Section 1. Response to Recall Problems
Item 3. New Initiatives for Quality Improvement
Resolving to do more to address safety, pollution and other issues, at the beginning of 1970 Toyota Motor Co., Ltd. added "Be aware of the public nature of the automotive industry and contribute to the welfare of society" as the fourth item in its basic corporate policy.1
In light of the results of the previous year's comprehensive inspections, in February 1970 Toyota restored its Inspection and Improvement Department and established a new Inspection Division for each plant. It also set up a committee of automotive safety experts as a subcommittee to the Inspection and Improvement Conference, as it aimed to continue building systems for technological development, management, and other functions.
That April, Toyota focused its fiscal 1970 (ended June 1971) Zero Defects Campaign2 on eliminating and preventing the recurrence of defects related to automobile safety, a continuation of efforts in the latter half of fiscal 1969 (ended June 1970). It also expanded the initiative beyond plants to include all of its operations: purchasing, sales, quality assurance, engineering, and production engineering. It increased the number of issues for its QC Circles (Quality Control Circles) to address in eliminating defects, turning QC Circles into a central force in the movement to eliminate defects throughout the company.
In December 1970, Toyota commenced operation of its Dynamic Assurance System (DAS), the development of which had been decided in the previous year. DAS was designed not only to calculate the cost of addressing claims using claim data from Japan and overseas, but also use such data to evaluate quality problems from a technical standpoint and effectively implement quality assurance activities. It was at this point that Toyota's quality assurance system made sweeping strides forward.
In its corporate policy for fiscal 1970 (ended June 1971), Toyota set out to again win the Deming Prize, and the board of directors at its April 1970 meeting instituted policies to make the company's bid successful.3 The directors' aim was to pave the way to future growth by revamping quality management systems and methods. Full-fledged preparations began in May with the establishment of a TQC standing committee comprised of representatives from each function and department and chaired by Senior Managing Director Shoichiro Toyoda.
Around this time, the Union of Japanese Scientists and Engineers (JUSE) decided to create the Japan Quality Medal, a new prize that would be awarded to companies deemed excellent under Deming Prize standards. In September 1970, a panel of JUSE judges visited Toyota and for two days examined each plant and each department of Toyota Motor Co., Ltd.'s Head Office. During the examinations, Toyota explained to the judges its progress in developing quality assurance systems that involved suppliers and in implementing rigorous measures to promote automotive safety and reduce pollution.
The judges concluded that Toyota had achieved visible results in maintaining and improving quality through its promotion of company-wide initiatives. They outlined Toyota's achievements as follows.
- 1.Toyota has further improved control activities in each department by building on efforts made when it was first awarded the Deming Prize.
- 2.Partnerships with Hino Motors, Ltd. and Daihatsu Motor Co., Ltd. have further strengthened group-wide activities
- 3.The Zero Defects Campaign has stimulated QC Circle activities, yielding great results.
Toyota was thus nominated by the Deming Prize committee and selected as the first recipient of the Japan Quality Medal. The award ceremony was held on November 17, 1970, at the Keidanren Kaikan building, where President Eiji Toyoda accepted the award certificate from Japan Quality Management Committee Chairman Kogoro Uemura.