Toyota Satisfaction Committee

     Toyota executives lead the customer satisfaction committee at TMS and TMC.
* These committees help establish the link between marketing strategies and
operational realities of the organization. DEVELOPMENT OF CUSTOMER SATISFACTION

COMMITTEE * One of Toyota's key indicators of its performance for customer
satisfaction is "initial quality" or " the quality percieved by
the customer in the first few months of ownership. * The J.D. Power initial
survey provides feedback on quality to automobile producers, individual
diagnostics, and comparison to competition. Toyota was not ranked number one in
customer satisfaction by J.D. Power and found out they had a lot of room for
improvemnt. * In 1986, TMS/USA made a strong proposal to TMC/Japan stating that

Toyota should be number one. The proposal implied that TMC should improve
product quality in the plants to achieve that number one ranking. * In 1987, TMC
began to persue the proposal. * The initiative to improve the customer
satisfaction came to be referred to as "J1". ESTABLISHMENT OF TMC'S

CUSTOMER SATISFACTION COMMITTEE * In 1988 TMC established a committee structure
specifically to accomplish the J1 objective for customer satisfaction. There
were three subcommittees involved to address specific customer satisfaction
issues: product quality, domestic sales and service, and overseas sale and
service. INITIAL EFFORT TO IMPROVE QUALITY AT TMC JAPAN * TMC'S initial efforts
for the J1 initiative concentrated on the work of the product quality committee.
* They set out targets and initiated many improvements, and were to 60 to 70
percent on their way to achieving their targets when the incongruity between
their "high" quality improvements and "lower" customer
satisfaction rating became obvious. * TMC's product quality committee relied
heavily on TMS's voice-of-customer information and surveys of customers. * Some
of TMC's responses were "Door has scratch" or "grease on the
carpet" but their audits of the vehicles when leaving Japan had no signs of
these. The damage must be occurring after they leave Japan. THE J1 BOOMERANG *

TMS returned messages to TMC stating product quality was improving, yet damaged
vehicles are still arriving at the dealerships. * So TMC/Japan study team
followed some shipments to the dealerships and discovered that the damage was
indeed occurring after the vehicles left Japan, when the vehicles were the
responsibility on TMS. * TMC reflected the proposal back to TMS that TMS itself
should make some improvements on the J1 initiative. INITIAL EFFORTS TO IMPROVE

QUALITY AT TMS * In 1989 they established a formal program defining standards to
accessory installation processes and quality at ports of entry. * Quarterly
audits provided feedback and encouragement. * They allowed dealership managers
to improve goodwill warranty adjustments on their own. THE TMS CUSTOMER

SATISFACTION COMMITTEE * The TMS customer satisfaction committee was established
to improve teamwork and communication between all departments by coordinating
the development of company-wide satisfaction activities. * The mission of the
committee can be summarized in the following chain of events: 1. TO strengthen
the dealer network, all TMS, activities, and product quality. 2. TO become
number one in customer satisfaction, with millions of satisfied customers and
high brand image. 3. TO achieve and maintain sales and volume of 1.5 million
annually by retaining former customers and attaining new ones. THE COMMITTEE

STRUCTURE * The committee structure is composed of the subcommittee chairmen,

Japan staff advisor, and a secretary. The structure is not permanent and the
committee maybe replaced if Toyota's priorities change. * The committee promotes
communication and continues to oversee the work of the subcommittees, the
cross-functional work really gets done in the subcommittees. * The subcommittees
have became relatively powerful in this company, as far as getting work done
quickly. THE SUBCOMMITTEES * Each major operational area at TMS is represented
in a subcommittee made up of members responsible for instituting improvements in
customer satisfaction. * These subcommittees include sales and marketing, parts
and service, product quality, and Lexus. THE STRUCTURE OF SUBCOMMITTEES * The
subcommittees provide a forum for cross-department communication among top-level
representatives from diverse operational departments and for coordinated actions
to improve customer satisfaction. * Involvement of operational department is key
to success of the committee structure. * Another key factor to success of the
committee structure is that each subcommittee is chaired by Toyota Vice

President execustives. * Executive leaders of the subcommittees are responsible
for involving all affected departments in determining problems and developing
action plans related to customer satisfaction. Their involvement secures support
and commitment for programs that address customer satisfaction issues.

INFORMATION FLOW THROUGH SUBCOMMITTEES The subcommittees play a major role in
gathering, analyzing, reporting, and distributing actionable information that
can be passed on to the appropiate department. * The subcommittee hears the
customer voice from a variety of sources: 1-800- calls, surveys, or externals
studies such as those of J.D. Powers. * Customer relations department reads the
voice-of-customers and feeds the subcommittees through monthly reports,
newsletters, and other communications. * The subcommittee reviews the
information and communicates it to the appropiate department for action. * The
information is then feed back to executive managers for review. * The committee
meets monthly and each subcommittee reports to the president on a quarterly
basis. SUBCOMMITTEE AUTHORITY AND RESPONSIBILITY * Mission of each subcommittee
is narrowly defined to ensure they can function. * The responsibility among the
departments is to achieve objectives not solely affected by an individual
department. This denies each department and workers the Luxury of being able to
send to problem on down to the next station and assume that somebody else will
fix it. * They establish their own specific plans for improving customer
satisfaction, but they have no implementation power. There are no resources in
the committee to do anything other than evaluate voice-of-customer data, come up
with a conclusion, and then decide on a action of plan. REGIONAL/PRIVATE

DISTRIBUTOR CUSTOMER SATISFACTION COMMITTEE * They are dedicated to solving
problems and setting standards at local levels. * As top priority, they target
high-volume, low satisfaction dealers on a monthly basis and urge them to follow
specific customer satisfaction plan. * Having these Regional/Private distributor
committees has helped the Region focus more on customer satisfaction issues
rather than customer relation issues.