Toyota Motor Corporation - Essay Example

Toyota Motor Corporation Toyota Motor Corporation, a Japanese automotive manufacturer, has created a name for itself in the world market for producing automobiles of the topmost quality. Toyota strictly adheres to its quality control measures so as to consistently upkeep quality in the production over the years. A very important issue in the present competitive world is product quality. American companies are facing stiff competition from high quality of the Japanese products, which has led them to conduct detailed research pertaining to product quality. Increasing consumer dissatisfaction with the existing quality offered has made these organisations try and improve the product quality by way of incorporating various quality management techniques in the production process (James, Rowland-Jones and O’Brien, 2009). As a result, researchers over the years have introduced a wide range of competing perspectives, each different from the other in terms of analytical frameworks and various terminologies. However, foundation of each theory is the same; establishing a relation between product quality and pricing strategy of the organisation. The five important approaches towards quality management are as follows: Transcendent Approach: According to this view, quality of a product is associated with its innate excellence. It is universally acceptable and an absolute concept that deals with uncompromising standards and high levels of achievement. Nonetheless, proponents of the transcendent view are of the opinion that quality is an un-measurable concept and is better defined as recognition of the product through experience or repeat usage of the consumers (Slack, Chambers and Johnson, 2004; Arnheiter and Harren, 2006). Product based Approach: The product based definition regards quality as a measurable and precise concept. The differences in quality of a product can be attributed to that in quantity of the ingredients used in its production, thereby resulting in faulty attributes of the output. For example, a high quality rug or mattress would have a larger number of knots per square inch. Hence, this approach gives a hierarchical or vertical dimension to quality by providing ranks to goods based on their number of favourable attributes. This approach has been incorporated in the theoretical models of economics (Namkung and Jang, 2007). The two corollaries of this approach are; firstly, higher cost is incurred while attaining higher quality as quality reflects the number of favourable ingredients used in the process of production, considering that such ingredients command a higher price. Secondly, quality is an inherent property of a good and cannot be ascribed. This is because quality portrays the absence or presence of attributes of a product and can be objectively judged. Quality does not dependent alone on preferences (Ison, Peake and Wall, 2002). User-based Approach: This is a very subjective approach that takes into account tastes and preferences of the consumers as different individuals have dissimilar needs and they want only those products that perfectly satisfy their demands. Hence, the products that fit a consumer’s needs perfectly and provide with the highest level of marginal utility are deemed to be of the highest quality. Shifts in the product demand curve help to determine quality of a product according to the economics literature. Even so, this theory suffers from a fundamental problem of determining the ambiguity that arises from various consumer preferences and the process of distinguishing the high quality product attributes from those that are simply preferred by the consumers (Gruner and Homburg, 2000). This problem is usually resolved by considering a wide range of consumer preferences across the market, by way of ignoring the weights that each consumer attaches to a product in a different manner and the fact that there is a lack of proper statistical models that can analyse and aggregate product attributes preferred by different consumers (Johnston, et al., 2003). Manufacturing based approach: The manufacturing based approach takes into account supply side of the equation as against the user based approach, which is rooted in consumer preferences and considers the demand side. In general, as per manufacture based definitions, quality is a conformance to the requirements of a product. Deviation of the product from a pre-decided design is equated with a fall in quality. Quality is, thus, a definition of simplification of product control, engineering and a statistical quality control. Value based approach: According to this approach, quality is defined in terms of price and cost of production, implying one that provides with performance at a desired level of price and conforms to a definite cost. There are certain problems associated with this approach as it blends two distinct concepts; quality that is a measure of excellence with price, which is a measure of worth. Consequently, there is a concept of affordable excellence, which is difficult to measure resulting in an application issue (Montgomery, 2007). In order to gain a better understanding of the issue of quality control at Toyota, the researcher conducted an extensive research of their production process. Toyota has adhered to the specific pre-decided design, thereby following the manufacturing based approach (Lysons and Gillingham, 2003). The researcher also interviewed a senior level executive at Toyota in order to confirm the research on Toyota’s quality control measures. The excerpts from the interview are presented below. Q1. Toyota has earned itself a reputation for being the most consistent producer of quality automobiles. What is the motto that is followed at Toyota regarding quality control? According to the respondent, the production of automobiles in an economic and standardised manner is the motto of Toyota. Customer satisfaction is at the heart of all organisational activities and in order to meet customer needs and demands, Toyota has developed a quality control measure known as “Company-wide Quality Control”. This initiative includes all the organisational members in the quality control procedure. They have a specific standard manual that all their products have to follow. All the workers present in research and development, manufacturing, retailing and servicing departments make major contributions towards the quality control procedure. They have two jobs, which is their own and quality assurance at each level. The belief at Toyota for manufacturing products is to conform to the pre-decided design and meet specifications. Any deviation from the engineering rules is deemed as a fall in quality of the product. Making it right the first time and offering the customers the highest level of quality is the secret behind Toyota’s success. Q2. How do you check whether each member maintains quality in their work or not? The answer by the respondent to this question was that strict adherence to quality is required from every employee. There are many processes that are equipped with an automation device, known as “pokayoke”, which detects any error in the production process and subsequently stops the same. Until the error has been rectified, the process is not resumed. The equipments have individual tunes, which are set off on detecting an error in any segment. The maintenance manager deals with the equipment that needs attention. Since each member is responsible for maintaining quality in work, nobody tries to pass on faulty work to the next level. This is because if anything unusual is noticed, then the next member can pull the “andon” cord and stop the production process. The process would then be investigated by the members and the team leader. Only after resolving the issue, work is resumed. 2. Quality Characteristics There are certain characteristics of quality that are mentioned below. Functionality defines ability of a service or product to perform the job for which it was intended. For automobiles, functionality includes traits such as, handling, acceleration, comfort and cruising speed. Brands are often ranked based on functionality of the products offered. Appearance defines the look, feel, smell and sound, implying overall aesthetic appeal of the product or service. Reliability is the consistency that a product or service had demonstrated over a period of time. It reflects the probability of failure of a product over a specific time period. The most common measures of reliability are: MTFF – Mean Time to First Failure, MTBF – Mean Time Between Failures and the failure rate per unit time (Johnston and Clark, 2005; Kapur, 2014). Durability defines the useful life of a product or service, signifying the period of time for which it can be used by the consumer. Durability refers to the usability of a product before it has to be replaced. Even so, the estimation of durability becomes difficult if the product is reparable (Garvin, 1984). Recovery determines the ease with which problems that are inherent to a product or service can be resolved or rectified. Consumers are not merely concerned with quality of the product purchased, but also the time taken to restore to its previous condition. Contact determines the level of person-to-person contact that takes place (Slack and Lewis, 2002; Islam, Ahmed and Alias, 2007). (Source: Foodlinks, 2010) After conducting the current research, the researcher realized that Toyota conforms to five out of the six quality characteristics such as, functionality, reliability, durability, recovery and contact. In order to explore this section, the researcher asked the following question to a senior executive. Q3. Which of the quality characteristics do you think Toyota delivers in its products? Toyota follows the principle of delivering best quality products to its customers and adheres to all quality characteristics. Quality should be defined in such a manner such that the production control and engineering are simplified. Toyota has over the years laid emphasis on reliability, engineering on the design side and statistical quality control on the manufacturing side in order to enable the production system to eliminate deviations from the design, if any, at an earlier stage itself. There are two methods of achieving the end. In the former method, a product’s basic components can be analysed and after identification of the possible failures, alternative designs is proposed so as to enhance reliability of the product. The latter method would check whether the production process is functioning beyond the acceptable limits by employing statistical techniques. Toyota had also introduced the Creative Idea Suggestion System in 1951, which had developed the contact between employees greatly as they were able to work in a team and come up with creative solutions and innovative ways of improving the system. The manufacturing process described above had already demonstrated the verification of quality at each level. Toyota relies on high quality supply of its parts from the European suppliers in order to maintain the level of quality offered and ensure durability of the product. The company also conducts market research surveys to monitor the level of customer satisfaction or dissatisfaction. Even after the manufacturing process, Toyota runs another set of quality control by randomly selecting few cars and checking them for recovery in case any problem occurs. Toyota aims to minimise the recovery time so as to improve customer satisfaction. Nonetheless, Toyota is a company that is known to target the mass market and manufacture cars for the mid-range income holders. The company do not produce luxurious or high-end cars and thus, is not able to boast of the appearance of the cars produced. The company will offer automobiles of the highest quality to their consumers, but appearance is not Toyota’s forte. 3. Total Quality Management (TQM) in Toyota TQM majorly focuses on needs and wants of the customers and an organisation should focus on producing goods that meet the same. Toyota has made its mark in the global automobile industry by way of successfully achieving the highest level of manufacturing efficiency. Toyota has a higher level of physical productivity than most of its competitors. The throughput speed for manufacturing products and the amount of labour required in the production process is represented by Physical Productivity. Apart from Physical Productivity, Toyota also has a better inventory turnover rate than that of its U.S. counterparts. The inventory turnover rate reflects that Toyota has an efficient system of manufacturing, which meets the customers’ demands and not only the production schedules. It is defined as the ratio of sales to work-in-process and finished goods or the ratio of cost of goods sold to work-in-process. Inventory turnover ratio also indicates the level of inefficiency in the system (Naylor, 2002; Arnheiter and Maleyeff, 2005). TQM helps in the better understanding of such segments of the production process. However, there have been recent reports of manufacturing inefficiency and Toyota had preferred to deny the reports than apply measures to improve the system. It has been reported globally that several cars produced have acceleration problems and faulty gas pedals. There has been engineering issues with the models, but there had been no effort taken by Toyota in order to overcome the same. Toyota can, thus, reinforce TQM measures in their production process so that such dangerous manufacturing malfunctions can be avoided (Serge, 2007). Toyota has a commendable reputation in the world market, which must be maintained. TQM measures inefficiencies in the production process, thereby contributing towards rectification of the abovementioned problems. Also, there has been an upsurge of low end luxury cars in the market that has increased the competition faced by Toyota as it does not produce luxury cars. Toyota has to undertake some serious measures in order to retain its reputation in the world market and meet with competition in an appropriate manner (Firestein, 2010; Amasaka, 2009). Reference List Amasaka, K., 2009. The effectiveness of flyer advertising employing TMS: Key to scientific automobile sales innovation at Toyota. The Academic Journal of China-USA Business Review, 8(3), pp. 1-12. Arnheiter, E. D. and Harren, H., 2006. Quality management in a modular world. The TQM Magazine, 18(1), pp. 87-96. Arnheiter, E. D. and Maleyeff, J., 2005. The integration of lean management and Six Sigma. The TQM magazine, 17(1), pp. 5-18. Firestein, P., 2010. Toyota: How One Failure Begets Another [online] Available at: [Accessed 31 July 2014]. Foodlinks, 2010. Quality Management Systems. [pdf] Available at: [Accessed 31 July 2014]. Garvin, D. A., 1984. What does “product quality” really mean. Sloan management review, 1. Gruner, K. E. and Homburg, C., 2000. 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