Knowledge Management Practices at Toyota Motors

Abstract

The case discusses the various Knowledge Management (KM) practices at Toyota Motors, the world’s most profitable automobile company. It also describes how Toyota enables wide knowledge sharing not just within the organization but also across its supply chain. It details the practices that make Toyota a true learning organization. It further explores the role of traditional organizational practices in the company’s KM efforts. The case concludes with a discussion on how KM has contributed to Toyota’s exemplary performance.

"Toyota does not have a separate Knowledge Management philosophy and strategy; managing and sharing knowledge are a part of everyday life at Toyota."

- Rory Chase (Chase), Managing Director, Teleos.

"I believe Toyota has raised continuous improvement and employee involvement to a unique level, creating one of the few examples of a genuine learning enterprise in human history - not a small accomplishment."

- Jeffrey K. Liker (Liker), Director, Japan Technology Management Program, University of Michigan.

In 2004 Toyota Motor Corporation (Toyota) was Japan's largest company and the world's second largest automobile company with worldwide unit sales of 6.7 million. It was recognized as one of the world's best knowledge enterprises, and was a three-time winner of the Global Most Admired Knowledge Enterprises (MAKE) survey , and a five-time winner of the MAKE Japan survey.

Still no other company was able to match Toyota's production system despite decades of effort. The world's largest automaker, General Motors (GM), entered into an alliance with Toyota to see its production systems in action and learn the intricacies, but could not match Toyota standards. According to a study , DaimlerChrysler, one of the "Big Three " auto firms, acknowledged that its KM initiatives had been actually inspired by Toyota's Yokoten system.

Toyota's Knowledge Management practices were considered unique because KM was embedded in its culture, unlike at most other enterprises where it was implemented as a separate and independent effort. The company's most visible knowledge management initiatives included the establishment of the Toyota University, the Toyota Institute, the Global Production Centre (GPC) and the Toyota Global Knowledge Centre. Toyota's management philosophy based on "The Toyota Way" was documented in 2001 in an effort to make KM more explicit. Toyota's KM approach had also been acclaimed for its focus on continuous learning with Kaizen and its employee suggestion system that received approximately one million ideas a year out of which about 90% were successfully implemented.

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        Case Code   ITSY048
   Case Length    17 Pages
              Period    1943-05
 Organization     Toyota
        Pub Date     2005
Teaching Note    Available
     Countries    Japan
      Industry    Automobiles

Issues

• Examine the KM practices adopted by a large and successful company

• Explore the areas of application of KM and the benefits it can confer

• Analyze the role of organizational culture in the success of KM efforts.

Toyota Motor Corporation,Knowledge Management,organizational learning,Toyota Production System,DaimlerChrysler,Toyota Global Knowledge Centre,Kaizen,Volkswagen,General Motors,Ford,Kanban,JIT manufacturing system,Supply Chain,e-Learning,Prius project.

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.