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Process Improvement

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Text Preview Running head: PROCESS IMPROVEMENT � PAGE * MERGEFORMAT �11�

Process Improvement



Strategic Operations Management

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This document will be evaluating an existing process within Toyota during the time of their accelerator crisis. A problem statement will be defined around the process of internal communication of concerns and ideas between foreign-based Toyota employees and the authoritative management of Toyota based in Japan.


Problem framing is a very important, but easily overlooked, part of decision-making. Framing a problem can have a heavy influence on the decisions that are made. It isn't enough to frame the problem; it should be framed with the solution in mind. This helps to keep the end goal of the decision-making process in mind so that the correct choices are made. In the case of Toyota, at the highest level, they had a major problem with some of their products involving unintended acceleration and their handling of customer reports of the problem led to a whole mess of other problems. So from the outside looking in, it seems that many processes internal to Toyota had room for improvement. Although there are many different business sections of Toyota with their own respective problems such as customer service, public relations, manufacturing, the problem I would like analyze and offer improvement on is internal communication process between management and foreign employees and how the breakdown in this process affected some of the business decisions made by Toyota's upper management.

"As Toyota grew into a global powerhouse in the auto industry, the organizational structure that emerged was a centralized design …"that put key decision-making in the hands of executives in Japan…" Some believed that Toyota's structure in the U.S. ultimately impaired its ability to prevent the safety problems before they reached the crisis" (Greto, Schotter & Teagarden, 2010, pg. 7-8). A quality tool or method used to help with the identification and prioritization of the potential causes of quality problems in a process is cause-and-effect analysis. In a way, this is a reverse engineering method used to identify the elements of a specific quality problem and to identify the causes so that it can be corrected. The problem wasn't the unintended acceleration of certain vehicles; the problem was the internal management decision-making that impacted the engineering of those vehicles which created the engineering problem.

For some background information, the defining and founding philosophy of Toyota, the Toyota Way, has been around for a long time but it wasn't until the late 1980s in which they began production of their vehicles in the U.S. Specifically the problem of ideas from U.S.-based employees has been largely ignored for almost 20 years when it comes to key engineering or financial-based decisions. "Despite the global sales volume gain, Toyota reported revenues of US $211 billion for 2009, a decrease of 19% for the previous year" (Greto, Schotter & Teagarden, 2010, pg. 2). Even though Toyota has been making large profits throughout the past 20 years, they experienced a decrease in 2009 and part of this was related to the ambitious initiatives and business decisions made by Toyota's upper management.

"Japan is notoriously consensus oriented, and companies have a strong tendency to mediate differences among individuals rather than accentuate them" (Porter, 1996, pg. 63). Japanese culture and Toyota's centralized decision-making structure made it difficult for U.S. based employees to offer ideas, suggestions for improvements, or to elevate critical problems to upper management in Japan. Toyota's upper management, in their minds, let the U.S. employees do what they do best, which is supposedly marketing and selling. The process used by... Show More

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