Organisation Analysis & Change TOYOTA MOTORS MANUFACTURING CORPORATION - Research Paper Example

?Organization Analysis and Change Toyota Motors Manufacturing Corporation Toyota Motors for the past several decades has remain on top if not is in the top five manufacturer of motor vehicle in the world. Its success is most notable in the area of automobile production and production line manufacturing. If Ford and Taylor provided the concept of production line and its efficiency Toyota Motors perfected it (Ohno & Bodek, 1988). Toyota production system has been used as a model by countless manufacturing companies because of its success in ensuring quality along the production line while maintaining efficiency. However, on January 26, 2010, Toyota, suspended the sales of eight vehicles that was recalled for various problem which would include accelerator pedals (Welch, 2011). Having developed the Lean production concept as derived from the Toyota Production System, a question that begs to be answered is how these defects made it to the customers. These kinds of production issues were not the first but only the culmination of a declining culture of quality that is slowly creeping into the once formidable framework. The Lean manufacturing runs along the concept of making sure that all aspect of production takes into consideration the cost of production. Thus, optimization and efficiency are not only high priority but they are ultimate goal of every process. Lean manufacturing concept has learned from the mistakes of Taylorism and Fordism in terms of production processes. The Toyota Production System on the other hand was developed by Kiichiro Tayoda and Taichi Ohno from the foundation of the manufacturing concept built by the founder of Toyota Motors, Sakichi Toyoda. Learning and improving the works of Demmings and Ford, the Toyota Production System or simply TPS relies heavily on the “Just in Time Concept” of Toyota’s founder (Womack, Jones, & Roos, 2007). Burke Litwin Causal Model Burke-Litwin is a system science model that describes the linkages among the key factors that affect performance, and determine how change occurs in an organization. Through the use of this model system, engineers obtain data on what organizational factors to change and why. Higher level factors have greater weight in effecting organizational change; a change in any variable will ultimately affect every other variable (MITRE, 2011). The above figure in a nutshell depicts the linkages of each framework with each other. I shall use this model in analysing Toyota Motors Corporation. It would be interesting to note how the LEAN and Toyota Production System will project against the Burke-Litwin organization causal modelling. Key Issues and Improvement The Toyota Lean system has been known all over the world as one of the best if not the best production frameworks in the world. It is very successful in some countries when implemented however, it fails miserably in some. With these manufacturing concepts and principles at play in manufacturing its automobiles, recall should not only be improbable it is nearly impossible. Using Burke-Litwin causal model, I shall attempt to determine what went wrong and I shall also provide some solutions on how to prevent the recalls from happening again. Although details may not be able to fit within this essay, a summary if not a short description of each concept shall be provided in relation to Toyota. Problem Analysis In analysing the problem, I shall use the Burke-Litwin Causal Model. External Environment: For Toyota, external environment are the vendors or suppliers although the Toyota Production System recognizes vendors and suppliers as partners, they are still considered as part of the external environment due in part to the lack of control of Toyota over these organizations. Toyota’s external environment similarly includes the government regulators and other certification organizations that guarantees and certifies the compliance of every Toyota products to the standard of every country and industry. Both external factors drive the quality requirement and manufacturing standards of every Toyota products. The products of Toyota’s vendors or suppliers lose their individuality as the product of the vendor as soon as they are attached or installed in every vehicle that Toyota Manufactures. Therefore, if in case a Toyota vehicle suffers any defects because of these parts, Toyota is not only responsible for the defect but more importantly, it is the Toyota brand name that suffers. Toyota recognizes this symbiotic relationship to a point where there are instances vendors and suppliers own manufacturing processes need to be certified first by Toyota. Mission and Strategy: Toyota’s Strategy includes the seven guiding principle (which I have listed at the appendix) and the five main principles of the founder of Toyota (also listed in the appendix). Toyota’s Code of Conduct is likewise followed globally and it is equally the root of Toyota’s rule based culture. The Toyota Production System is the core framework that is at work in every Toyota Manufacturing and assembly plant all over the world. Toyota recognizing its impact all over the world has thus developed its Global vision which is metaphorically represented by a tree. The fruits of Toyota as a responsible corporate citizen are its cars and the way it enriches the lives of the community and the way Toyota itself practices good manufacturing practices that would contribute to the ecology rather than adversely impacting it. The trunk of the tree represents its stable business base which is a balance of profit, social responsibility and quality cars. The tree’s roots are the Toyota Production System, the Lean concept or what is commonly known as the Toyota Way (Toyota, 2011). Leadership: Akio Toyoda, is the current head of Toyota, being the descendant of the founder of Toyota, he embodies the very essence of what Toyota is. He is most respected not only by the common workers but also by the corporate community and the industry all over the world. Being the descendant of the founder he brings in new ideas that is coupled and married to the tradition of Toyota. Toyota is family and its workers are its children each are treated with respect and their dignity intact. Organizational Culture: is purely Japanese and patriarchal including utmost respect for authority. The Japanese culture given their history is of the impression that the action of one affects the many. Japanese also have a high level of awareness with respect to their individual roles and their contribution as well as their impact to the larger picture (Toyota, 2011). Structure: Toyota as much as possible fosters or supports a flat organizational structure. However, each personnel have their own responsibilities according to the Toyota Production System. Each department have their own responsibility and specific key result areas that is well defined. The decision making processes at the top respects this delineation of responsibilities. Systems: For the most part Toyota have developed their own Production System called the Toyota Production System, the whole concept including the conduct of their non-production departments have their own system. This collective organizational system is called the Toyota Way. More information regarding this system can be found in this website: http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/ Management Practices: In keeping with the concept of the Toyota Way, “The Just in Time” manufacturing concept practically the whole organization are driven by demand rather than dictating the demand. This is to ensure that wastage due latency does not happen. Lost opportunity which is the normal by-product of a driven manufacturing concept is resolved by planning and proper forecasting of demands. In the Toyota Production System, quality is the responsibility of everybody thus everybody has the responsibility to stop the production line should an anomaly arise or quality issue has been determined along the production line. It is restated for emphasis that in the Toyota Production System that anybody can stop the production line at any point in time if quality issues have been discovered. Each employee plays an important role and everyone is equally responsible to ensure that quality is assured if not guaranteed by every department along the production line. Each employee of Toyota is aware of this and in actuality feels responsible for any flaws that are determined (Toyota, 2011). Work Unit Climate: Each work unit is responsible for a portion of the cars that has been manufactured. Each work unit not only takes pride of their product collectively they take responsibility if in case other people outside of their group discovers flaws in their output. That would include flaws that have been discovered along the production line. Task and Individual Skills: Are bountiful, from rank and file to the executives of Toyota are trained before they are deployed into the different manufacturing plants if not corporate ladders. The Job person matching is not only determined by the actual qualification given by universities, most are given by Toyota themselves. Skills upgrade as well as additional knowledge is also sponsored by Toyota itself. Individual Needs and Values: As mentioned earlier, a Japanese workers need is for his product to satisfy if not exceed convincingly the quality standards set by the organization. A Toyota worker values his output and is responsible for his product including his performance in the state or condition of the product when it reaches the customer and consequently used by the customer. Motivation: A Toyota employees’ motivation is rooted in their pride of the work they are doing in whatever capacity. Individual and Organizational Performance: is measured or determined for the most part by the customers and end users of the vehicle that Toyota Motors manufactures. Beyond the corporate Key Result Areas and Key Performance Indicators Customers need to be satisfied and happy not only in terms of experience in using Toyota products but also in meeting their every need. Customers need include safety, comfort and a total cost of ownership that would meet their budget. Every Corporate Organization has the fiduciary responsibility to their stake holders to turn a decent profit. These can be achieved through the efficient use of their resources and practical application of the Toyota Production System. The Toyota Production System practices the “just in time” manufacturing process or the “pull” production concept. This simply means that production drives the raw material requirement and supply. Production is driven by sales projections or orders from the distributors. Problem Areas There is nothing wrong with the Toyota Production System what is wrong is the people that implements it. It is noticed that most problem that have been discovered resulting to recalls are the parts or assembled manufactured from plants outside Japan. Therefore the problem area is the culture permeating inside these offshore manufacturing plants. Proposed Solution The Toyota Production System is not the problem but rather the culture of the organization implementing it is. The root cause of the recall problem is in the quality assurance methodology of the manufacturing plants (Welch, 2011). The number of recalls Toyota has to implement in the last decade is indicative of the steep decline in the quality of the output of its manufacturing plants. From the Analysis conducted above my proposed solution will impact the Leadership, Organizational Culture, Structure, Systems, Management Strategy, Work Unit Climate and Values that will hopefully impact the Individual and Organizational Performance (Burke, 2011). Leadership and Organizational Culture: I proposed that each Leader in every Toyota Manufacturing Plant be given a fixed and limited tenure that will ensure that his leadership style and his positive contributions to the culture of each plant are embraced by the rank and file. The rationale for the change is to bring into the organization’s culture the positive contribution of the new Leader as he assumes office. The new Leader’s style of leadership will not only benefit the rank and file but rather each change will impact the culture of the organization in a manner that is consistent with the Toyota Production System. Structure: I proposed that the reporting structure of Toyota be attuned to the first proposal. The new Leadership as he assumes office shall be given complete fiscal and operational control in such a way that his brand and style of leadership shall be reflected in the way he manages cost and the operation output of the plant he is managing. However, it should also be noted that the quality control and fiscal control or auditing shall not be under his supervision. This is to ensure that checks and balances are affected in each of the plants. The controls and governance in each manufacturing plant shall be monitored and reported to the head office to ensure that proper intervention is implemented should the need for it is needed. Systems and Management Strategy: Even if the new leadership is given total fiscal and operational control the Toyota Production System and all the other reporting system shall be standard across all facilities. This is to ensure that all facility speaks the same language in terms of reporting, manufacturing and system processes. This strategy will also ensure that the learning curve for each Leader as he assumes his leadership roles shall be short and sweet. Work Unit Climate and Values: For each leader, to be given total fiscal and operational control will have an impact to the Work Unit Climate and its Values. This shall be reflected in the manufacturing output, quality and most especially in the Work Unit Climate and the values or culture created within the organizations. By limiting the tenure and changing the leaders of the manufacturing plant every so often acculturation happens. Acculturation happens both ways, the manufacturing plant changes the leader and due in part to the type of power the leader has over the manufacturing plant the manufacturing plant is changed by the leader. However, acculturation can both be good and bad. To ensure that only the good inputs to the culture are absorbed the governance and control compliance of every Toyota manufacturing plants shall be monitored closely. Implementation Plan It should be noted and as mentioned above the Toyota Production System is not the problem. Learning from the mistakes of the experiment made by Toyota in Michigan, the problem it seems is in the methodology used in implementing the Toyota Production System as a framework in Manufacturing. It would appear that the workers resisted and did not embrace the concept including the executives who were expected to implement it fully (Harbour & Higgins, 2009). The experiment showed that the culprit is not the TPS itself but rather the mindset of those implementing it. The natural resistance of the personalities has gotten in the way of implementing a good framework to solve a perennial problem in automobile production. Self-interest not equally played an important part but rather, it was the yardstick used in implementing the concept or parts of it. Since the concept or portions of it was not going to serve the self-interest of the person implementing it, it will be implemented shoddily if not, not at all (Liker & Ogden, 2011). To solve the problem I am proposing the immersion of the top leadership into the culture of a Toyota Production facility in Japan through an exchange of production leaders between several facilities on a regular basis. However, in order for learning curves to be lessened if not eliminated as production leaders gets immersed into the culture of the new facility he is assigned to production standards in terms of processes, output, quality should first be established. By implementing the standard operating processes as it is known throughout Toyota Motors, what will be promoted is a culture practically devoted and attuned to the Toyota Production System. Bibliography Burke, W. (2011). Organizatin Change - Theory and Practice (Foundation for Organizational Science). California: Sage Publication. Harbour, J., & Higgins, J. (2009). Factory Man: How Jim Harbour Discovered Toyota's quality and productivity methods and helped the U.S. Auto industry get competitve. Dearborn Michigan: Society of Manufacturing Engineers. Liker, J. K., & Ogden, T. N. (2011). Toyota Under Fire: Lessons for Turning Crisis into Opportunity. California: McGraw Hill. MITRE. (2011, April 26). MITRE System Engineering Guide. Retrieved June 24, 2011, from MITRE Consulting Company Website: http://mitre.org/work/systems_engineering/guide/enterprise_engineering/transformation_planning_org_change/performing_org_assesments.html Ohno, T., & Bodek, N. (1988). Toyota Production System. Tokyo: Diamond Inc. Toyota. (2011, February). Toyota Production System. Retrieved June 25, 2011, from Toyota Corporate website: http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/ Toyota. (2011, February). Toyota Vision and Philosophy. Retrieved June 25, 2011, from Toyota Corporate Website: http://www.toyota-global.com/company/vision_philosophy/ Toyota. (2011, February). Toyota-History. Retrieved June 25, 2011, from Toyota Corporate Website: http://www.toyota-global.com/company/history_of_toyota/ Welch, D. (2011, February 24). Toyota Recalls Another 2 Million Cars, Apology Needed. Retrieved June 25, 2011, from The Businessweek.com: http://www.businessweek.com/autos/autobeat/archives/2011/02/toyota_recalls_another_2_million_cars_apology_needed.html Womack, J., Jones, D., & Roos, D. (2007). The Machine That Changed the World: The Story of Lean Production - Toyota's Secret Weapon in the Global Car Wars That is now Revolutionizing World Industry. New York: Free Press. Appendix Seven Guiding Principles of Toyota (established in 1992, revised in 1997 as translated from original Japanese) 1. Honor the language and spirit of the law of every nation and undertake open and fair business activities to be a good corporate citizen of the world. 2. Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in their respective communities. 3. Dedicate our business to providing clean and safe products and to enhancing the quality of life everywhere through all of our activities. 4. Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide. 5. Foster a corporate culture that enhances both individual creativity and the value of teamwork, while honoring mutual trust and respect between labor and management. 6. Pursue growth through harmony with the global community via innovative management. 7. Work with business partners in research and manufacture to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships. Five Main Principles of Sakichi Toyoda - Founder of Toyota Always be faithful to your duties, thereby contributing to the company and to the overall good. Always be studious and creative, striving to stay ahead of the times. Always be practical and avoid frivolousness. Always strive to build a homelike atmosphere at work that is warm and friendly. Always have respect for spiritual matters, and remember to be grateful at all times. Read More