Toyota has built a foundation for total quality management through innovation, ethics and trust. They empower employees and encourage open communication to deliver what customers expect. Leading technology helps detect defects early and provide better solutions. Top management inspires values that guide subordinates to sustain a unique, difficult-to-imitate competitive advantage in innovation linked to superior technology and continuous improvement.

1. Competing Through Quality Presented by Shammi Weerasinghe (CB 002207) Yasas Kodituwakku (CB 002250) Rusira Sampath (CB 002220)

2. QUALITY DEFINITION - Total Quality Management (TQM) is a comprehensive and structured approach to organizational management that seeks to improve the quality of products and services through ongoing refinements in response to continuous feedback.

3. Introduction- Toyota Vision- “ Toyota aims to achieve long term, stable growth in harmony with the environment, the global economy, the local communities it serve and its stakeholders”. Toyota headquarters situated in Toyota City, Aichi Prefecture in Japan. Establishes in the 28th of August 1937 which was originated by Kiichiro Toyoda. The 3 rd largest car manufacturer in the world. The company possesses its own 12 plants and a number of manufacturing subsidiaries and affiliates in Japan. As well as 52 manufacturing companies in 27 countries and regions.

4. Honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world. The need for socially responsible behavior – Global trend Contribution towards fair corporate activities – Rules governing each country Emphasis on “Green Operation” – Green Life cycles, Reduce-Reuse-Recycle Deming’s 2nd principal - the need for management and leadership change in compliance to the trends in the new economic age (need for ethical behavior). Social Contribution towards Corporate Citizenship - Reforestation, Traffic safety, Arts & Culture Feigenbaums’ 7th principal - quality is an ethic Principal 01 TOYOTA GUIDING PRINCIPALS Management principle no 01 Management principle no 02 Management principle no 08

5. Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in the communities. Corporate citizenship behavior – not a special initiative; part of their management Deming’s 2nd principal - need for change of management thinking and leadership towards building a corporate image with a strong backing from ethical behavior. Initiatives to Support a Balance between Work and Home – Job satisfaction Commitment towards helping the local community – Uplift the social & economic standing Initiatives towards Environmental Beautification – Recycle oriented economy Commitment for corporate citizenship – Doesn’t tolerate any illegal act - Deming’s 1st principal - improving the product and service quality to be competitive - Feigenbaums’ 7th principal - importance of practicing ethics to enhance perceived quality - Further most of their HR practices reflect the philosophy of Japanies author Ishikawa - “root course analysis / fishbone theory Principal 02 TOYOTA GUIDING PRINCIPALS Management principle no 01, 05, 06, 07, 08.

6. Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities Commitment for safety – Passive safety & Active safety, Production process safety Feigenbaums’ 8th principal - Quality is what customers want. Commitment to enhance quality of life - Comfort & safety, Latest technology, Superior Design Internal perspective - this reveals the emphasis on Deming’s 13th principal - importance of education & self improvement which in turn enhance employee quality of life. External perspective - it once again reflects Feigenbaums’ 8th principal of meeting customer requirements. Principal 03 TOYOTA GUIDING PRINCIPALS Management principle no 05 Management principle no 08 Management principle no 13 Management principle no 01

7. Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide. Computer Aided Design – Defect free design Western thinking context - Deming’s 5th principal - constant improvement, improved quality & decrease in cost and 7th principals - need to eliminate mass inspection of quality. Japanese thinking context - Ishikawa and Shingo – continues improvement and defects preventive system respectively . Toyota IT vision towards sustainable mobility – Zeronize & Maximize, Energy Diversification Feigenbaums’ 2nd, 6th and 7th principals Meeting customer requirements Relationship between quality and innovation Importance of ethical behavior in improving quality Principal 04 TOYOTA GUIDING PRINCIPALS Management principle no 12, 7, 9,10 & 14

8. Foster a corporate culture that enhances individual creativity and teamwork value, while honoring mutual trust and respect between labor and management. Well-established corporate culture – help people to improve 4th principal of Feigenbaums - individual and team enthusiasm towards achieving a common goal which ultimately results in superior quality performance. No communication barriers – Work hand in hand, Freedom to voice out (creativity) 8th principal of Deming - driving out fear in order to encourage innovative thinking which then leads to an improvement in total quality. Employee Training – Both technical & inter personnel 1st and 6th principals of Deming - continues improvement of product and service quality and significance of instituting effective training mechanisms in order to improve quality. Principal 05 TOYOTA GUIDING PRINCIPALS Management principle no 05,08 &13.

9. Empowered Employees – Decentralized decision making Demings’ 11th principal - importance of making employees proud of their workmanship. Team Environment – Cross functional teams & Internal customers Demings’ 9th principal - eliminating barriers among departments in order to enhance cross cultural team performance. Demings’ 14th principal - every employee working in Unisom and respect to each other to drive the organization towards success. Jurans 1st principal - project management which is practiced under the team environment in production lines at Toyota. Principal 05 TOYOTA GUIDING PRINCIPALS Management principle no 12,7,9,10,14

10. Pursue growth in harmony with the global community through innovative management Toyota Production System Ishikawas’ Fishbone theory - giving solutions to the initial root course in order to enhance the quality standard. Jidoka - Prevents the production of defective product Demings’ 1st principal - continues improvement in products and service to maintain the competitive position in the market. Shingo - importance of eliminating defected products during the manufacturing process itself in order to ensure that products with defect are not made eligible to pass on to the next step of the production process. Principal 06 TOYOTA GUIDING PRINCIPALS

11. Just In Time (Making only "what is needed, when it is needed, and in the amount needed) – Supply chain integration, Waste reduction Feigenbaum 1st principal - quality control should be not looked at the final point but it’s a company wide process in which the quality should be maintained though out the value chain. Kanban System (Supermarket method) – Consistency in retrieving parts Crosby’s 4th and 5th quality principals - cost of quality evaluation and quality awareness. Principal 06 TOYOTA GUIDING PRINCIPALS Management principle no 05, 13

12. Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships. Feigenbaum’s 7th principal - entire integration of Toyotas’ value chain is a standard quality controlling mechanism Supports business objectives of all parties - Grow as the total community Juran’s 3rd principal - reaching set goals which not only ensure the consistence in quality but also achieving excellence in business performance. Delivers long term sustainable benefits Deming in his 7th principal - moving towards a single supplier - impossible at Toyota But long term relationships - Toyotas relationships with their business partners. Principal 07 TOYOTA GUIDING PRINCIPALS Management principle no 11

13. Toyota - Competitive advantage

14. Competitive advantages 1st in the Market Human resource Development Unique Production Techniques Superior Quality Extended Organizations

15. Maersk Line Maersk Line is a division of the prestigious A.P. Moller It is the largest shipping line having more than 1.9 million containers Market leaders

16. Competitive advantages Cost Operations Cost Supplier bargaining power Having the largest vessels in the industry E-Commerce Bill of lading No manual processing Market share Customer transactions

17. Competitive advantages Service Tracking system Swift movement through channels Logistic services Global Service Cargo occupation in ships Shipping roots

18. Philip Morris Phillip Morris & Co is a part of Altria Group, Inc. Situated in New York The market leader as of current having 18.1% of the world cigarette market

19. Competitive advantages Rationalized Product Portfolio Effective brand associations Brand developments cost Marketing overheads Manufacturing configuration Source and sell approach Number of blends in tobacco

20. Competitive advantages Time to market Global reach

21. TQM at Toyota is built on a foundation of innovation, ethics, integrity and trust Ethical behavior - provides a set of guidelines that all employees should adhere HR practices - empowered employees, open communication infrastructure encourage employees to deliver what customers (internal or external) expect and deserve to receive TOYOTA CONCLUSION Leading edge technology – defects are detected at the very beginning and better solutions are provided immediately Top management commitment - inspiring vision and makes strategic directions to instill values that guide subordinates

22. The more the industry becomes competitive and environment becomes volatile companies find it difficult to sustain more than one competitive advantage one strong competitive advantage and integrating it through out the value chain and thereby enhancing their ability to out perform competitors Sustainable Competitive Advantage

23. Sustainable Competitive Advantage PHILIP MORRIS MAERSK LINE TOYOTA

24. In a global context automobile industry has almost reached to the climax of inter rivalry leading to a hypercompetitive market with giants like GM and Ford “ Innovation linked with the Superior Technology which influence continues improvement” It is unique and cannot be matched in the near future. Toyota will become the largest automobile manufacturer beating the US giant General Motors. TOYOTA Sustainable Competitive Advantage

25. Operating in an extremely controversial industry Philip Morris - market leadership since its inception Leverage on the consolidated product portfolio whilst BAT is leveraging on their widely spread product portfolio Strategy is reaching wear out with the global trend Gain the edge over BAT - reducing their operational cost through out the value chain due to the limited product portfolio. BAT is currently behind Philip Morris due to their inability in managing the cost structure - strategy is very much futuristic Focus on Global Presence Philip Morris Sustainable Competitive Advantage

26. Rapid speed of globalization; the necessity for countries to connect across geographical destinations is crucial - international logistics management Offer a fully integrated solution to a selected set of customers keeping a higher margin. NYK on the other hand caters to the mass market gaining an edge over cost through gaining economies of scale. In a position to further strengthen their market position by leveraging on the existing competitive advantage to adopt a market development strategy and cater to the mass market Maersk Line Sustainable Competitive Advantage

27. Thank You……………