Case 4 1 Toyota Motor Corporation Toyota Motor Corporation Leading Global Manufacturer Mot Q31409849

Case 4-1  Toyota Motor Corporation

Toyota Motor Corporation is a leading, global manufacturer ofmotor vehicles. It has seven key operating principles that drivewhat the company does and how it does it:

•    Honor thelanguage and spirit of the law of every nation and undertake openand fair business activities to be a good corporate citizen of theworld.

•    Respect theculture and customs of every nation and contribute to economic andsocial development through corporate activities in their respectivecommunities.

•    Dedicate ourbusiness to providing clean and safe products and to enhancing thequality of life everywhere through all of our activities.

•    Create anddevelop advanced technologies and provide outstanding products andservices that fulfill the needs of customers worldwide.

•    Foster acorporate culture that enhances both individual creativity and thevalue of teamwork, while honoring mutual trust and respect betweenlabor and management.

•    Pursuegrowth through harmony with the global community via innovativemanagement.

•    Work withbusiness partners in research and manufacture to achieve stable,long-term growth and mutual benefits, while keeping ourselves opento new partnerships.

The company consists of three business units: automotiveoperations, financial services, and all others. The company wasstarted by Kiichiro Toyoda in 1937 and is headquartered in Toyota,Japan. The company has a workforce of more than 348,000 employees,and it sells its vehicles in 190 countries and regions. The companyhas won many industry awards including most trusted brand,longest-lasting vehicles, and best overall value.

Toyota has established itself as an industry leader in quality,reliability, and efficiency in its automotive operations. Itsmethods for product development, production, and operations haveserved as the benchmark for others in the industry. One set ofpractices that has enabled Toyota to achieve a sustainablecompetitive advantage is the Toyota eight-step problem-solvingprocess that it deploys throughout its global operations. The stepsinclude the following:

•    Step 1:Clarify the problem

•    Step 2:Break down the problem

•    Step 3: Setthe target

•    Step 4:Analyze the root cause

•    Step 5:Develop countermeasures

•    Step 6:Implement countermeasures

•    Step 7:Monitor results and process

•    Step 8:Standardize and share success

Clarifying the problem (step 1) involves Toyota management andemployees working in teams to obtain direct experience with theproblem for themselves to understand the nature of the problem.Breaking down the problem (step 2) focuses on further analyzing theproblem and decomposing it into subproblems that are more specificand manageable. Setting the target (step 3) involves Toyotamanagement and workers agreeing to challenging goals for solving aproblem (e.g., reducing defects) as well as mapping out a plan andtimeline for achieving the objectives. Analyzing the root cause(step 4) refers to collecting empirical data to understand theunderlying causes of a problem. This step is typically helpful interms of identifying multiple causes of the problem. Developingcountermeasures (step 5) focuses on teams of Toyota managers andworkers brainstorming specific solutions to remove the root causesof a problem. Implementing countermeasures (step 6) is the actualdeployment of the selected countermeasure. Monitoring results andprocess (step 7) is based on a process called Plan-Do-Check-Act(PDCA) that supports the effective implementation and continuousimprovement of a countermeasure. Basically, PDCA involvesimplementing a countermeasure, evaluating its effectiveness,modifying the countermeasure to further improve it, and thenimplementing that countermeasure as a cyclical process.Standardizing and sharing success (step 8) focuses on“institutionalizing” the new practice or process into Toyota’soverall production and operational system. This could involveredesigning a process, changing rules and policies, job redesign,and realigning the culture of the organization. This also involvescommunicating the new practices or processes to others in theToyota organization so that they may also learn from the success ofthe change and obtain guidance about how they can achieve similarresults.

The decision-making and problem-solving process used at ToyotaMotor Corporation has enabled it to produce some of the mostpopular and reliable vehicles in their respective market segmentsincluding the Camry sedan and the RAV4 sport utility vehicle.

1. Start with a brief (1-2 paragraphs) summary of the case.

2. List the management issues short term & longer term yousee in the case.

3. Propose a solution to fix the major current problem and alonger term course of action to prevent the problem.