The term Total Quality Management refers to the process that helps to improve production quality and consumer satisfaction. Moreover, this process also helps to implement continuous improvement of organizational processes (O’Neill, Sohal and Teng 2016). In order to satisfy the consumers, it is highly important to focus on the employee motivation at equal degree, because if employees are not motivated, then they will be unable to deliver quality service to the consumers. The purpose of this report is to evaluate how implementation of quality management tool can satisfy both consumers and organizational requirements. In this era of market competition, consumers’ buying behavior is changing rapidly (Azar, Vashist and Vashishtha 2015). In order to fulfill changing needs and demands of the consumers, organizations are improving product quality. There are several tools, which helps to improve and monitor production quality. In this report, the chosen organization is Toyota, which is a car manufacturing company.
Toyota is a Japanese car manufacturing company, which has been founded in 1937 by Kiichiro Toyoda. As of 2014, the total number of employees was 338,875 and according to 2012 financial report, the company is the largest automobile manufacturer of global market. Toyota 86, Toyota Agya , Toyota Allion, Toyota Alphard and Toyota Avalon are some brand of Toyota in UK market. The company merely focuses on the product quality in order to satisfy the consumers’ needs and requirements.
Purpose of Total Quality Management
The purpose of implementing total quality management is to improve consumers’ experience by improving product quality (Singh and Singh 2015). The goal of the organizations is to set realistic goals and objectives for enhancing overall organizational performance. A quality management process helps to monitor organizational performance for identifying the processes, which are not required. In this process, an organization can manufacture high quality product at low price (Rao 2015). On the other hand, total quality management also focuses on the employee involvement. Providing healthy working environment helps the employees to increase their performance quality, which actually reflects on the manufacturing quality. Furthermore, a motivated workforce can perform according to the organizational requirements, which is highly important for achieving broader organizational goal (Zhu and Azar 2015). Following are the principles of total quality management, which influences an organization to adopt total quality management process.
Consumer-focused: In this competitive era, every organization is implementing strategies for satisfying the consumers (Madar 2015). In order to improve product quality, an organization may adopt different strategies such as employee training and improving process. However, the strategies adopted by the organization depend in the industry type (Nanda 2016). For example, in case of manufacturing organization, an organization can adopt lean management strategy. On the other hand, a service-based industry can adopt six-sigma approach for adopting consumer-based strategies (Zeng, Tam and Tam 2015).
Employee involvement: Employee engagement is one of the most important factors, which helps an organization to perform efficiently (Gonzalez, Quesada, Davis and Mora-Monge 2015). As the business environment is highly competitive in now days, most of the organizations are paying attention to the employee retention strategy. In this manner, it is possible to improve and maintain product or service quality.
Implementation of Total Quality Management in Toyota (Just in Time)
In Toyota, the company has adopted the Just in Time (JIT) approach for improving product quality as well as organizational profitability. This approach helps an organization to reduce unnecessary organizational processes for reducing costing and apart from that, this process helps to utilize the resources completely before investing in new resources (Grover, Chopra and Mosher 2016). For example, the company only purchases the raw materials when it required. Toyota manufactures cars depending on the market demand of the product. For example, Toyota manufactures a brand after knowing the actual market demand of the product. In order to adopt this approach, it is highly important to have a prompt workforce who could response efficiently as per market demand (Garc?a, del R?o and Simonetti 2016). Moreover, the company should have a strong supply chain management, which can meet urgent requirement of the company. Therefore, it can be said that there are different risk factors in JIT approach, which can affect performance of the organization. It is highly important to implement effective strategies for reducing negative effects of just in time approach (Spofford Jr, Russell and Kelly 2016). Therefore, Toyota has adopted various strategies for reducing negative impacts of this particular approach. Following are the strategies adopted by Toyota, which helps the company to adopt just in time approach effectively.
WIP reduction: The approach of just in time refers to the process of manufacturing the product as per market demand. Therefore, Toyota focuses on reducing manufacturing time for reducing extra organizational wages (Pereira et al. 2015). In this manner, the company faced issues with inventory management system because the stock of the company always remains low. However, this process helps to utilize the resources as per market demand (Mitra 2016). The company focuses on reducing the Work in Progress (WIP) processes for in order to reduce misuse of resources. This process further helps to reduce the cost of manufacturing, which increase organizational profitability remarkably.
Raw material reduction: Toyota has adopted an approach for reducing the raw materials in order to reduce the holding cost of the company. In order to work in this approach, the organization has adopted a proactive supply chain system, which helps the company to arrange raw materials as per market requirements (?atanov? et al. 2015). In this manner, the company can reduce the organizational cost in an effective manner. However, this approach increases the risk factor of low product availability in market.
Increased flexibility: Increasing flexibility helps the company to manufacture the product as per requirements. This strategy helps the company to be responsive to the consumers’ demands (Moradi et al. 2016). For example, if market demand increases, the company increases manufacturing and if the market demand of a particular product go down, then the company reduces manufacturing. In both cases, the company can invest the actual amount required.
Rapid response to customer: In order to satisfy needs and requirements of the consumers, Toyota has adopted a strategy to response consumers frequently. In this manner, the company can reduce the manufacturing time, which reduces negative impact of product unavailability in market (Eisenstecken et al. 2015). Toyota starts the manufacturing after getting order from the consumers at a first come first serve basis. In order to ensure that consumers are getting the products within promised time, Toyota makes sure that employees are meeting the deadline appropriately. If the employees are not meeting the expected deadline, then it will affect brand image of the company negatively.
Relation of TQM with JIT in Toyota
Total Quality management is beneficial for both the company and the consumers. In this approach, an organization can improve their organizational processes, which helps to reduce organizational cost. On the other hand, reducing organizational cost reduce product price and enhance quality as well (O’Neill, Sohal and Teng 2016). Therefore, it can b e said that this approach influences employees to perform as per the organizational requirements. Now, Just in Time approach refers to the process of using the resources as per requirements. Therefore, it can be said that TQA has a direct relation with the JIT approach. JIT approach helps an organization to reduce misuse of resources, which reduces product cost (Azar, Vashist and Vashishtha 2015). Apart from that, this process helps an organization to improve the product quality. Overall, adopting this process, an organization can reduce price and increase product quality, which increase satisfaction level of the consumers. Following are the benefits gained by Toyota after implementing JIT approach.
West reduction: In JIT approach, Toyota is able to reduce resource wastage. This approach helps the company to conduct a faster turnaround of the resources. For instance, the resources can be used immediately after getting manufacturing order (Singh and Singh 2015). In this manner, Toyota can prevent unnecessary waste of goods and therefore, it reduces the organizational cost. Moreover, implementing JIT helps Toyota to extra investment for storing extra stocks.
Reduce investment: In case of Toyota, the company needs to invest huge amount in order to store raw materials without considering the market demands. Therefore, JIT approach helps the company to reduce their holding cost, which actually reduces business investment (Rao 2015). Moreover, this process further helps Toyota to maintain healthy cash flow in an effective manner. In this process, the company order for the stocks as per the market demand.
Low requirement of space: In order to implement Total Quality Management, Toyota ensures that raw materials are not becoming damaged. Therefore, the quality of the product will be high, because the company is using fresh parts (Zhu and Azar 2015). Storing materials for long time can affect the overall product quality. Therefore, it can be said that implementing TQM with JIT tool helps an organization to maintain the product quality.
Disadvantages of JIT approach and possible measurement taken by Toyota
‘Just in Time’ approach helps to reduce unnecessary processes of over stocking practice of an organization, which has positive impact on organizational profitability. However, this approach also has different negative impact on business performance. In other word, it influences certain risk factors, which need high monitory (Madar 2015). In case of Toyota, the company has adopted JIT approach and the possible measures for reducing its negative impact. Following are the issues faced by Toyota along with the measures taken by the company for gaining competitive advantages.
Running out of Stock: In just in time approach, Toyota can face issues with low resources, which can prevents the organization from manufacturing products as per market demands. This approach influences the company to obtain raw materials on the time of product manufacturing (Nanda 2016). There is no such stock of raw materials, which the company store for future aspect. The company measures the market demand and orders the raw materials as per the assumption. This process is known as lean management process in which an organization can reduce cost and increase profitability (Zeng, Tam and Tam 2015). Now the risk factor involved in this process can be penalizing for the company. It is possible that demand of a particular product increase at middle of financial year. In this particular situation, the company needs to increase resources of raw materials in order to come up with the high market demand. However, the suppliers may fail to deliver the requested raw materials due to high demand. Moreover, price of the raw materials will be high in such situation (Gonzalez et al. 2015). Therefore, the company has to purchase the raw materials at high price and therefore, the product price will increase, which prevents an organization from gaining competitive advantages. The measure taken by Toyota for handling this kind of situation is very constructive and simple in nature. The company has established a long-term relationship with their suppliers (Grover, Chopra and Mosher 2016). In this manner, the company can obtain the raw materials at low price even at the time of high market demand.
Low control over deadline: In just in time approach, an organization needs to man manufacture the product within the promised deadline. Therefore, the workforce of the organization should be efficient and maintain deadline efficiently. In this manner, it will be possible to satisfy needs and requirements of the consumers effectively (Garc?a, del R?o and Simonetti 2016). On the other hand, if the workforce is not efficient, then it will be impossible for the company to conduct the entire process within the required deadline. It will affect consumers’ satisfaction level negatively, which will reduce product demand and organizational profitability. In order to reduce negative impact of this particular issue, Toyota has adopted efficient human resource policies and supply chain management policy (Spofford Jr, Russell and Kelly 2016). In case of human resource policy, the company provides efficient training to the employees to empower performance quality. On the other hand, the supply chain process of the company helps to accumulate all the required raw materials easily. In order to empower performance quality of the workforce, the company has implemented different motivational tools. These motivational tools help to improve performance quality of the workforce.
Recommendations for Toyota
The just in time approach has both positive and negative impact on business development of an organization. Implementing JIT approach without taking certain measures can hamper consumer satisfaction in an effective manner. In Toyota, the company should consider certain aspects in order to take advantages of the just in time approach. Following are the recommendations, which Toyota needs to follow in order to implement JIT approach efficiently.
Strong supply chain: As just in time approach prevents Toyota from storing raw materials for future requirements, the company should build string relationship with the suppliers. In this manner, the company would be able to purchase the raw materials at low cost even in high market demand. Additionally, the company would be able to obtain the raw mneterials within the required time. Therefore, Toyota will be able to deliver the product to the consumers within the expected time. Apart from that, a strong supply chain management would help Toyota to purchase high quality raw materials, which will increase overall product quality. In this manner, the company will be able to satisfy the consumers in an effective manner.
Efficient workforce: The workforce of an organization is solely responsible for maintaining product quality. Therefore, Toyota needs to provide training to the workforce regarding the newly adopted technological equipments. Therefore, it can be said that the company needs to incorporate innovative technologies, which can reduce manufacturing time. In this manner, Toyota will be able to empower performance quality of the workforce as well. the most important factor is employee motivation, which influences the performance quality of employees in an effective manner. In order to avoid negative impact of JIT approach, the company should consider employee knowledge and efficiently both at same degree.
Responsiveness towards consumers: In order to improve the consumers’ satisfaction level, Toyota should increase responsiveness towards the consumers in order to ensure that needs and requirements of the consumers are fulfilled. The company should increase communication with the consumers for understanding their needs and requirements within very short time. In this manner, the company will be able to come up with the actual product, which consumers need. For example, the company should gather information regarding how the customer would like to purchase the product such as product color and model version.
After preparing this report, it can be said that Just in Time (JIT) approach helps an organization to improve the total quality management process. The total quality management tool selected in this report is just in time, which helps an organization to reduce waste of resources and holding cost. On the other hand, this approach brings many difficulties for the company, which needs to be avoided with efficient strategies. In Toyota, the company has adopted different measures for avoiding the negative impact of just in time approach. In order to avoid the risk factors, the company has established a strong relationship with the suppliers. It helps Toyota to purchase raw materials at lost cost. Evaluation of just in time process shows that this approach both have negative and positive impact on small and large business organizations.
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