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Application Lean Six Sigma: Toyota Motor Corporation
Efficiency in a business is critical as it is not only a competitive tool, but it also leads to a reduction in the cost of production hence increasing the level of customer satisfaction. Customer satisfaction leads to increased profitability and, therefore, the sustainability of an organization. In the quest to create a system that can point out areas of inefficiency, Motorola Company came up with a system that they called six sigma. This is a management tool that looks management from a scientific point of view (Kirby, 2019). Six Sigma is a quality program that improves the customer’s experience, lowers costs, and builds better leaders. To most of the organizations, sigma six may mean a measure of quality that is intended to near perfection. The aim is to achieve operational or customer perfection. The research looks at the application of lean six sigma by the biggest motor vehicle manufacturer and seller in the world, Toyota Motor Corporation.
The motor vehicle industry is a very competitive sector that is affected by industry players as well as external factors within the market. External factors such as international trade, global economies, and relationships among different nations are some of the factors that play a massive role in the industry. Toyota Company has been in existence for more than a century and is the most significant motor vehicle producer and seller in the world. The success of the company has been attributed to process management by ensuring process efficiency and improving on their products. Besides, the company has adopted the lean six sigma approach to reduce wastage and increase the satisfaction of their customers.
By the application of the lean six sigma system, the Toyota Motor Corporation was able to offer the best quality, low priced motor vehicles within the shortest time possible by eliminating wastage. Consequently, the company has gained as it increases its market share, profitability, productivity, as well as customer satisfaction.
Six Sigma and Lean Six Sigma
Six sigma and leans six sigma are management tools whose focus is quality and performance in production in operating systems (Venanzi, Faustino, Silva & Hasegawa, 2017). Six sigma is a breakthrough strategy that significantly improves customer satisfaction and the shareholder’s value by virtue of reducing variability in all the aspects of a business. Thus it improves performance and service by reducing defects, stabilizing the production/ manufacturing process, and thus increase customer satisfaction. Besides, costs are reduced by improving production efficiency, eliminating waste, and reducing the costs brought about by poor quality (Singh, 2018).
Lean six sigma is a disciplined data-driven approach and methodology that is intending to eliminate defects in any process from manufacturing, transactional, products, and services. The main objective of the lean six sigma methodology is the implementation of a measurement-based strategy that is aimed at process improvement and variation reduction by the application of the six sigma improvement projects.to achieve those, six sigma sub methodologies are applied: DMAIC and DMADV. (Turner, 2018).
The six sigma DMAIC process (Define, measure, analyses, improve, Control) is an improvement system for existing process falling below the specifications ad looking for incremental improvement. On the other hand, the six sigma DMADV process (define, measure, analyses, design, verify) is an improvement system used to develop new processes or products at a six sigma quality level. It is usually applied if the current process requires more than just incremental improvement.
In the six sigma as it was initially developed, the client is the fundamental principle, and the objective is the achievement of better results in a continuous improvement cycle. Thus it focuses on error processes, customer satisfaction processes, and outcomes and improvement of operations. Hence the methodology DMAIC (Define, Measure, Analyze, Improve, and Control). Thus the method divides the process of improvement in phases that favor the identification and recognition of errors, their causes, and need to eliminate them. Different tools of DMAIC are used to analyze and achieve better results, and they include SIPOC, BOXPLOT, capability studies, statistical process control, measurement analyses, and brainstorming (Venanzi, Faustino, Silva & Hasegawa, 2017). The different phases of DMAIC are as explained below:
Define: the phase involves the clarification of the process or product that needs improvement. The most suitable team members to work with to achieve the improvement are defined. Besides, the customers of the process are also defined where the internal and external customers are considered, their needs and requirements. A map of the process that is to be improved is also created.
Measure: In the phase, the key factors that have the most influence on the process are identified, and a method of measuring them is also identified. The phase may include the collection of fresh data to clarify the sources of process variation.
Analyze: under this phase, we are supposed to analyze the factors that need improvements, and they are supposed to be related to the process variation.
Improve: improve involve the design and implementation of the most effective solution. The cost-benefit analysis is supposed to be carried out to identify the best solution to achieve improvement. Also, the hypothesis test should be carried out to assure the improvement.
Control: this phase involves the verification of whether the implementation of the process was successful and assess the sustainability of the process. Thus, the control tool is used to control the plan.
Toyota and lean sigma six application
After establishing their position as the leading motor vehicle manufacturer in the world, the managers defined their current situation so that they could understand the business conflicts and problems that the company is likely to go through in the future. One of them is the continuously changing technology and consumer taste, to which they employed experts who they continuously train to keep up with the changing technology.
Six sigma has been applied in the manufacture of Toyota since the 80s. The method consists of two central points: removing activities that do not add value and thus adding value in the production process as much as possible. In the production process, the focus is on eliminating anything other than the minimum amount of equipment, material, parts, space, and time which are essential to add value to the product. This process emphasizes the reduction of waste and thus reducing costs. It has the advantage of supporting the production sequence, quality, and product development dynamics and effectively without any remains. Six Sigma allows a holistic flow of the management process, thereby removing wastes and unnecessary activities. During the Second World War, Toyota realized that investing in people is more important than investing in bigger machinery. In addition, continuous training of employees throughout the life of the organization was also seen to be beneficial. Ongoing training was seen to motivate the employees as they are more open to process improvement, and everyone is able to give their full input to the company (Toyota Production System (TPS), 2019).
With the application of the above, the short production that was being run by Toyota changed from being a burden to a benefit as it was able to respond to changes in demand more quickly as well as changing from one model to another. The company was not very much dependent on the economies of scale as most of the motor vehicle production companies of the time did, as they developed a culture, organization, and operating system that had the aim of eliminating wastes, variability, and inflexibility. They thus focused their operating systems on their only objective of responding to demand. With flexibility, they were able to react appropriately to changing demand, with a workforce that was stable, skilled, and flexible to ensure mass production in the system. The above desirable elements were consolidated into a new approach to an operation that formed the basis of lean manufacturing of the Toyota production company (Singh, 2018).
Lean six sigma is a multifaceted production approach that comprises of a variety of industrial practices that are aimed at identifying processes that add value from the customer and enable the flow of the process with the pull of the customer in the organization. Lean six sigma at Toyota was conceptualized by Toyota Production systems (TPS) with the aim of creating a streamlined flow of processes so as to develop products that meet the needs of the customers and that the same time is incurring little or no waste. The comprehensive, multi-step based study was performed to identify the dimensional structures of lean six sigma and develop a reliable scale to signify them. The conceptual definition and measurement of the lean six sigma were quantified in ten factors which are as highlighted below:
According to Mustapha, Hasan & Muda (2019), techniques such as value stream maps (VSM) and the supplier-input-output-consumer (SIPOC) which are used to accomplish advancement in lean six sigma philosophy and adherence to the six sigma. They are essential as they help in tracking down flaws in the process as well as providing a reliable means of analyzing the value chain. VSM and SIPOC help in identifying wastes and invoking an action plan that would reduce or completely eliminate the wastage. By integration of VSM and SIPOC in an organization, it is able to eliminate redundant activities and processes, to reduce costs, allowing adjustment in the process and operations and thereby bringing value to the customer. By bringing value to the customer, the competitiveness of the company is assured and hence profitability.
Lean six sigma has the aim of increasing product quality to meet the needs of the customers while at the same time reducing wastage. In conclusion, six sigma can be said to consist of competitive policy moves with the aim of producing successful performance. It is a management game plan that strengthens the competitive position of a business, increases customer satisfaction, stakeholders, shareholders, and all the involved personnel. It seeks to ensure that everybody who is a party to the business is satisfied. Toyota has been able to apply the lean six sigma successfully in its production process to ensure that all the involved parties are satisfied and wastage is kept at a minimum. Consequently, they have gained a competitive advantage and their profit level have increased, making them the largest motor vehicle manufacturing and selling company in the world.
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Mustapha, M. R., Hasan, F. A., & Muda, M. S. (2019). Lean Six Sigma implementation: multiple case studies in a developing country. International Journal of Lean Six Sigma, 10(1), 523–539. doi: 10.1108/ijlss-08-2017-0096
Singh, B. J. (2018, August 22). Six sigma case study (bjs). Retrieved from https://www.slideshare.net/chann461/six-sigma-case-study-bjs
Toyota Production System (TPS). (2019). Retrieved from https://www.whatissixsigma.net/toyota-production-system/
Turner, J. (2018). Lean six sigma: the ultimate beginners guide to learn lean six sigma step by step. Place of publication not identified: James Turner.
Venanzi, D., Faustino, D. L., Silva, O., & Hasegawa, H. L. (2017, December). LEAN SIX SIGMA – MULTIPLE CASE STUDY. Retrieved from https://www.researchgate.net/publication/322201116_LEAN_SIX_SIGMA_-_MULTIPLE_CASE_STUDY