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Toyota Motor Manufacturing, USA, INC. Background

In the early 1980’s, Japanese automakers contemplated building cars in North America. Japan’s huge trade imbalance had caused political pressure to mount, while the economic feasibility of such investment had improved with a rapidly rising yen. At that time, however it was unclear whether cars produced outside Japan could live up to their hard-earned reputation of high quality at low cost. This issue was far from settled in 1985 when Toyota Motor Corporation (TMC) unveiled its plan to open and $800 million Greenfield plant in Kentucky. Thus, the company’s endeavor to transplant to unique production system to Bluegrass Country effectively became a live experiment for the world to watch. In July 1988, Toyota Motor Manufacturing, USA. (TMM) began volume production on a 1,300-acre site in Georgetown, near Lexington. The plant had an annual capacity of 200,000 Toyota Camry sedans, which would replace the bulk of Japanese imports of the same model. In 1992, TMM was expected to supply 240,000 of all the new Camry’s, whose sales were up by more than 20% since the model change in fall 1991. The new Camry joined the ranks of midsize family sedans, with constituted one third of the total American car market and returned an average 17% pretax profit margin on margin on a sticker price averaging $18,500. For the first time, in March 1992, TMM started producing wagon versions of the new Camry exclusively within Toyota’s worldwide plant network.

Total Quality Management (TQM)

Total quality management or TQM is an integrative philosophy of management for continuously improving the quality of products and processes. TQM functions on the premise that the quality of products and processes is the responsibility of everyone who is involved with the

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