ecosystem. “The work force in those days had a horrible reputation, frequently going out on strike (sometimes wildcat strikes), filing grievance after grievance and even sabotaging quality.”(Shook 2010) The objective of NUMMI was to devise a plan to help change the culture of the organization. NUMMI would measure there outcomes by successfully reinventing there organization culture and producing high quality vehicles. This level of achievement allowed NUMMI to go from being GM’s worst factory to later becoming one of its best. NUMMI employees where empowered to be accountable for their selves and build quality vehicles. “What changed the culture was giving employees the means by which they could successfully do their jobs. It was communicating clearly to employees what their jobs were and providing the training and tools to enable them to perform those jobs successfully.” (Shook 2010)

GM Fremont plant workforce was once considered one of the company’s worst production facilities. At the time, the plant workforce was producing some of the worst quality vehicles for GM; there level of absenteeism regularly ran over 20%, employees would habitually go on strike and sometime known to sabotaging quality. Without changing employees the once dysfunctional manufacturing plant was transformed into a model facility with a new company culture. By adopting Toyota’s production and management system, NUMMI overcame the many obstacles that once prevented its ability to achieve the objectives above.

Causes of the Problem

As stated before, GM Fremont factory in 1983 was producing extremely low quality vehicles. To try and correct this problem, GM entered a joint venture with Toyota. Toyota faced many challenges partnering with GM. To begin GM didn’t know how to make small profitable vehicles. GM attempts to create small size vehicles ultimately failed thus why reaching out to Toyota. GM also wanted to reinvent its work force production and management systems. This joint venture would allow GM to learn how to make quality small profitable vehicles and more importantly learn Toyotas production and Management System.

GM Fremont was well known for having an unsatisfactory workforce. The employees had a terrible company-employee relationship culture and reputation. Employees were known to habitually go on strike, filing grievances were common, and there were employees to go as far as sabotaging quality. “Toyota had many concerns about transplanting perhaps the most important aspect of its production system — its way of cultivating employee...

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2. Ramlall, S. (2004). Motivation Theories and their Implications for Employee Retention within Organizations. Journal of the American Academy of Business, (5), 52-64.
3. Shook, J. (2010). How to Change a Culture: Lessons From NUMMI. MIT Sloan Management Review, 51(2).
4. Steers, R., & Porter, L. (1983). Motivation & Work Behavior. New York: McGraw-Hill Book Company.
5. Nohria, N., Groysberg, B., & Lee, L. (2008). Employee Motivation: A Powerful New Model.Harvard Business Review.
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