To put the company's organization-wide TQC initiatives up
for assessment by the world, in May 1965 Toyota Motor Co., Ltd. entered as a
candidate for the Deming Application Prize.
Following the introduction of TQC, the attitude that quality
could be improved by thorough inspection initially remained. However, as the
TQC philosophy and methods took root within the organization, this shifted to a
focus on "building quality into the process", and each department
began to cooperate toward a clear goal. The concrete results of these
initiatives became evident during the smooth production start-up of the
third-generation Corona (RT40).
Deming Application
Prize Medal (1965)
In June 1965, Toyota Motor Co., Ltd. submitted a report
detailing its quality control process to the Deming Prize Committee. After
passing the initial screening, the committee began a detailed field
investigation, visiting the Tokyo Branch Office, the Motomachi Plant, the
Honsha Plant, and the company headquarters (in that order) from August.
At the Deming Prize Committee meeting in October, the
committee voted to present the 1965 Deming Application Prize to Toyota Motor
Co., Ltd., and an award ceremony was held in November at the Imperial Hotel in
Tokyo. With 1965 marking the 15th anniversary of the Deming Prize, the ceremony
was an auspicious event, attended by Professor W. Edwards Deming (who traveled
from America) as well as many noted figures from business and academic circles.
Then-Managing Director Shoichiro Toyoda-who, as deputy head
of QC Promotion Headquarters had worked exclusively on TQC initiatives from the
planning and discussion stages through to implementation-made the following
remarks:
To summarize the results of our quality-control promotion
actions, the first effect was that our product quality improved. This was due
to the awareness of the importance of 'building quality into each process' that
permeated every corner of the company following the introduction of TQC. ...
The second effect was that our share of the Japanese
passenger car market increased, and that our total exports grew. Thanks to
this, in May 1966 we were finally able to achieve our goal of monthly
production of 50,000 vehicles, and monthly exports of 10,000 vehicles.
The third effect was that we achieved our cost reduction
targets. This was the result of a company-wide awareness of cost factors as
well as quality issues, and I believe that focusing TQC on the twin goals of
quality and cost was extremely effective in achieving these results.
And looking at the effects from a different perspective, the
initiative also dramatically improved our corporate makeup. One example of this
is that managers learned management methods, and another is that human
relations across the company improved. TQC provided a framework for everyone
from suppliers to Toyota Motor Sales (Co., Ltd.) to cooperate toward a common
goal, and by clarifying who was responsible for which duties and who held what
authority, people were able to hold frank discussions. As a result, processes
were standardized as quality assurance rules and cost control rules,
establishing a set management system.
Receiving the Deming Application Prize strengthened Toyota
Motor Co., Ltd.'s resolve to push ahead with further TQC initiatives, and based
on the points cited by the Deming Prize judges the company set the following
policies:
1.To promote all-around quality control, including at
affiliated companies such as suppliers and dealerships.
2.To establish simple and effective management systems
without being preoccupied by form, paying particular attention to ensuring
checks and actions, and rotating the management cycle rapidly.
3.To enhance overall planning and, from a long-term
perspective, achieve swift and precise decision making and execution through
coordination among management structures.
Under this policy, in February 1966 an eight-company QC
Liaison Committee2 was established among Toyota-related companies, creating a
framework for deliberating specific measures to involve all Toyota-related
entities in quality assurance actions. Toyota Motor Co., Ltd. continued to
persist with TQC initiatives at every opportunity, such as reshaping
company-wide audits into annual business inspections.
As explained in Part 1 Chapter 2, the labor disputes in 1950
were a significant lesson about the importance of a trusting relationship
between labor and management. From the mid-1950s onward, an unwritten law was
established that problems would be resolved through dialogues between managers and
workers.
In February of 1962, Toyota Motor Co., Ltd. signed the
“Joint Declaration of Labor and Management” with the Toyota Motor Workers’
Union. With a mutual relationship of trust between labor and management (based
on resolving problems through labor-management dialogue) established, the
declaration embodied the hope that both parties would unify to overcome the
imminent challenges of trade liberalization and intensified competition between
companies, and to make the leap towards a “Global Toyota”.
Under the Joint Declaration of Labor and Management, both
parties were able to affirm their mutual devotion to the concept of maintaining
and enhancing the company’s prosperity and labor conditions through the
improvement of productivity and the relationship of trust between labor and
management. Based on the fundamental spirit of the original joint declaration,
Toyota’s managers and workers have in years since taken such opportunities as
the 20th anniversary of the declaration signing in 1982 and the 50th anniversary
in 2012 to reaffirm their dedication to further strengthen the bonds between
labor and management and to face the challenges of the future together.
Source: Toyota Motor Corporation
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