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Toyota Prius Quality Management Report (Assessment)


Introduction

In this paper, I have used Toyota as the name of the organization that is involved in the manufacturing of hybrid cars under the trade mark Toyota Prius. Toyota Prius manufacturing plants are located in Japan and China.

Europe is the main market for its hybrid car. Europe command 48% demand for Toyota Prius. The paper outline the company mission statement as well as the objectives it seek to achieve in the automobile market.

In this paper the strategies to achieve total quality management in all functions has been discussed. The various guiding principles are also highlighted.

The paper also discusses ISO certification, its pros and cons if obtained by Toyota. The procedures of obtaining ISO certification are discussed in details.

Finally, the paper discusses the quality tool used by the company to resolve the present problem detected in Toyota Prius hybrid car.

Total Quality Management (TQM)

TQM is referred to as a set of activities applied by the organization in order to manufacture quality products. The products must be produced in the most effective and efficient manner to meet customer’s satisfaction.

TQM Mission

To sustain quality processes by providing the best customer experience through innovative products.

Through TQM, Toyota is gearing itself in achieving the following objectives.

Objectives

  1. To manufacture high quality cars.
  2. To gain high competitive value in the market place.
  3. To gain high efficiency in lead-time.
  4. To ‘go green’ by manufacturing environment friendly cars that emit less carbon.
  5. To increase market share.
  6. Improving suppliers relationship

The below diagram indicate the priorities taken by the customer when purchasing a product.

Diagram indicate the priorities taken by the customer when purchasing a product.

This is a clear indication that quality is very important to customer as it determines his/her second purchase of the same product (Anschutz 88).

TQM Principles

  1. The commitment of the management. Management has the duty of planning, supporting, reviewing and implementing changes in the organization.
  2. Empowerment of employees. Training, award and recognition are some of the things that need to be implemented.
  3. Decision making is based on fact and not instinct.SPC (statistical process control), FMEA and the 7 statistical tools are some of the tools used to make management decision.
  4. Continuous Improvement. This means that there should be improved standards and improved cross-functional processes.
  5. Customer centered. This means that quality and standards should be customer driven.

TQM emphasis continuous improvement at all levels of management from the top management that do the planning and decision making to the lower level employees who execute every detail of these decisions.

Through quality management, it is possible to prevent defects and avoid mistakes. This means that results are continuously improved over time as a result of continuous improvement in work environment, technology and people capabilities (Robson 50).

Improved capabilities will guarantee better results in the future. Under TQM, there is a general belief that faulty systems and poor managed processes are the main cause of mistakes made by people.

Therefore, it is possible to deal with the root cause of the mistake and avoid a repeat of the same in the future. This can be achieved by improving the poor process or changing it completely.

The Quality Guru: W Edward Deming

Edward believed that management is responsible for about 94% of quality problems faced by the company. The responsibility lies at management as well as individual level.

Edward came up with some guidelines applicable to any organization. The guidelines include:

  1. Creating a constant purpose that works towards continuous improvement of the product.
  2. Establishing and adopting a new management philosophy. This challenges the existing working norms.
  3. To use statistical evidence in resolving quality issues instead of depending on mass inspection.
  4. Ensure continuous improvement of supplies.
  5. Search for any problem in the organization. It is the responsibility of the management to continually work on the organization systems.
  6. Implementing modern methods of on job training.
  7. Implementing modern methods of supervising all workers involved in production process.
  8. The management must drive out fear from every employee to ensure effective working environment.
  9. Elimination of potential and existing barriers between departments.
  10. Eliminating numerical goals that do not outline the procedures and methods of achieving them.
  11. Eliminate the existing laid out numerical standards.
  12. Creating a good working environment for the hourly worker by eliminating barriers that deny him the pride of workmanship.
  13. Establish and implement vigorous retraining and on job education program.
  14. Creating a well structured management whose work is to implement all of the above points.

He believed that by adopting and implementing the above points, the management was serious in staying in business.

Specific Objective for Toyota

To reduce the number of complain made by the customers regarding the steering systems through continuous improvement on the production processes.

Quality Change 2 Days Training program

The main objective of the program is to enable employee understand quality management and their role in implementing policies that ensure continuous improvement in quality. This program provides trainees with general knowledge on quality management and skills on quality control procedures.

Course outline

The program is divided into theoretical and practical sessions. The subjects are introduced during the theoretical session. Further discussion is done during practical sessions through group work.

Theoretical session is carried out in the morning while practical session takes place in the afternoon. The subjects include quality controls, quality control measures and leadership.

Practical session

Tests and group discussion are carried out during the practical session to cover the subject taught in the morning during the theoretical session. Tests are administered to the trainees with little supervision by the trainer.

The groups then compare their results and discuss any arising problem. Trainers will provide clarification to issues that trainees fail to understand.

Work table in groups.

ISO 9000

The global economy has now changed to great extent and many companies have been able to overcome trade barriers. The business environment has become very competitive and most companies have aggressively increased their level of performance in order to survive.

Many companies have implemented plans that are efficient and effective which enables them to remain competitive. Today, ISO 9000 has become the most universally accepted plan.

ISO 9000 constitutes standards that ensure companies achieve quality assurance. The next paragraph explains what ISO 9000 is all about.

ISO (International Organization for Standards) was established by technical committees with the aim of providing guidelines to companies and other organizations so that they can improve their performance.

Through collective experience and knowledge of world experts that constitutes the technical committees, some guidelines were established with an aim of standardizing world industries.

Industries range from manufacturing, servicing, and telecommunication and government agencies.ISO is a Greek word and it basically means “same as”. Experts say that this is taken to mean that consumers’ expectations are met by giving them what they want.

Meeting the expectations of the consumers means that you’re giving them quality products. We can conclude by saying that ISO means quality.

What is ISO 9000?

There are five International standards that form ISO 9000.

  1. The ISO 9000 that outline the guidelines for the other four standards.
  2. The ISO 9001which is meant for suppliers whose work involves designing and customizing.
  3. The ISO 9002 that outlines installation and production standards.
  4. The ISO 9003 which outlines final test and inspection guidelines.
  5. The ISO 9004 which formulates guidelines for enabling managers develop quality systems in the organization.

It is important to note that ISO 9000 standards are guidelines and not rules as people perceive. These guidelines help organizations to organize processes and achieve quality assurance.

The most important impact of ISO 9000 is total quality of products. Quality assurance models can be adapted by the companies when they carefully follow these guidelines.

When accompany is ISO certified it means that it has been awarded ISO 9000 for following the set out guidelines in the ISO 9000.There is a lot of pressure from the customers for companies to get ISO 9000 approval.

There is great improvement in the operating procedures and reduction of costs derived from implementing ISO guidelines.

ISO certification become a very powerful marketing tool for the ISO certified companies and bring assurance of the customers that the products they are buying from these companies are of high quality standards.

Most customers especially in Europe are demanding products that are ISO 9000 certified making every company doing business in the region seek ISO certification.

When more companies become ISO certified competition increases in the market making each company produce quality products at a reduced cost in order to gain market share.

The Advantages of ISO 9000

One of the advantages of ISO certification is that it will allow for neutral third party assessment of all Toyota processes. There is tendency for Toyota to underestimate some issues affecting their operations.

The auditing done by the neutral third party ensures that Toyota implement quality management systems that are up to standard with the rest of the industry.

The second advantage of having ISO certification is the fact that there is great exposure of the executive management.ISO audits help in identifying any problem within the various management levels including the executive.

Any hitch in the quality system is brought to the attention of the executive, thereby making the necessary adjustments. Since there is constant measurement of quality, any defect in the procedure will be taken care of through corrective action.

The third advantage derived from ISO certification is the fact that it is a common universally accepted type of certification. The implementation of new systems and hiring key personnel become easier for Toyota.

Certification ensures that procedures are defined and documented correctly so as to ensure consistency of output.

The documentation of procedures ensures that new employees are able to follow easily and that defects are identified at an early stage. This promotes better management control and clear understanding of all Toyota operations.

The fourth advantage of ISO certification is that Toyota has the potential of retaining or increasing its market share as well as increasing sales. It becomes much easier to sell in new market when the company has the endorsement of ISO.

In general there are more benefits that accrue from the ISO certification. Such benefits include:

1.It brings standardization of procedures by providing guidelines to every function in Toyota that affect the quality of Toyota Prius.

2.It ensures that information is consistently disseminated. There are three areas of standards that ensure information is consistently disseminated. Control of quality records ensure good maintenance of quality records in all functions of the company.

Design control ensures that any changes in the operating procedures are known to all parties so as to avoid ad-hoc engineering changes. A system that deals with approving, revising and distributing documents as well as the deletion of the obsolete documents is provided for in the document and data control standards. This ensures proper functioning of the quality systems at all levels.

3.Use of statistics to promote improvements. Statistical techniques need to be identified and implemented by the company as it is outlined in the ISO 9000 series of standards. The main focus of these standards is on processes and product features.

The statistical techniques provided by the standards are very flexible and can be used by any organization since more emphasis is on corrective and preventive actions.

The use of these statistical techniques allows the company to have data-based management that improve business processes rather than relying on instinct to solve any arising issue in the business.

4.The global acceptance status.ISO 9000 series has continued to gain acceptance in all continents as a standard of quality.

The fact that it can be used as a trademark for verifying the quality of goods and services, many organizations all over the world have adopted it as a standard of quality.

This brings relief to companies as they don’t have to comply with numerous quality standards imposed in their locality. It also goes a long way in reducing costs of compliance.

5.Improve customer experience and responsiveness. The global market continues to change with time. There is increased competition in the business environment.

For Toyota to survive in the market, it must prove that its Toyota Prius car supplied to the market is of superior and high quality.

The ISO certification act as a guarantee to the customers that quality standards have been met when producing goods or services. There is competitive advantage that ISO registered companies have over those that are not.

6.Promoting continuous improvement. The training programs on quality that exist in companies is not good enough to sustain continuous improvement.

The full implementation of quality systems that can be measured against the set standards is the answer to sustaining improvements in quality procedures.

This continuous improvement is achieved by the fact that ISO series provide auditing at the initial registration as well as on-going surveillance audits.

This increase assurance to both customers and vendors that the quality systems are functional and that they are being monitored periodically (Hoyle 99).

Disadvantages of ISO certification to the organization

  1. High initial costs. The change in the operation can be expensive for the fact that Toyota employees must be trained on both the implementation and use of ISO 9000 procedures (Morris 142).
    There is tendency in every organization for employee to resist operations changes and stick to their old working habits. The resistance will not only eat into company profits but also affect the morale of the employees.
  2. There is no 100% assurance on quality. The implementation of ISO standards is not a ticket to have better quality products.
    The standards only provide guidelines to use functional systems in the organization operation but it doesn’t demand them to be good. This problem is mostly faced by newly ISO certified companies.
  3. Time wastage due to frequent audits. Employees spend much effort in analyzing the findings of full systems audits that must be carried out not forgetting the annual surveillance audits.
    The annual surveillance audits become unnecessary for companies that have robust internal audit systems.

Process of Obtaining ISO Certification

1.The management must reach a decision of obtaining the ISO certification. The management at all levels must be committed in their actions.

2.The management must appoint a project manager who will have the authority to internally manage the ISO project.

3.The management v through the project manager must carry out an assessment of the current quality systems against the requirements of ISO 9000.The project manager should then create a plan of the things that need to be done.

4.The project manager should now start working on the plan by outlining the existing processes and documenting the system.

The standard requirement should be met through revising and improving the processes by using ‘PDSA’ (plan, do, study, study, and act). (Hoyle 120).

‘PDSA’ (plan, do, study, study, and act).

The management must create a team lead by the project manager to design and build the system.

5.The project manager should then review and audit the system internally and make the any necessary adjustments.

6.The management should then select a certifier (external auditor) and schedule a date when the systems audit will be carry out.

7.If successful, the certifier will then award the organization with a certificate.

Quality Tool: Pareto Analysis

In the recent past Toyota has been recalling a lot of Toyota Prius car it manufacture in Japan manufacturing Plant.

The major complain by the customers is the defective steering system of the car. To resolve this problem and win back customer loyalty, Toyota has resorted to using quality tool to avert the issue.

For Toyota be competitive and remain successful in the long-run, the quality of the car manufactured is important. It becomes crucial for Toyota to come up with tools for measuring quality of the cars.

Most of these tools are available for use. Pareto analysis is one the tool that is used for quality control. It is commonly referred to as 80/20 rule and was discovered by Vilifredo Pareto as he carried out his studies in wealth distribution.

Interestingly, he discovered that 80% of wealth was controlled by 20% of the entire population. In today’s world, Pareto analysis basically means that 80% of quality issues in any end product are caused by 20% of the entire production processes.

It therefore becomes important to indentify the few critical problems, solve them and drastically improve the quality of the end product.

Using Pareto Analysis in Toyota

The first procedure in using Pareto analysis is to identify the potential causes of poor quality.Through brainstorming among the Toyota engineers and surveys, several causes have been identified.

The main objective is to identify items that result to poor quality cars. For example, Toyota that manufactures Toyota Prius has identified four potential causes that have made consumers return their cars because of poor steering system.

The identified causes include: poor assembling procedures, poor braking system, faulty electronic installation and transit problem.

The second procedure is to act upon every mentioned item. Careful assessment and analysis is carried out over a given period of time that gives a statistical sample. Quality control measures are then taken so as to resolve the potential causes identified in the first procedure.

From our example, each time a car has been returned due to ‘poor assembling procedure’, we would add one to the tally for that cause. The process continues until we get the subtotals of the results.

The third procedure involves summarizing and graphing of the results obtained from the previous procedures. To obtain the total number of defects, we total the numbers of each cause of defects.

The percentage of each defect is obtained by dividing the subtotal of each defect against the total number of defects and then multiplying by 100.

The obtained percentages are graphed in a histogram where poor quality is represented by the x-axis and the respective percentages on y-axis. The Pareto histogram is normally referred to as Pareto Chat.

The final procedure involves interpretation of the graphed results. From the Pareto chart (see Appendix 1) it can be observed that almost 80% of the defective cars are caused by 20% of potential causes. Toyota can now create quality control measures to avert the steering system problem.

To further understand Pareto analysis I have come up with fictional data showing the calculations and the histogram presentation. The data is shown in part 1 of appendix 1.The graphing of the results is shown in Appendix 1, Part 2.

After careful analysis Toyota has perfected electronic installation in order to eliminate 67% of defective cars. The method used in body parts transit can also be resolved to eliminate further 22% defective cars.

Conclusion

Through out the paper quality has been discussed at length, and it remains the objective of Toyota to manufacture quality cars. Quality will not only guarantee customer satisfaction but also reduce the number of defective cars.

Toyota and any other organization must employ procedures and processes that ensure the highest quality standards. It has been observed that companies that implement total quality management systems are able to produce quality products at minimal cost and meet customer expectations.

However, caution should be taken when implementing these quality processes as the management should implement those approaches that are tailored to meet the current and the future needs of the organization.

Works Cited

Anschutz, Eric.TQM America: How America’s most successful companies profit from Total Quality Management. Bradenton: McGuinn & McGuire Publishing, Inc, 1995. Print.

Hoyle, David. ISO 9000 Quality Systems Development Handbook. Great Britain: Butterworth Heinemann, 1998. Print.

Morris, Alan S. Measurement and Calibration Requirements for Quality Assurance to ISO 9000. New York: John Wiley & Sons, 1997. Print.

Robson, Mike. Quality Circles: Member’s Handbook. Aldershot: Gower Publishing Co. Ltd, 1984. Print.

Appendix 1

Part 1

Pareto analysis.

Part 2

Pareto chart.
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