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The details of major strategies involved in 'Global Vision 2010' were increased motorisation in the emerging markets and achieve global share "of about 15 percent in the early 2010s" Reforms in technology and its development were accelerated on a global scale, particularly in the areas of nano technology, materials and safety.
Our case study is how Toyota became a leader in automobile manufacturing and became a role model to all manufacturing industries (Toyota production systems) with its innovative systems and technologies like TQM and JIT. Our case also involves how the target of 15% market share in Toyota's Global Vision 2010 has been overblown. The global vision was to follow the Toyota guiding principles to become the most admired company in the world through customer satisfaction and value. When Toyota's North American operation turned Global Vision 2010 into operating goals, it identified four areas: customer satisfaction, supplier development, lower costs, and people development. The centre of the model was a self-reliant Toyota (Akio Toyoda, Toyota's president), he now says that the company grew too fast and outstripped its ability to develop the necessary human resources.
2.1 Change interventions
The incredible consistency of Toyota's performance is a direct result of operational excellence. Toyota has turned operational excellence into strategic weapon. It was the way Toyota engineered and manufactured the autos that led to unbelievable consistency in the process and product. The quality improvement methods like just-in-time, kaizen, one-piece flow, jidoka, and heijunka techniques revolutionised to "Lean manufacturing". But tools and techniques are no secret weapon for transforming a business. Toyota continued success at implementing these tools stems from a deeper business philosophy based on its understanding of people and human motivations. Its success is ultimately based on its ability to cultivate leadership, teams, and culture, to devise strategy, to build supplier relationship, and to maintain a learning organisation (Jaffrey K. Liker).
The unique approach for excellence is its manufacturing philosophy, called the Toyota Production System (TPS). The development of Lean tools has dominated manufacturing trends. The lean enterprise is defined as a five step process: defining the customer value, defining the value stream, making it flow, pulling from customer back, and striving for excellence. The Toyota way of success is defined by these principles (Jeffrey k. Liker):
Management decisions are based on long term even at the expense of short-term financial goals. Aligning the whole organisation towards a common purpose of generating value for the customer, society, and economy is the Toyota philosophy and evaluating every function in the company in terms of its ability to achieve their goals.
Right process will produce the right results:
Add value to the organisation by developing your people and partners:
Continuously solving root problems driver organisational learning:
In the early development of TPS, its chief architect, Taiichi Ohno discovered that people were not ready with some of ideas. Multiskilled workers are necessary to achieve single-piece flow in a machine shop. He encountered resistance and in the process he emphasised on developing the people to meet these standards and support the methods. People must be trained and develop thinking capabilities to bring problems to the surface and solve themselves.
Change process is managed by each and every employee in the organisation. Toyota employees love the change to happen. Every day they come to work anticipating some kind of change the way they do their work. The main focus is middle managers who directly involved in the change process. Toyota developed the team leaders to implement the change rapidly who directly deal with direct work force.
The main reason anticipated by the Toyota's downfall in quality problems is deviation in change process by middle mangers particularly in headquarters being arrogant, overconfident and least bothered about the problems of customers and strongly believed in their culture.
Toyota's TPS is a methodology as a sophisticated system of production in which all of the parts contribute to its roots focuses on supporting and encouraging people to continually improve the process. It is not just a set of lean tools like just-in-time, 5S, kanban, etc. TPS is built around removing waste that does not add value to the product.
The recent troubles (Mass recall of Toyota cars due to quality problems in 2009 and 2010) show that TPS and lean will no longer work in the modern spiky environment of production. Toyota production system is primarily focused in the manufacturing shop floors. Toyota traded some of the essential elements of TPS in order to gain market in North America. Some the tools of Lean will work best when order flow is predictable and does not increase rapidly. Toyota quality problems are not an indictment of TPS itself ("Jamie Flinchbaugh co-founder and partner of lean Learning Center"). Toyota TPS culture is not adopted to its best in North American suppliers. In the process Toyota may have lost track in their supply chain that caused the massive quality problems.
Toyota confused about their priorities has been traditionally following: First, Safety, Second Quality, and Third, Volume. They anticipated growth at a faster pace than developing people at the same pace. The recent recall crisis echoed a sentiment and led to political crisis and touched the roots of Toyota culture when Toyota president Akio Toyoda prepared a testimony for the House Committee on Oversight and Government Reform, (February 24, 2010, USA). The systems in North America, their policies that govern how they do things are all subject to social networks and that's necessary to maintain and sustain them. Toyota is hugely successful in its manufacturing systems from many years and the recent quality problems that led to criticism seem to be based on politics or ignorance rather than facts. Toyota overtook all the American automakers from last several years and now the recent downfall in Toyota quality cars is opportunistic and heavily bashed by media.
Toyota didn't hide the problem. For Toyota problem is a treasure and their culture is to find the root cause of problem and each problem provides them an opportunity for improvement. For the recent mass recall of cars due to quality problems Toyota waited for some time for what extent to which it is responsible and also the other parties who are involved. Toyota identified safety for customers are their top priority and reaching their customers to rectify the problems.
3 RECOMMENDATION AND CONCLUSION
The ever-growing demand from customers led to the complexity in making wide range of vehicles in the world. The reputation of Toyota is badly damaged due to recent quality problems of mass recall of millions of cars. Toyota initially anticipated that they can handle and manage the complexity as they got reputation of best manufacturing company in the world. It is true that Toyota is good than any other company in managing complexity but due to overconfidence the amount of complexity they took in a way is beyond their capacity. Even though Toyota is growing faster from last decade the volume of production and the number of production lines for different models and the social pressures of market demand multiplied to be trapped in quality problems.
Toyota must focus on customer raising a problem. Toyota is overconfident about its TPS (JIT and TQM) and showed arrogance that the customer is making mistake in handling the product. This type of pragmatic nature towards customer made them number one enemy. However in the long term race Toyota can't avoid complexity instead they have to keep on building capabilities stick to their philosophy finding the root cause of problem and solve the problems. Since all the problems originated from design quality problems rather than manufacturing quality problems there is no immediate threat to their TPS culture. The problem is with middle managers put away from customers not to listen the problems they raised. The problems now were not a big problem a decade ago. Due to pressure of market demand created tremendous load to designers.
At this stage we can't say Toyota is out of race and will be the great chance for other companies to grab the market share of Toyota in an easy way. Now the companies will only survive who realises quality is very important than mass production and in particular, safety is number one. If the companies develop this philosophy they are the winners.