Cheryl Joy C.

Ganit

BSA-5

Toyota set its goal at 100% for on-time delivery and requires, in most cases, that the delivery be
made within one hour of when the parts are needed. Toyota only considers a delivery as complete when
the *entire* order arrives when scheduled. This is a very difficult standard for the majority of suppliers
to meet, so Toyota must be selective during its supplier selection.
In plant level performance they track total cost for plant operations, a few simple quality
measures like parts per million defects, and productivity. They of course keep track of safety by
measuring accidents and do some employee morale surveys. Ripberger, the VP of Powertrain
manufacturing for Toyota, explained that the one measure he found most useful as a manager was the
number of andon pulls made by each department, to stop the production line. Andon refers to a system
to notify management, maintenance, and other workers of a quality or process problem. The
departments regularly graph the data, noting the problems that caused each of the andon pulls, and use
Pareto analysis to identify the most common reasons. Then they go to work on countermeasures. This
metric provides great insight into the actual day-to-day problems faced in the production process.
Toyota is process oriented, process-oriented managers were more patient, believing that an investment
in the people and the process would lead to the results they desired.
Toyota is the benchmark for many high performance business processes such as Lean
Manufacturing and Continuous Improvement (Kaizen) Practices. All of these are components of the
Toyota Production System.
1.Toyota is focused on relentlessly developing the individual talent to meet the organizational needs.
This is a continuous process and in our view this is in line with Kaizens other concepts in the Toyota
Production System. This is a vital element in the organizational culture of Toyota.
2. Focus on collaborative work rather than individual glory. The managers and the peers are part of the
organization-wide teaching and learning culture. Therefore there is no room for individual performance
requirements to clash with team performance requirements. This helps to foster team work among the
employees. We believe this characteristic of Toyotas process stems from the Asian cultural roots of
Toyota.
3. There is no categorizing and branding of non performers. Toyotas culture drives all employees to
learn, develop and perform. Perpetual non performers who fail to uplift their performance levels even
after training and development opportunities will eventually leave the organization.

Toyota decided to focus on measurable goals and work in this partnership environment to
achieve the goals. Toyotas chosen goals were to create greater performance accountability; strengthen
business partner governance; create transparency and visibility of performance; optimize services to
better support business needs; further empower the business partner to leverage their expertise; and
focus company resources on creating greater value for the customer.
The company created four benchmarks by which to measure success: professionalism, quality,
communication, and accountability. For each benchmark, they developed guidelines that both the
business partner and the customer should follow in order to achieve success. Toyota rates the facilities
management companys performance on a monthly basis and does a quarterly summary. The roles and
responsibilities of company and vendor had to be clearly defined. As Toyota pulled away from the day-
to-day minutiae and allowed the vendors to have more interaction directly with customers, the
company relied instead on relationship management to keep track of the vendors performance. The
company created four benchmarks by which to measure success: professionalism, quality,
communication, and accountability. For each benchmark, they developed guidelines that both the
business partner and the customer should follow in order to achieve success.

Toyotas process of performance measures is unique, effective and efficient to achieving its
goals. Just like the andon they were able to identify operational problems. It gives the worker the
ability, and moreover the empowerment, to stop production when a defect is found, and immediately
call for assistance. Customer satisfaction and product quality are prioritized and controllable by
employees. Toyotas venture into new management theory has been positive on several fronts. The
company has saved money, added value to its business operations, and maintained or increased
customer satisfaction. Better design of products to improve service, higher level of uniform product
quality, improvement of product testing in the workplace and in research centers ,and greater sales
through side global markets are attained with its performance measures.