(Mt) – Organizational Learning at Toyota Knowledge Management Case Study

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Organisational Learning at Toyota The Toyota Way is based on five principles: • • • • • Challenge (to provide employees with a realistic stretch vision) Kaizen (continuous improvement) Genchi Genbutsu (hands-on experience or ‘go see for yourself’) Respect Teamwork Learning had been embedded as a strong part of Toyota’s culture. New recruits got hands-on experience on production lines next to highly-trained managers. After their initial training they would join older work groups and engage in the weekly quality circles forums. Here workers would spend time analysing their performance – they would explore solutions for any potential problems to be implemented the following week. The consequence was an improvement in overall quality and a reduction in errors. Rather than losing the learning from their problem solving, each team contributed to the Yokoten System, a method for documenting and distributing learning from a library of problems to others within the organisation. Toyota used a web-based tool called Analytical Problem solving (APS) for distributing this learning around the world. The system looked for underlying causes of problems and tried to identify any general trends for wider analysis. An everyday tool for hands-on learning was the Toyota suggestion-screening system. Anyone could ask a question by typing the question on a terminal which would be flashed on a large screen in the plant. Anyone on the plant floor could then answer the question. A continual mantra from senior executives was “Never be satisfied” and “There’s got to be a better way!” Toyota also formalised its learning through the development of a Toyota University. The university provided over 400 courses for its employees around the world. Many of these courses were transmitted over the Internet through e-learning. A Learning Management System (LMS) was provided to train its 50,000 dealers on a variety of online courses. In 2002, Toyota launched the Global Knowledge Center to help distribute and share its sales and marketing knowledge. In 2003 Toyota established the Global Production Center (GPC) to help train its middle managers on production best practices. A certain tension existed within Toyota as it fostered contradictory viewpoints to help drive its experimentation and continual improvement. For exle, Toyota’s operations were highly efficient, but its use of human resources in meetings could appear wasteful, especially when few employees actively participated in discussions. Each employee belonged to several committees, self-study groups, and other social groups. From the outside, Toyota could appear frugal with practices such as switching off the office lights at lunchtimes and yet it spent huge sums on its manufacturing facilities and human resource development activities. Toyota’s internal communication was kept simple (a single side of paper in most cases), yet it had created a complex web of horizontal and vertical linkages across functional and geographical boundaries. Even though Toyota had a strong hierarchy, employees were encouraged to provide constructive criticism and contrary views to their bosses. Page 1 of 2 Toyota’s supplier networks had been vital in helping the organisation deliver its lean production and just-in-time (JIT) manufacturing systems. The Operations Management Consulting Division played a pivotal role in coordinating its suppliers and offering a problem-solving role. There was a high deal of openness in problem-solving between Toyota and its suppliers. In some cases, there were employee transfers between the two organisations, if it was deemed necessary. The strength and openness of the supplier network can be attested from the crisis that resulted from a fire at Aisin Saiki in 1997. Aisin Saiki was the sole supplier of P-valves and there was little reserve stock due to the JIT system. Aisin Saiki faxed the design of these valves to a number of suppliers and within three days over 200 suppliers had engaged in close collaboration and successfully manufactured the P-valve, sharing their successes and failures with one another. Toyota was up and running to normal capacity within a week. Questions: 1. Analyse the case study to extract all the different tools and techniques used by Toyota for its organisational learning. Separate them into “Human Capital”, “Relational Capital” and “Structural Capital”: Human Capital Relational Capital Structural Capital 2. Toyota has invested huge amounts of money in learning processes. What have been the key benefits / advantages for Toyota in doing this? 3. What learning challenges remain to be tackled by Toyota? What initiatives could they implement to overcome these challenges? Page 2 of 2

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