Quality policy of Toyota – [DOCX Document]

TRANSCRIPT

Date: 11-03-2011

ASSIGNMENT: TOTOAL QUALITY MANAGEMENT

Topic: 5 QUALITY GURU S AND THEIR CONTRIBUTION. QUALITY POLICY,
REASONS FOR SUCCESS, SCOPE OF IMPROVEMENT AND SUGGESTIONS OF HDFC
BANK.

Submitted by: Mohammed Shareef M.K Roll No: 082600192 Section A
3rd year BBM (e-banking &finance)

INTRODUCTIONTotal quality management is considered as a
management approach that was first used during the 1950s and has
become popular during the early of 1980s. Total quality is
considered as a total description of the culture, attitude as well
as the organization of the company that is in focus of providing
their customers with their products or services that will meet the
demands and preferences of their customers. Furthermore, the
culture requires quality in all aspects of the companys operations,
with the different processes that are being done right the first
time and defects as well as the waste eradicated from the different
operations. TQM is a method that is used where in the management as
well as the employees are all involved in their continuous
improvement of the production of goods as well as services. It can
also be considered as the combination of quality as well as the
different management tools that focus at the increasing the growth
of the business as well as reducing the losses that was caused by
different unimportant or useless practices

FIVE QUALITY GURUS: Philip Crosby Zero Defects and Right First
TimePhilip Crosby is an American who promoted the phrases zero
defects and right first time. Zero defects doesnt mean mistakes
never happen, rather that there isno allowable number oferrors
built into a product or process and that you get it right first
time. Philip Crosby believes management should take prime
responsibility for quality, and workers only follow their managers
example. He defined the Four Absolutes of Quality Management.

The Four Absolutes of Quality Management 1. Quality is
conformance to requirements 2. Quality prevention is preferable to
quality inspection 3. Zero defects is the quality performance
standard 4. Quality is measured in monetary terms the price of
non-conformance.

Crosby’s 14 Steps to Quality Improvement 1. Management is
committed to quality and this is clear to all 2. Create quality
improvement teams with (senior) representatives from all
departments. 3. Measure processes to determine current and
potential quality issues. 4. Calculate the cost of (poor) quality
5. Raise quality awareness of all employees 6. Take action to
correct quality issues 7. Monitor progress of quality improvement
establish a zero defects committee. 8. Train supervisors in quality
improvement 9. Hold zero defects days 10. Encourage employees to
create their own quality improvement goals 11. Encourage employee
communication with management about obstacles to quality 12.
Recognize participants effort 13. Create quality councils 14. Do it
all over again quality improvement does not end

Five characteristics of an Eternally Successful Organization 1.
People routinely do things right first time 2. Change is
anticipated and used to advantage 3. Growth is consistent and
profitable 4. New products and services appear when needed 5.
Everyone is happy to work there

Dr Kaoru Ishikawa (1915 1989)Dr Kaoru Ishikawa, amongst other
things, gave his name to the Ishikawa diagram. The Ishikawa diagram
is also known as the fishbone diagram or cause and effect diagram
and is a problem-solving tool used in Quality Circles. Kaoru
Ishikawa received many esteemed quality awards including the Deming
Prize. He led the Total Quality Control movement with focus on
statistical quality control techniques such as control charts and
Pareto charts.

Quality Circles Kaoru Ishikawa led the concept and use of
Quality Circles. The intended purpose of a Quality Circle is to;
Support the improvement and development of the company Respect
human relations in the workplace and increase job satisfaction Draw
out employee potential

y y y

He believed quality must be company wide including the product,
service, management, the company itself and the people. Quality
improvement must be company wide in order to be successful and
sustainable.

Many, including Juran and Crosby, consider Kaoru Ishikawas
teachings to be more successful in Japan than in the West. Quality
circles are effective when managementunderstand statistical quality
management techniques and are committed to act on their
recommendations.

Genichi Taguchi – Quality Loss Function and Robust DesignGenichi
Taguchi is a Japanese quality expert, known for the Quality Loss
Function and for methodologies to optimize quality at the design
stage robust design. Taguchi received formal recognition for his
work including Deming Prizes and Awards. Genichi Taguchi considers
quality loss all the way through to the customer, including cost of
scrap, rework, downtime, warranty claims and ultimately reduced
market share. Genichi Taguchi’s Quality Loss Function The Quality
Loss Function gives a financial value for customers’ increasing
dissatisfaction as the product performance goes below the desired
target performance.

Equally, it gives a financial value for increasing costs as
product performance goes above the desired target performance.
Determining the target performance is an educated guess, often
based on customer surveys and feedback.

The quality loss function allows financial decisions to be made
at the design stage regarding the cost of achieving the target
performance. Quality through Robust Design Methodology Taguchi
methods emphasized quality through robust design, not quality
through inspection. Taguchi breaks the design process into three
stages: 1. System design – involves creating a working prototype 2.
Parameter design – involves experimenting to find which factors
influence product performance most 3. Tolerance design – involves
setting tight tolerance limits for the critical factors and looser
tolerance limits for less important factors. Taguchis Robust Design
methodologies allow the designer through experiments to determine
which factors most affect product performance and which factors are
unimportant.

The designer can focus on reducing variation on the important or
critical factors. Unimportant or uncontrollable noise factors have
negligible impact on the product performance and can be
ignored.

Robust Design of Cookies This is easier explained by example. If
your business makes cookies from raw ingredients, there are many
possible factors that could influence the quality of the cookie –
amount of flour, number of eggs, temperature of butter, heat of
oven, cooking time, baking tray material etc. With Genichi Taguchis
Robust Design methodologies you would set up experiments that would
test a range of combinations of factors – for example, high and low
oven temperature, with long and short cooking time, 1 or 2 eggs,
etc. The cookies resulting from each of these trials would be
assessed for quality. A statistical analysis of results would tell
you which the most important factors are, for example oven
temperature affects cookie quality more than the number of
eggs.

With this knowledge you would design a process that ensures the
oven maintains the optimal temperature and you would be able to
consistently produce good cookies.

Shigeo Shingo – Poka yoke, source inspection, mistake proofing
and SMED (1919 1990)

Shigeo Shingos work is better known than his name. His work
includes; Poka yoke, source inspection, mistake proofing, SMED
(single minute exchange of die) and contribution to Just In Time
(JIT) production. Shigeo Shingo’s quality teachings were successful
as they were practical and action oriented.

Poka Yoke Poka yoke is about stopping processes as soon as a
defect occurs, identifying the defect source and preventing it from
happening again. Statistical quality inspection will ultimately no
longer be required, as there will be no defects to detect zero
defects. Poka yoke relies on source inspection, detecting defects
before they affect the production line and working to eliminate the
defect cause.

Mistake Proofing Mistake proofing is also a component of poka
yoke. Shingo introduced simple devices that make it impossible to
fit a part incorrectly or make it obvious when a part is missing.
This means that errors are prevented at source, supporting a zero
defects process. SMED (single minute exchange of die) Shigeo Shingo
developed SMED (single minute exchange of die) techniques for quick
changeovers between products. By simplifying materials, machinery,
processes and skills, changeover times could be reduced from hours
to minutes.

Quick changeovers meant products could be produced in small
batches or even single units, with minimal disruption. This enabled
Just In Time production, as pioneered by the Toyota company.

Just in Time Production Just In Time production is about
supplying the customer with what they want, exactly when they want
it. Traditional manufacturing tended to large batch

production as this gave economies of scale, however required
large inventories of raw materials and finished goods. Orders are
pushed through the system. The aim of Just In Time is to minimise
inventories by only producing what is required, when it is
required. Orders are pulled through the system, triggered by a
customer order. This reduces costs and waste throughout the
production process.

In summary, Shigeo Shingo focused on practical differences that
made immediate differences, rather than theory.

Tom PetersTom Peters is a hugely successful management guru,
considered by some to be the gurus’ guru.Peters best known book In
Search of Excellence, co-authored with Robert Waterman, presents 8
common themes of successful corporations: 1. A bias for action –
getting on with it. 2. Close to the customer – learning from the
customer. 3. Autonomy and entrepreneurship. 4. Productivity through
people. 5. Hands-on, value-driven – management walk the talk. 6.
Stick to the knitting do what you know. 7. Simple form, lean staff.
8. Simultaneous loose-tight properties have autonomy in some areas,
central ideas/values in others. These themes were based on
consultant company McKinseys 7-S model and from analysis of 43
fortune-500 companies. Peters emphasizes the role of people,
customers and action and the need to move away fromTaylor-ist
beancounters.

QUALITY POLICY OF TOYOTAToyota Turkey is a TOYOTA’s production
base for European market including Turkey. Our mission is to
contribute to Turkish society through producing high quality
vehicles in Turkey.

Customers are seeking high quality vehicles with lower costs
delivered to them in the specifications they need and in time with
their demands.

As customer satisfaction is our primary objective, and quality
is the prerequisite for that, it is our mandate to deliver what our
customers demand and maintain our competitiveness.

We have to accomplish this mission constructed on following
principles:

– Total Quality Control, based on mutual trust among ourselves
and involvement of every single member of our organization is our
Company life style. We cannot compromise for quality in anything we
do.

– We are committed to continuous improvement ( Kaizen ) in all
our activities and practices.

– We shall cooperate with and assist our supplierstro for
continuous improvement in their products, services and
practices.

– Our quality target is to be always better than competitors and
also to be better than other Toyota Motor Corporation plants,
producing CS No. 1 vehicles.

REASONS FOR SUCCESSFord and Chevy dominated the market
whenToyota , a virtually unknown importer, opened its first
American car dealership in California in 1957. More than 50 years
later, Toyota is now the world’s biggest carmaker, earning top
marks from experts and customers alike for quality and innovation.
U.S. News asked David Magee, author ofHow Toyota Became # 1 , to
highlight some of the reasons for Toyota’s success:

Long-term planning. Instead of responding to trends, fads, and
quarterly numbers, Toyota looks far down the road and tries to
develop products that will resonate for a long time. The best
example is the Prius hybridwhich debuted eight years ago, when a
gallon of gas in the United States cost a mere $1.50, and the
average car buyer cared more about cup holders than gas mileage.
The iconic hybrid, of course, turned out to be a breakthrough
vehicle, and Toyota sold its 1 millionth Prius this month. With gas
prices and fuel economy now a top concern, the Prius has helped
Toyota take a commanding lead in hybrid technology. Studious
speediness. Suppliers sometimes complain that Toyota takes forever
to make a decision. But that’s usually because the company
exhaustively researches all its options, then makes sure all the
major stakeholders agree on a course of action. Once Toyota decides
to build a car, however, the turbocharger kicks in: Toyota can move
a product to market faster than almost all of its competitors. An
open mind. Toyota learned many of its early lessons from Americans,
studying Ford Motor Co.’s production lines and the theories of
management guru W. Edwards Deming. That helped Toyota gain a
foothold in the United States, the world’s biggest car market, even
though the company was an outsider whose home

market of Japan was vastly different. Decades later, Toyota
still shows a knack for figuring out what customers want, sometimes
predicting American tastes better than the Detroit automakers that
supposedly have home-field advantage. Obsession with waste.
Toyota’s “continuous improvement” ethos is legendary throughout
industry, but Magee believes the real secret is a profound disdain
for inefficiencywhether it’s wasted time, excess material, or a
scrap of trash on a factory floor. “At a lot of companies, if
something’s going well and it’s profitable, they’ll move on to
something else,” Magee says. “But if Toyota can attach a hood in
eight minutes, they’ll find a way to whittle that down to four
minutes, then two minutes, then who knows…” Humility. Quick, name
a famous Toyota executive. Can’t? Well, here’s why: Toyota’s
company culture emphasizes teamwork over individual stars. “Toyota
executives don’t see themselves as bigger than the company or the
customer or the product,” Magee says. “It’s the most humble company
I’ve been in.” At Toyota factories, the plant manager doesn’t even
get a reserved parking space, a perk that is practically universal
among manufacturing companies

SCOPE OF IMPROVEMENTTMS is currently documenting its contract
management processes in preparation to extend these across other
Toyota business units. Since deploying contract management to IT,
procurement, Toyota Financial Services, and NAPO, TMS has opened up
the application to Toyota Canada, and Toyota Motor Manufacturing
North America as well. The goal is to identify software and IT
contracts and negotiate volume discounts and service levels across
Toyotas businesses. Barton expects that contract management will
better support Toyotas sourcing strategies, portfolio management,
and project prioritizations and delivery goals. In short,
standardizing and automating contract management operations fosters
the continuous improvement spirit of Toyotas kaizen culture.

SUGGESTIONS FOR IMPROVEMENTToyota has started a new way for
improving their product and services by giving the public to give
opinions and suggestions for improvements. Some of them are given
below.

1. The brand image is meaningless. It is the consumer’s image
that matters. To be a Toyota driver today is to display that you
are willing to put children in harm’s way-your children, the
children of friends, and strangers’ children too. People are
abandoning Toyota because this display jeopardizes their ability to
belong in society. This is the real problem the company must
solve.

2. Electricity generated from coal or oil will not make electric
cars environment friendly – the dirt is produced elswhere. But it
will help big cities to promote clean air. So think about the best
size, price and range for a popular car for all those big
cities.

3. I think the main issue for Toyota is the perception that
quality has suffered over the years, as Toyota has banked on its
reputation while relentlessly cutting costs and doing away with
whatever they can – which has resulted in a product which just
isn’t as good, and won’t last as long, as older models. Many recent
buyers complain that the fit and finish are not what they expected,
and of course the safety issues cannot be minimized. This is an
exercise beyond ‘get-back-to-basics’ and involves value for money
and paying more attention to what is important to consumers, in an
era of increasing competition not just from other Asian makes but
also the

resurgent Ford and European manufacturers. They need to
reevaluate the brand promise and what they’re willing to give up in
terms of profits to restore their reputation in the US with middle
class new car buyers

4. There is a rapidly growing electric car market. Their major
weakness is range anxiety. But not having to carry around a fuel
tank and engine of a hybrid is a benefit as well as a
liability.

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