Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 38

Toyota: Keeping It Lean Toyota has grown to become the largest auto manufacturer in the world, with plants located around the world. In 2005-2007 the company hired 40,000 new employees to keep up with this growth. A challenge for Toyota during times of growth is to make sure that the new hires effectively become part of the company’s culture, including the Toyota Production System which guides the flow of product through Toyota’s plants. The new hires must also learn the Toyota Way, an eight-step method for decision making. Toyota’s new managers go through extensive training at the Toyota Institute in Japan. Even veteran Toyota managers are required to go back to the Institute for training when they get a promotion. Concerned about the decline in quality in recent years, Toyota has redoubled its efforts in training and has begun to hire back some retired workers in Japan. New entry-level employees are trained at Toyota Technical Institutes located around the world.

Required Why is training so important for Toyota?

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Management and Control of Quality

Quality is explained as a term associated with customer satisfaction. It is the total level of satisfaction any customer gets from any organization’s products or service. There are two components of quality- Design Quality and Performance Quality. There are various approaches to setting quality related expectations and among those alternatives few are the Cost of Quality (COQ) Reporting, Total Quality Management and Lean System.