MANAGEMENT SCIENCES DEPARTMENT

Semester : 6th Assignment No:02

Topic: Application of TQM in TOYOTA Motors Corporation Subject: Total Quality Management Submitted by: Siraj Munawar (Bs-910) BBA (hon) Submitted to: Madam Maimoona Date of Submission:

ISLAMIA COLLEGE PESHAWAR

(Chartered University) Acknowledgment
This assignment would not have been possible to complete without the support of my teacher Madam Maimoona. I want to express my gratitude to her supervision and guidance which was abundantly helpful and offered valuable assistance. Special thanks to all my friends especially Mehran and Ahmad Alam for sharing the literature and giving valuable assistance. Finally, I want to express my gratitude to my beloved family, for their understanding and endless love through the duration of my studies.

S.No 1 2 3 4 5

Title Abstract Introduction to TMC Introduction to TQM TQM in TMC How TMC Implemented TQM How TMC implemented Cost Reduction

Page No. 4 5 6 8 8

Table of Contents

Abstract
The TOYOTA Motor Corporation company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota AA. TQM is a management approach of an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society. The world of automotive manufacturing in particular is one of the king of Toyota, where Toyota has a management system that is reliable in managing all aspects of management, TQM (Total Quality Management) which is a symbol of the triumph of knowledge management in a very interesting to learn.

TOTAL QUALITY MANAGEMENT APPLYING TO TOYOTA MOTORS CORPORATION

History of TMC: Toyota Motor Corporation (Japanese) commonly known simply as Toyota and abbreviated as TMC, is a multinational automaker headquartered in Toyota, Aichi, Japan. In 2010, Toyota Motor Corporation employed 317,734 people worldwide . TMC is the world's largest automobile manufacturer by sales and production. The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota AA. Toyota Motor Corporation group companies are Toyota (including the Scion brand), Lexus, Daihatsu and Hino Motors, along with several "non-automotive" companies. TMC is part of the Toyota Group, one of the largest conglomerates in the world.

Origin: Toyota's origins trace to the Toyoda Automatic Loom Company and its founder, Sakichi Toyoda, who developed a loom licensed to a British company for about 1 million yen. The licensing agreement financed the Toyota Motor Company under Toyoda's son, Kiichiro. Cars were built on a modest scale, with only 1,757 produced through 1943. Toyota Motor Corporation is headquartered in Toyota City, Aichi and in Tokyo. Its Tokyo head office is located at 1-4-18 Koraku, Bunkyo-ku, Tokyo 112-8701, Japan. Nagoya Office at 4-7-1 Meieki, Nakamura-ku, Nagoya City, Aichi Prefecture. In addition to manufacturing automobiles, Toyota provides financial services through its Toyota Financial Services division and also builds robots. The 1960s Toyota returned with the Corona in 1964. Its name meant "crown." It featured a 90horsepower engine capable of a comfortable speed on American roads of up to 90 mph. It sold for $2,000. Sales began modestly at 6,400 in 1965, but skyrocketed to 71,000 in 1968, and then an astounding 300,000 for the 1971 model year.

The 1970s For all of its success, Toyota was still a niche car siphoning sales from the giant importer Volkswagen. The muscle car wars were in full swing and unbridled horsepower was the name of the game. But the 1973 oil embargo and 1978 fuel shortages changed the automotive landscape forever. Toyota was poised to capitalize on the American car owner's hunger for a well-built, fuel-efficient car. Toyota obliged with its new Corona, the Corolla and the Celica. Today Toyota entered the luxury car field in 1989 with its Lexus line. By the 1980s, Toyota had a secure hold on the North American import market. The automaker recognized the Lincoln and Cadillac had lost prestige due to fuel-economy concerns and downsizing. Toyota exploited the weakness by introducing the luxury Lexus in 1989, further eroding Detroit's automotive market share. But the 2008-2009 recession struck Toyota hard, with almost $8 billion in losses expected for 2009. Total car sales were expected to drop from 6.5 million to 4.9 million at the end of the fiscal year in March 2010.

INTRODUCTION TO TQM:
"TQM is a management approach of an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society."

In Japanese, TQM comprises four process steps, namely: 1. Kaizen Focuses on Continuous Process Improvement, to make processes visible, repeatable and measureable. 2. Atarimae Hinshitsu Focuses on intangible effects on processes and ways to optimize and reduce their effects. 3. Kansei Examining the way the user applies the product leads to improvement in the product itself. 4. Miryokuteki Hinshitsu Broadens management concern beyond the immediate product. TQM requires that the company maintain this quality standard in all aspects of its business. This requires ensuring that things are done right the first time and that defects and waste are eliminated from operations. Origins Although W. Edwards Deming is largely credited with igniting the quality revolution in Japan starting in 1946 and trying to bring it to the United States in the 1980s, Armand V. Feigenbaum was developing a similar set of principles at General Electric in the United States at around the same time. "Total Quality Control" was the key concept of Feigenbaum's 1951 book, Quality Control: Principles, Practice, and Administration, a book that was subsequently released in 1961 under the title, Total Quality Control (ISBN 0-07-020353-9). Joseph Juran, Philip B. Crosby, and Kaoru Ishikawa also contributed to the body of knowledge now known as TQM. The American Society for Quality says that the term Total Quality Management was first used by the U.S. Naval Air Systems Command "to describe its Japanese-style management approach to quality improvement. This is consistent with the story that the United States Department of the Navy Personnel Research and Development Center began researching the use of statistical process control (SPC); the work of Juran, Crosby, and Ishikawa; and the philosophy of Deming to make performance improvements in 1984. This approach was first tested at the North Island Naval Aviation Depot. In his paper, "The Making of TQM: History and Margins of the Hi(gh)-Story" from 1994, Xu claims that "Total Quality Control" is translated incorrectly from Japanese since there is no difference between the words "control" and "management" in Japanese. William Golimski refers to Koji Kobayashi, former CEO of NEC, being the first to use

TQM, which he did during a speech when he got the Deming prize in 1974. The History of TQM Originally what got TQM started was TPM "Total Productive Maintenance". It was invented by Toyota, not by W. Edwards Deming or by the U.S. Navy as many people think. In fact, Deming strongly disliked the TQM term that later was attached to his teachings by other people. Deming's central thesis was that even though mass-produced items are supposed to be identical, in practice they will always vary from one another. Therefore, the industrial process should include a cycle for observing these variations and changing the process in order to reduce them. He called this cycle the "Shewhart Cycle" and it came to be known as Plan-Do-Check-Act (PDCA)--the "act" part of the cycle being where the process is changed to reflect quality checks..

TQM in TMC:
Toyota introduced Total Quality Management (TQM) as long ago as 1961 and was the first to introduce Kaizen (lit. improvement) to represent the concept of continuous improvement. Toyota Motor Corporation uses total quality management, with a specific focus on the Toyota Production System and the three main tools by which Toyota Motor Corporation manages total quality management. These concepts and the associated culture are practiced in every aspect of Toyotas operations, including information systems. Toyota invented the concept of Just in Time in 1938 (often described as Just in time, stop the line). The objective was not simply to reduce inventory, as is often thought, but to avoid building up too much stock with defects which would have to be written off or corrected. Just in Time and this culture of quality evolved into the Toyota Production System and its more generic equivalent, Lean Manufacturing, which is the benchmark for manufacturing organisations across the globe.

How toyota implemented TQM:

The most important of these efforts are what took place at Toyota in the late 1960s. At that time Toyota, a truck manufacturer, decided to begin producing passenger cars and they made a determined effort to appraise and improve their methods at a fundamental level. They succeeded phenomenonally at this and by 1980 were producing the highest quality automobiles in the world. They called their new methods "Total Productive Maintenance". What Toyota discovered was that the dominant cause of product defects was wear in the machines that made the parts. In turn this wear was caused by the accumulation of dirt and chips (metal shavings). The problem was that workers followed the basic

American practice which was to operate a machine until it broke and only then call in an engineer to fix the machine. In some cases they would just throw the machine away and order a new one from America. This resulted in defective parts as the machine wore down and lack of productivity while the machine was waiting to be fixed or replaced. Another complication was that workers tended to move from machine to machine and often confusion resulted. How could systemic problems like this be fixed? To solve the problems Toyota completely changed the way it operated its plants. First of all, they stopped moving workers around as much and assigned workers to have responsibility over individual machines. The next step was to require workers to keep special notebooks documenting their machine. Before this was done machines were more or less black boxes to the workers. The new way required the men to document not only how the machine operated, but its entire maintenance history and how it worked internally. Workers started taking apart their machines to learn about them and document their findings. Instead of hoarding mechanical knowledge in a few absentee engineers every worker started to have this kind of expertise. The next step was to tackle the dirt. In the 1965 Toyota's factories looked like American factories: chips and dirt everywhere. They would change that. Since dirt was responsible for the wear that was causing defects it would be eliminated. They started on the outside by creating sweeping and cleaning regimens. Then they started regularly taking apart their machines to clean them. Finally they put their expertise to work and started designing special guards and covers to keep dirt and chips out of machines permanently. The last step in the equation was systematic preventative maintenance. Part of their documentation efforts was to carefully study any irregularity in machine operation. For example, if a machine began to vibrate in the old days they would ignore it until the machine broke, like Americans. In the new way they would immediately stop any machine that was vibrating and take apart the machine to discover the cause. Because they now actually had started to learn how the machines worked internally this was possible. The worker (NOT an engineer) would then attempt to fix the problem. In some cases these procedures led Toyota to actually redesign and modify parts inside their tooling to improve it. The results of these efforts are well-known: not only did Toyota start making the highest quality cars in the world but by 1980 they dominated the import market. Today Toyota is the most profitable car manufacturer in the world by a large margin.

Annual Comparisons of Inventory/Sales in toyota N Mean Std. Deviation Std. Error Mean Year -6 to Year -5 A 9 .0155 .22906 .07635 C 20 -.0006 .16529 .03696 Year -5 to Year -4 A 9 .0740 .28828 .09609 C 21 -.0604 .16166 .03528

Year -4 to Year -3 A 10 .0073 .23758 .07513 C 25 .0534 .56019 .11204 Year -3 to Year -2 A 11 -.0049 .15891 .04791 C 26 .1169 .37847 .07422 Year -2 to Year -1 A 12 -.0659 .17301 .04994 C 28 -.0100 .25650 .04847 Year -1 to Year 0 A 13 -.0117 .17422 .04832 C 28 -.0291 .28026 .05296 Year 0 to Year 1 A 13 -.0572 .27232 .07553 C 28 .0311 .34559 .06531 Year 1 to Year 2 A 12 .1863 .49144 .14187 C 28 -.1237 .33782 .06384 Year 2 to Year 3 A 10 -.0694 .24773 .07834 C 23 .0118 .28253 .05891 Year 3 to Year 4 A 10 -.0040 .09648 .03051 C 23 .0886 .26837 .05596

Toyota, How Implementations Cost Reductions.

The world of automotive manufacturing in particular is one of the king of Toyota, where Toyota has a management system that is reliable in managing all aspects of management, TQM (Total Quality Management) which is a symbol of the triumph of knowledge management in a very interesting to learn. Toyota has some of the jargon in it to create a product that is reliable and able to enter the automotive market worldwide. Some good implementation in Toyotas manufacturing system is: 1. QCC (Quality Control Cycle) QCC = Quality Control Cycle is a cycle in which each assembly must prioritize the good quality of raw material quality, process quality, and human qualities. With attention to these aspects will be obtained a product which is having a very high quality where the controlling every aspect mentioned above, will eliminate all products that are not in accordance with established standards. 2. Zero inventory QCC = Quality Control Cycle is a cycle in which each assembly must prioritize the good quality of raw material quality, process quality, and human qualities. With attention to these aspects will be obtained a product which is having a very high quality where the controlling every aspect mentioned above, will eliminate all products that are not in accordance with established standards.

3. Milk Run Milk Run is a pickup system made by Toyota itself to take their goods to all of Toyotas suppliers are located near the plant or near their areas, this system does not apply to part of the supply through the import system. With the pick up part in all of Toyotas suppliers by using Toyotas own vehicles will save the transportation costs are usually charged by suppliers to Toyota in delivering parts be submitted by Toyota.

Conclusion:
Toyota Motor Corporation (Japanese) commonly known simply as Toyota and abbreviated as TMC, is a multinational automaker headquartered in Toyota, Aichi, Japan. In 2010, Toyota Motor Corporation employed 317,734 people worldwide . Toyota has a management system that is reliable in managing all aspects of management, TQM (Total Quality Management) which is a symbol of the triumph of knowledge management in a very interesting to learn.

Bibliography:
1.Anon. (1989). AIAA/ADPA/NSIA 1st. National Total Quality Management Symposium, Denver CO, 1-3 November. 2.Breisch, R. E. (1996). "Are You Listening," Quality Progress, January, pp. 59-62 3.Gevirtz, C. (1994). Developing New Products With TQM, McGraw-Hill, Inc., New York NY. 4.Gitlow, H. S. and S. J. Gitlow (1987). The Deming Guide to Quality and Competitive Position, Prentice-Hall Inc., Englewood Cliffs NJ. 5.Aguayo, Rafael (1991). Dr. Deming: The American Who Taught the Japanese About Quality. Fireside. pp. 4041. 6.Retrivied on June 30,2011. From www.hbs.edu/research/facpubs/workingpapers/papers2/0102/02-043.doc