TQM Issues of Toyota Company - Term Paper Example

TQM Issues Toyota's accelerator pedal issue was truly a debacle for the company: “The business and consumer world seems to have been truly shocked by the recent quality problems faced by Toyota and their problematic gas pedal. Over the last few decades, Toyota has become the leading car manufacturer in the world with a reputation that is synonymous with quality” (Sawhney, 2010). The question is, did the quality problems stem from the TQM or despite their TQM? The Toyota accelerator pedal problem shows weaknesses in the whole TQM philosophy that will have to be fixed over time if TQM is to remain viable. TQM's position as industry innovator was well established by the time of the accelerator pedal disaster. Not only had they established themselves as being nearly synonymous with TQM, but they also had become well-associated with Kaizen and quality circles. Toyota's cars were well-respected in the market for their safety, longevity and gas efficiency. But the accelerator pedal problem showed chinks in their armor. What is certain, even if the TQM idea they deployed was philosophically sound, is that Toyota became complacent due to their success. Like IBM, Microsoft, AT&T and too many other companies to list, their size and strategic position had led them to believe they could cut corners and do no wrong. Toyota now has been reminded of their fallibility and will have to spend years regaining the trust of their consumers. As the burger chain Wendy's can testify, even erroneous claims of TQM failures at one store can cause a PR nightmare for years even after the claim has been proven to be fraudulent. Toyota will have to examine where TQM failures were made, and hold some people accountable. Worse, this is not a faulty construction element, so their front-line workers can't be held responsible. Instead, it is faulty design, which implicates engineers and management, people higher up the food chain who it is more difficult to demote or fire. The implication for TQM is obvious: Big companies will need to overcompensate in their TQM protocols. With their amassed capital, big companies should be able to comply more, not less, with TQM needs and restrictions. But they will need to recognise that market pressures and internal cultures endemic to large, successful organisations cause what might appear to be viable TQM initiatives to fail. They will need to make their TQM programmes even more robust, knowing that the uncorrected tendency of the company will be to veer into complacency and therefore into unsafe products. But another issue that TQM advocates face in the wake of the Toyota debacle is that elements like TQM can transition from innovative, effective new techniques into established rigidities. New ideas can still be adapted to new market situations, but once an idea like TQM has become old enough, it becomes very hard to apply it in new ways internal to a company due to factors of complacency, institutional size and the commensurate reduction in flexibility, and established institutional cultures that start to make the idea into a routine that becomes increasingly hard to break. TQM advocates will need to commit to bringing in fresh new minds and new ideas and actually adopting them on a yearly basis in order to remain viable. But the Toyota TQM issue was even worse than it appeared: It actually indicated weakness with the whole idea of TQM. An engineer reported, Although one of the main tasks of engineers at the company was to come up with ways to improve existing product designs, I learned early on that kaizen had a fairly narrow application. It was mainly used to tweak designs to improve product performance. These techniques ensured increased market share for the company because buyers could immediately see the results of the improvements in new models. But some of the most complex engineering design processes—and the ones that tend to fail—are under the hood and out of sight of most owners…In most cases however, kaizen was driven by a fanatical emphasis on increasing market share... Likewise, the Toyota Production System involved a punishing amount of work for its employees and parts suppliers. Projects required meeting strict design and quality goals with unyielding deadlines. It was not unusual for engineers to put in 16-hour days for several months...Working in teams where engineers would help each other with their design work helped but it was never enough. Under conditions of unrelenting overwork, it is simply too hard for engineers to produce products without design flaws and too easy for managers to hide those flaws. TQM for Toyota became about revenue and about making cars with better performance, not about providing safety for customers. Companies will need to make sure that their TQM protocols are not only honest and designed to protect customers as well as market share, but also make sure their other institutional elements don't belie their commitment. TQM tends to be based off of quantifiable metrics: X improvement in performance, Y improvement in safety. So how can TQM be applied to service positions? British Airways offers some insight. It is important to note that British Airways has had some failures in terms of their TQM management. The Heathrow T5 terminal implementation was chaotic and problematic: “One assumes that the sole user, British Airways, and the provider, the British Airports Authority would have used modern methods of project management, which are quite powerful. If that is the case, however, then how could the project have gone awry to such an extent and at such a sensitive moment, i.e. the first day of actual service?” (Heller, 2008). British Airways, however, decided to apply TQM to their service, not just to airport design and airplanes. Being the fourth largest airliner in the business, they decided to try to grow market share and reward existing customers by moving from a “shoddy airline, indifferent to passengers” to one that focused on their passengers' needs and interests first and foremost (British Airways, 2009). British Airways had been a publicly owned company, but mismanagement had led them to lose customers and hemorrhage jobs. But when the company became privately managed, it was still struggling. Thus, they decided that the company's staid reputation for customer service needed a boost and brought in customer service experts and instituted a TQM plan to make sure customer service was even and efficient. First: British Airways treated employees as “internal customers”. This means a few things. They made sure that they were being honest about their TQM metrics and success by using their workers as guideposts. If you can't treat your workers right, how can you expect to treat customers right? They made sure that happy and well-trained employees were capable of providing top-notch customer service, knowing that stressed and frayed people inevitably make customer service mistakes even with no malice or ill intent. Unfortunately, part of this process did mean cutting down on jobs even more than British Airways had done already, cutting down to 29,000. But unlike prior initiatives, they actually cut jobs at the management level and above, not just of entry-level personnel. Senior management also were required to have offsite meetings, record feedback from their lower level managers, and use participative styles. This was to make sure that the TQM protocols would be authentically and holistically adopted by the entire organisation. As Heller and Sawhny point out, TQM to be effective and honest must permeate the entire company. The actual implementation of TQM proposals on the ground level was also done systematically. British Airways considered what problems cause customers to have poor experiences on airline flights and tried to rectify all of them. Ad campaigns were part of it, but the idea was really to have a brand product. British Airways realized that they weren't just selling a ticket, but an experience. People buy a ticket to get someplace. They buy from a particular airline due to price, convenience and service. British Airways focused on making it so that the brand itself was an asset, a guide to customers, something that the customer could have trust in. Their TQM review and analysis indicated that airline food is one of the major negatives associated with the flying process and, unlike other elements, can become associated with a particular company. British Airways undertook a comprehensive food reform, recognizing that memories of good food become associated with good service and good memories of a flight. They analyzed different routes and used those analyses to provide appropriate, geographically-linked food. They also tried to provide standard amenities: Club world, first class, super shuttle, and improved economy class services. Perhaps the most interesting element of TQM was to make it so that customer service itself was viewed as a product and evaluated using TQM metrics. Performance would be evaluated through customer surveys and feedback from employees and managers, and customer service approaches were ranked and rated. Customer service is a subjective thing: While it is quantifiable whether a car breaks down, it's not so quantifiable that a customer gets good service. What if they're in a bad mood and simply won't take any service well? What if they're naturally sociable and gregarious: Should that be treated the same? Nonetheless, British Airways tried to quantify the unquantifiable and provide metrics to enhance customer experience. They thus demonstrated leadership and vision in leading TQM forward into the new century. Kaizen is the Japanese management philosophy of continuous improvement (Kaizen Institute, 2011). Kaizen for the Japanese is a comprehensive approach, not just for business but for psychology and psychotherapy, health care, life-coaching and self-help, government and policy-making, programming, and so forth. In the business world, Kaizen is about constantly revisiting practices and norms and aiming to improve them to match new market conditions, making sure that ancillary and support functions like logistics and supply are part of the process, reduce waste and increase efficiency, and humanizes workers unlike more traditional Taylorist techniques. Kaizen and standardisation are linked inextricably. While it is possible to gain some ground simply by trying harder or reviewing efforts and styles, ultimately it is impossible to apply continuous changes in meaningful ways and measure them without standardisation. It's like baking a cake: One can eyeball it, but if something goes wrong, the aspiring baker will not be sure if the problem is from the flour, baking soda, salt, etc. and will have no way of applying or measuring meaningful changes. Standardisation, the creation of objective metrics, and other processes are therefore part of kaizen: You have to be able to measure the problem before you fix it. Note that kaizen can include all sorts of “soft” or variable elements. Toyota had all sorts of company meetings, company culture proposals, etc. Measuring then begins. In particular, kaizen tries to look at the cycle time of an operation and the amount of inventory in play at any given point. This is due to kaizen's association with lean management: One could institute perpetual improvement that focuses on other metrics, such as reported customer satisfaction. In any respect, kaizen processes analyse how long the cycle time meaningfully is. Sometimes, on paper a cycle is very short, but when quality control has to be put in or a process has to be revisited, the cycle can meaningfully become longer. Take programming. One can define a cycle time as the time it takes to make a piece of code, but this is a meaningless metric because code must be debugged. A realistic cycle time would be the time it takes for code to be made, debugged, verified, and implemented. Once the cycle time has been meaningfully analysed, it is possible to easily change the implementation and start reducing cycle times through reducing extraneous or redundant steps, consolidating quality control steps whenever possible, improving rate of communication and cutting down on idle time, etc. Similarly, the amount of inventory that has to be at use at any particular time is quantified. Some cycles may appear to be efficient, but once a full inventory is taken of requirements for the whole cycle, it is clear that the cycle is actually bloated. Measurements are then pitted against requirements. This process being iterative, requirements can be made to be percentile improvements or made in light of previous successes. Let's say that the third kaizen cycle for a particular process begins with the prior kaizen cycle finding that the process could be made 10% more efficient. The third kaizen cycle can not only look at that as a goal and measure achievement but also make a 5% improvement the goal of this cycle. Innovation begins. Here, kaizen offers no special tricks. Companies will need to do the nitty-gritty of retooling and retraining. Job requirements will need to be revamped and there may be commensurate changes in pay and benefits. But kaizen does focus on experimentation. It is possible to experiment across departments with solutions, then implement the innovations. After implementation, the success of implementation has to be measured... which forms the basis for the next cycle. Kaizen is iterative and can go on ad infinitum. The idea is to constantly be paying attention to problems and staving off complacency and inefficiencies, as well as take into account new market and technostructural changes. Kaizen distinguishes itself not just by a focus on perpetual, cyclical change, but also by humanising the work force. Kaizen advocates recognise that, in most industries, perpetual improvement begins with the worker. Training, increasing of responsibilities, avoiding overwork, and human development are a part of kaizen models. One can't expect meaningful institutional change without providing workers real and continuing improvement to match the changes in the institution. Kaizen can go astray, of course. In the Toyota case, kaizen itself needed to be analyzed and refreshed. Kaizen protocols can start to become such an expected part of work that they no longer have the inertia-changing properties and simply become part of institutional bloat. Further, like all parts of TQM, objectives need to be closely defined. Reducing cycle times and inventory are good things, but continuous improvement in product quality, product safety, production safety, and so on are also parts of the kaizen model. TQM programmes fail for a variety of reasons, but successful implementation of them is truly uncommon. There are far more ways to fail than to succeed in TQM. While it is impossible to list all the ways a TQM programme can fail or not achieve stated objectives, major ones can be simply summarized. First: TQM can be applied too narrowly. British Airways applied TQM to a specific but important function: Customer service. Toyota applied it to their entire manufacturing process and company design. Applying TQM to one product or to a few factories or to a small part of the company is not only unlikely to help the company in general, it's unlikely to help that department. TQM must be organisation-wide to have any real impact. It's impossible to improve production in one area, say, if every other element of production is still a traditional system of moving as fast as possible with standardized protocols being the only safeguard for quality. If TQM is being applied only to some sectors of customer service, customers won't perceive it because their high quality experience will always be brought down by elements like automation and phone trees, management protocols and other factors that obviate the whole point. One has to imagine an unbroken line from end customer experience or end product to the TQM protocol. If that line can't be traced, then TQM is almost guaranteed to fail. Note that only focusing on the immediate end customer experience is also a fallacious method of TQM implementation. Toyota focused only on things the customer could see like horsepower or “pep”. But the problem is that people were buying Toyotas because of what they couldn't see: Safety, reliability and longevity. Toyota cars had a reputation for safety and lasting a very long time. Toyota was being dishonest by assuming that customers only wanted what was immediately obvious. Second, and ironically: TQM can be too expansive. Trying to take a department and turn its quality management around too quickly, too liberally or too comprehensively is also guaranteed to fail. Meaningful implementation time has to be taken into account. British Airways recognised that their implementation process would take time and used that time to rebuild customer trust and satisfaction, advertise, etc. Some goals may not be achievable, and others may take time to get towards. Meaningful metrics and multiple stages should be built into any comprehensive plan. Further, as we saw with Toyota, implementation has to make sure that human capital and resources are not overdeployed: Exhausted workers trying to comply with a new TQM protocol are not only not going to be able to meaningfully enact that protocol but will learn to resent it as another imposition. Third: TQM can be focused on too narrow of goals. Toyota and many of its imitators focused on TQM only as lean production, only as a way to improve performance metrics and quality of the product offered. But TQM is also about safety and community responsiveness. It's about enumerating and improving all elements of quality. Toyota realised, too late, that while a narrow focus on TQM might seem to push up profits, the inevitable slip is so harmful to the company's reputation that it totally eclipses the advantages. To be meaningfully instituted, TQM has to be done holistically and from the bottom-up. TQM protocols need to be based off of all of the company's needs and interactions. A flowchart of every company interaction needs to be made, seeing each fracture point and risk area and applying TQM techniques to each. If this isn't done, then the unbroken line can't be made and quality failures in the rest of the company, like crabs holding each other back from escape, will restrain the improvements from having any impact. TQM has to take into account limited resources, particularly human capital and time. One goal of TQM should be to reduce employee stress and time, not increase it. Thus, TQM metrics will need to include employee satisfaction and time as part of their package, the way British Airways did. Heller (2008) points out that appearance has to match reality. Many companies adopt what they claim to be a TQM approach, and might even mean it on some level, but ultimately just use it as a new PR catchphrase. “Soft” parts of company culture such as arrogance or complacency also need to be incorporated, and TQM must be authentically made part of managements' experience as well as workers. Heller proposes five questions for TQM implementation: “1. Do any quality issues exist? 2. If this is the case, how are they picked up and transferred? 3. How are they dealt with if they are picked up and transferred? 4. What working mechanism is used if they are dealt with? 5. Does the environment support change and the new behaviours required?” TQM that avoids these failures and embraces this path to success should succeed given time and earnest work. Works Cited Bank, John. The Essence of TQM. Prentice-Hall International: UK. 2002. British Airways. “British Airways’ new route to customer service “. October 1, 2009. Presentation 20071538. Web. Retrieved from: http://www.scribd.com/doc/20503745/A- TQM-Case-Study-in-Service-Sector . Accessed 1/17/2011. Heller, R. “The lessons of total quality management”. Management Issues. May 8, 2008. Kaizen Institute. 2011. Web. Retrieved from: http://www.kaizen.com/ . Accessed 1/17/2011. Sawhney, Robert. “Toyota, Kaizen and Professional Service Firms”. Marketing Asia. SRC Associates Ltd. February 12, 2010. Read More