Quality_Management_System_-Toyota

Quality and Systems Management Toyota Motor Corporation Operational management and its importance Operational structure is combination of resources, system, processes and tools which together make the infrastructure of the organization and prepare the organization web. Operational management is the monitoring control and formations by combining the tools of resources, processes, system in away, that it is prone to achieve the organizational objectives. Operational management is the key performance indicator which needs to be addressed in the organization in appropriate way. So it is helpful and aiding feature towards the profitability and sustainability. Performance of operations are measured and calculated by different ways and there are certifications involved in the process for example ISO 2009 and many others which indicates the objectivity an importance of organizational structure in general terms However the main importance of proper management lies the strong basis of the organization by: • Increase organization • Efficient use of resources • Defined policies and procedures • Discipline and managed • Increase in quality • Better Organizational vision, • Increase in profitability as there are less system failures Strategic objectives of Toyota Toyota is the sign of quality and management so they have following strategy towards its success • Toyota will be highly visible in terms of its confidence of their customers • Toyota will be maximizing their shareholders value by offering a consistent return and credibility towards its organization which will be identified by their success of managed system. • Toyota will be the most sustained company in the world with their unique product range and quality Operational Objectives of TOYOTA Toyota is operating in following operational objectives like Quality: quality is the main theme on which they are competing in the world and are committed to provide their customers the durable and value products Cost: can be referred as this come with quality. Toyota is operating under the objective of producing the products which are most cheap and perfect design but it comes with the very less cost. Speed, can be referred as the delivery and production time organization production time will be enough to make a good and cost effective product and toyota will deliver their sale on time. Flexibility: Flexibility of operations according to the product and operations is the heart of organization and must be capable to incorporate change in technology, systems and resources in it. These all described operational objectives are supporting the Toyota’s Strategic objective of delivering the quality and cost value product to their customers on time. In other words a successful Operational management is key and primary performance indicator of the company. Business Process A business process is a practice of performing different actions by management, to meet the organization’s objective. As these processes earn income and spend costs, which results in profit or loss. In addition these activities are performed to improve and well quality products to its consumers. These actions are planned, and implemented in accordance with the organization’s policies and its written constitution. Business process is an activity which is been supported by following three important components: Resources are the combination of human resource, technical resources and financial, As Toyota is a production base company so here the material and technology matters a lot Toyota’s objective of quality is referred as the achievement by their skilled and innovative labored, Their Unique technology and their efficient used of financial resources. Systems: Toyota has designed their systems in long ago and the have put the element of continuous improvement of the system as embedded part. This system ensure them to find the perfect assist to their objectives it is assumed that company is working in a well defined crystal clear and appropriate systems Tools: Tools used are their defined policies, highly experience work force and well defined system is what is based of their operational management success Toyota’s all business processes are linked by a corporate philosophy and unique production system, called Toyota Production System (TPS). Where they use their resources, tools and system by keeping in mind seven principles given below: Product Quality A person who is actually involved in production process, can understand product deficiencies , so if an organization want to improve its product quality then it needs to delegate the responsibility to worker to find out the product’s flaw, and if there are any, to get them correct from relevant person. In case, if problem is not solved, then employee can either stop production with a card that is called JIDOKA. Upholding Equipment In Toyota workers are given training to fix the basic problem of tools safeguarding. However, if some difficult issues arise, then people are assigned having special skills to improve the efficiency of tools and give guidelines to workers to avoid such situation in future.   Just in time production Toyota used drag production techniques to cut down its stock keeping costs and lead times. These techniques result in Just in Time concept, which says that material in production is used as per product demand, this is useful, as it saves stock holding costs and lead times. Association of suppliers Suppliers take active part in the production process of Toyota, As they are given training and taught different ways to save setup costs and improve the quality of material supplied, they are also liable to supply the best quality raw material, to avoid from product defects and deficiencies. Large volume of production If an organization producing units at large, then its result in high distribution costs, setup and holding cost, and maintain costs etc. The 7 Wastes to Be Eliminated Overproduction; Waiting, Transportation; Inventory; Motion; Over-processing; Defective Units Quality audit and review systems Quality audit is an independent examining of the quality and efficiency of the system, product or of organization as a whole to ensure the compliance with procedures, mostly done by external independent auditor. Quality Audits are In order to check the production system, regular checks are made to make sure if whole process is continue as per planned procedure, In addition recommendations are given to improve the quality of procedure and to improve its internal control systems. However if production is not in line with desired process, then control actions are performed to remove the deficiency As company is now suffering the heavy cost of defective products, so it would be much recommended to have the effective quality audit system in order to prevent the risk of failure at first stage. There are many described and define ways to adopt the quality management system. However the most suitable quality audit procedure ad system would be as follows: Commence the audit First of all auditor sets an audit objective and audit scope Secondly, auditor plans the audit guidelines and considers the viability of the audit. Audit objective This is about the main responsibilities of auditor and his tasks. Generally, auditor performs the independent examination of the financial statements, whether these are prepared in accordance with the financial reporting standards, and give true and fair view. Auditor’s other responsibilities include. ➢ Auditor checks that all controls are in placed in the preparation of the financial statements. ➢ A recommendation report on the accounting and internal control is system is also provided on management request; this report outlines the weakness in system and the room for improvement. Audit scope This explains the areas to work, rights and duties of auditor. This includes the office locations, business process, resources and team members on each unit. Audit criteria Audits are conducted in accordance with the international standard on auditing. Auditor examines the books of accounts, if all statements are in line with the international financial reporting frame work, and auditors meets all ethical requirement. In order to start an audit, auditor needs to plan the resources and team members. First of all auditor makes sure that he complies with the codes of ethics, Secondly determine the level of resources, skills and team members required, It is the auditor right to access the company’s account to collect desired information to form an auditor’s audit report. Engagement letter A confirmation letter is singed by company’s management which explains the auditor’s right and duties towards the company and the management responsibilities for audit. A company has following responsibilities, ✓ Provide the full access to company’s record, so that auditor would have no problem in collecting audit evidence, supporting the final opinion ✓ Auditor might ask for confidential information, which the management is liable to provide. ✓ Management should also make available the last years audit report. Planning of the audit The auditor should plan the audit so that the engagement is performed in an effective manner. An audit plan should include the following The expected audit coverage, including the number and locations of the components included. ✓ The effect of information technologies on audit ✓ The involvement of experts ✓ The accounting policies adopted by the entity and changes in those policies ✓ Knowledge of the industry, competitors, laws and regulations and technologies. ✓ The setting of Materiality levels for audit planning purposes. ✓ The nature, timing of reports or other communications with the entity that are expected under the engagement. Documentation The auditor should document the overall audit strategy and audit plan , including all significant changes made during the audit engagement. Auditor may held meetings with those charged with governance to discuss the planning elements. Finalizing an audit report Audit report is signed and issued on an agreed time and will be placed for public use, so that readers could make economic decisions by reading the final report, and shareholders would know if their investment is in safe hands. Completion of an audit When all procedures written in audit plan manual are performed, and and an audit report is distributed, then an audit is supposed to be completed. Audits follow up if audit report is signed and issued, but subsequent events arises which provide evidence of existence on the report date, but the issue is material and missing in audit report, then its management and auditors responsibility to consider the matter and take the corrective actions. Because if audit report fails to reflect the correct position of company , then its not meeting the audit objective, and would be misleading to all stake holders. Procedures that are performed to rectify the report should be verified, which is the main element of subsequent audit. Quality Culture Quality is something to get the customer loyalty and satisfaction increasing revenues. on order to obtain the quality an organization needs to include excellence in its culture, This can be done If top level management makes such strategies and training is given to work , to make their mind to achieve best quality,. Sometimes manager can implement the system which can lead towards the value added products. In addition managers understand the consequence of the implementation of such systems. Overall quality procedures contribute towards achieving the organization’s goals and its vision. In late 1960’s when the people realize that that Toyota cars are longer lasting and high quality needing the less repairmen’s through their life, made Toyota the highest selling organization through the world. So the Toyota Production system (TPS) have quality as the integrated part of the culture, which can be seen many defect free parts of their vehicles. During Quality Survey. Toyota was able to dominate the top three plant awards and capture the No. 1 position in nine out of 13 vehicle segments in which Toyota vehicles are represented Toyota’s Culture is dependent upon 14 quality related principals which are as follows. ✓ Support long term attitude while making management decisions, even if you will have to sacrifice short time fiscal objectives. Develop a continuous process to remove exertions in the system ✓ Apply just in time system to stay away from producing extra units ✓ Intensify the workload (Work like the tortoise, not the hare) ✓ Develop a tradition of solving quality issues at first place, to reduce the customer complaints. ✓ Harmonize responsibilities and practices, to have the constant success and to get involve its employees in work, ✓ Place optical cameras or computer visions to avoid from out of sight issues ✓ Exercise the authentic and consistent technology to run your organization system ✓ Train people, who could act as leaders. So that leaders could get the whole idea of work and could deliver its thoughts to others. ✓ Grow a group of excellent people, who go behind your organization’s attitude and culture. ✓ Value the expanded business and suppliers by tricky actions and assist them to grow. ✓ Recognize your responsibilities to contribute towards the overall success of company. ✓ Always think over different choices, ask for other’s comments, analysis these options slowly but implement decisions quickly. ✓ Always be innovative, and try to implement new learning to meet the overall objective of an organization. System analysis of Toyota The Toyota Production System (TPS) is one of the world’s best practicized system and given the company the competitive advantage over the period. However there are few loopholes identified by the passage of time and practice, which needs to be addressed in appropriate manners in ordered to accelerate the company to its best. Here is given below the detailed analysis of the system: IT and TPS Synergism: Toyota on this time is most importantly having an issue of synergism of IT and their system of TPS. This is their biggest challenge to incorporate the features of updated technology in their well practicized system over the years. In this context Toyota is already in process to establish the IT in their supply management chain by introducing new software in B2B, as their first attempt to shake hand with new technologies. Production Efficiency: TPS follows the rule of less time for the production and initiating planning time. In recent years the company have set the goal to reduce about half time in designing the configuration, identifying demand strategy, ready the supplies as the production start. Company is also considering to also be considering the way to sharpen the process of upfront engineering with obviously the effectiveness of using TPS. According to the manufacturing consulting firm Harbour and Associates Inc., indicates that Toyota have narrowed the plant efficiency grounds over the time steadily, as compared to the General Motors and now they have plans to ne off steps to accelerate this growth. For the fans of lean, the manufacturing mantra seems to be that less is best, explains Piszczalski. "That means less in terms of inventory, material movement, floor space, variability, and fewer steps, options, and choices in work. In contrast, the IT approach seems to imply that more is best -- more information, flexibility, functions, features, increasingly comprehensive business processes, and more people involved in the decision-making process." Along with TPS lean system is well identified and practicized in the industry. This idea came in the 1950s as a means of getting the small volumes with mass-production efficiencies. Although when concept originated the company’s sale volume was limited to only thousands of units but now company is producing the units with more than 10 million capacities making it world’s second largest motor makers. They have not only making the with Daihatsu Motor co. Ltd. Speed of Communication: Although Toyota got the best processes in place but there is problem with speed of communication which can enable organization to compete on sound basis in today’s growing market. Toyota should be looking for the system, which can increase the speed of the data obtaining and processing. On the logistics side of With TPS Toyota is extremely well of taking the individual processes and lead them to the extent of perfection. However the problem arises in the geographical extent where they have market in Japan and America and both are different in their populations and distributions. Identifying Demand: Other problem arises in company’s operation are identifying the demand trend as the demand of motor industry is highly fluctuated and can not be identified properly. Faced with rapidly changing market conditions and capacity constraints, can managements make do with a kanban approach in lean manufacturing' Ideally the opposing views will come together and each concept will compensate for weaknesses in the other. Quality Audit or Check: In recent year’s company have faced problem of vehicles recall In 2005 company have more then million recalls and faced the heavy losses and mostly recalled in America Europe and Japan. Still the company is facing the problem of recalls expecting loss of about 2 billion. Recommended Improvements and their impact After carefully analyzing it can be recommended to incorporate the following improvements in their system: Innovation and technology is something, which is crucial to integrate with the system as the market is growing with new models in the market frequently and incorporations of new business processes every day in the market. As world is now depending on computer Toyota is still based on the paper work and imply the processes in accordance to the outdated fashions by using old ways of workings. Toyota’s operations they started their businesses about 30 years ago and they still using these outdated methods as COBOLT and Batch processing is still being used. Overall quality checks: To ensure that every unit is perfect in itself for that purpose company can use the batch quality check or periodic quality audits with appropriate back ups and reviews. Plan for implementation of recommended improvements There are various models and ways that can be adopted to implement the above recommended plan. However a standard Performance Improvement Plan is as follows: Step 1: State the performance objectives need to achieved Step 2: Analyze the existing systems in place and check the expectation and level required for the new standard performances. Step 3: Identify and specify the required resources, tools and systems need to imply the improvement and prepare a systematic approach and detailed activity plan to the improvement or change plan. Step4: Execute the plan and identify there is any variation and remain updated and keep continuous testing the system during the period of implementation. Step 5: Check if desired performance objectives are achieved or not if not state the reason and check the variance from the plan. Step 6: execute the further action plan and start the cycle again . APPENDIX References and Bibliography http://www.unisa.edu.au/pas/qap/planning/glossary.asp http://www.epmbook.com/qualityaudit.htm 14 Management Principles from the World’s Greatest Manufacturer, By Jeffrey Liker, McGraw Hill, 2003, ISBN 0071392319 http://www.processmaker.com/press-releases/lakozy-toyota-automates-business-processes-processmaker-save-time-and-money http://www.1000ventures.com/business_guide/processes_lean_tps_7principles.html http://www.industryweek.com/articles/toyotas_new_challenge_793.aspx [pic] ----------------------- Quality system management