Summary by Kathryn Orta
Master of Accountancy Program
University of South Florida, Summer 2001
This article is about the integration of both the process design system and the business functions to a degree that allows the functions to reinforce one another. The authors use Toyota as an example of a Japanese company that has successfully been able to integrate these areas of their company. Toyota’s methodology is contrasted against those of companies in the United States, which have not been as successful with integration. Six of Toyota’s mechanisms/business areas are described that have contributed to the coordination and integration.
Although face to face communication is considered beneficial, it is thought that written communication is more efficient, especially at the outset of a project or problem. Efficiency is also noted because these "memos," which clearly and simply present the necessary data, allow participants at a meeting to have prior knowledge of information. Thus the attendees are prepared for discussion, unlike the U.S. counterparts who hold long meetings because of their lack of preparation and knowledge of the topic. Thus they are not able to stay focused on the key issues and pertinent information.
Unlike other companies, especially U.S. companies, Toyota has realized that attempting cross-functional coordination at the supervisory level is not necessary. Rather, Toyota feels that stronger functional knowledge can be achieved by appointing supervisors within the same functional area as the employee. Likewise, the primary role of the supervisors is that of facilitator and mentor, as opposed to boss. For example, the article states that a supervisor at Toyota will rarely make a decision for their subordinate. Instead they will provide information and questions that allow the employee to understand the problem and reach an answer themselves, thus empowering the employee.
At Toyota there are chief engineers who are perceived to have a broad knowledge base. This leader/chief engineer has full responsibility for a project. However, there are limits to the chief engineer’s power. In fact, his or her job is to contribute their expertise to the conceptual design of the system. Unlike their counterparts in US companies, also known as heavyweight project managers, the chief engineers do not have the power to veto or go against the decisions of the functional area involved.
Their view regarding standard skills is that employees are better serviced by internally developed training programs. They do not completely rely on outside sources, such as universities, to promote the necessary job skills. This idea goes hand in hand with the role of supervisors as mentors. There is also a consistency in the jobs performed. Engineers at Toyota are rotated for longer intervals and are rotated within one functional area, thus allowing them to develop a strong expertise in that function.
Similar to some U.S. companies, such as General Motors, Toyota has been able to standardize its processes. However, Toyota has been able to successfully minimize the steps and details in the routine procedures, therefore allowing flexibility and improvement while still maintaining some structure in the deadlines. Another factor in Toyota’s success for standardizing processes is that the procedures are the responsibility of the departments and users instead of separate special designated teams.
Living Design Standards
Toyota’s engineers still depend on checklists to provide an initial framework for the design and development process. Many companies that rely only on innovation do not realize the benefits of the checklist. These lists help to coordinate the various functions throughout the company because they provide some level of predictability. The various functions know what to expect of one another. Therefore there is a certain established level of reliability, quality and functionality. The authors also present a second benefit for using the checklist, which is generational learning. Ideas and experiences are captured and passed on through the checklists that allow generations to learn from the past. The checklists can also be improved upon and changed to reflect new ideas of the users.
The six mechanisms discussed above allow a company, such as Toyota, to integrate their process design systems and business functions for product development. Therefore it is not necessary for a company to choose between developing within functions or coordinating their cross functionality. Both of these aspects can be balanced within a company. However, the authors also note that all companies are not alike. Rather, they exist in different cultures and environments and therefore each company requires a unique design and cannot necessarily be integrated exactly as Toyota. Toyota was merely used as an example to show that integration can be achieved and a balance can be established, especially if the right people with strong expertise are committed and involved.
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