Skills and Control in the Toyota Production System: The Case of Toyota Motor Thailand (TMT)
Thunyalak Weerasombat and Ian Hampson*
Thammasat University,
Bangkok, Thailand
Australian School of Business,
University of New South Wales, Sydney, Australia
Prepared for the International Labour Process Conference, 27-29 March, 2012, Stockholm
Abstract
The debate around the skills requirements of the TPS has lacked nuance due to its use of conventional blunt dichotomous ‘high’ vs ‘low’ terminology. Those who argue the TPS requires ‘high’ skills point to the way workers handle many work processes, and engage in kaizen(or ‘continuous improvement’), using analytical and problem-solving skills. An opposite view points to the short-cycle work and fragmented tasks characteristic of the TPS, suggesting this represents mere multi-tasking – not multi-skilling. Further complicating matters, as has been noted in labour process theory, the definition of ‘skills’ has expanded to include characteristics employersfind desirable such as right ‘attitudes’. This paper reports on research that has identified how such loosely defined ‘skills of compliance’ play a specific role in TMT’s performance management system. The paper also draws – hesitantly – on developments in the debate over service sector skills to facilitate understanding of the skills in this lean complex manufacturing environment. The inchoate concept of ‘skills’ includes not only ‘technical skills’ and ‘skills of compliance’ but also less easily specified skills of ‘coordination’ and ‘work process awareness’. The empirical research the paper reports consists of interviews with key management figures and union representatives, as well as plant visits to the three Toyota assembly plants in Bangkok, Thailand.
Keywords: Toyota Production System (TPS); the Toyota Way; Toyota Motor Thailand (TMT); work process skills; coordination; competency; compliance; Competency Appraisal (CA)
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Skills and Control in the Toyota Production System (TPS): The Case of Toyota Motor Thailand (TMT)
Introduction
The existing literature regarding the skill demands of the TPS has polarised between those who think the TPS requires ‘high’ skills, and those who think it requires ‘low’ skills. The former point to the way workers handle many work processes, deploying analytical and problem solving skills, in quest ofKaizen.[1] Therefore, it is argued, it is difficult to implement the TPS in host countries whose workforces lack these skills.[2] In contrast, another view argues that the TPS requires only ‘low’ skills due to the short-cycle time and fragmented tasks, which are characteristic of that form of work, and which represent a mere multi-tasking – not multi-skilling.[3] Further, some argue that a highly skilled workforce may actually impede the implementation of the TPS.[4]
To these questions, this paper applies insights from recent labour process and other inquiries into the nature of ‘skill’ in the service sector. These have found that the concept of ‘skill’ has expanded to include what were formerly known as employee attributes – like motivation and compliance.[5] This is a fundamental shift – formerly skilled workers could use skill (qua ‘learned capabilities’) to resist management control – nowthe very definition of a skilled worker includes worker compliance. Moreover, this ‘expanded’ notion of skill resonates with the meaning of ‘skill’ in the Thai language, where the word ‘tak-sa’, or ‘skills’for industry, also includes such workers’ characteristics as discipline, punctuality, work involvement, ‘good’ attitudes and willingness to participate in hard work.[6]The paper documents how notions of skill based in ‘technical competence’ sit side by side with compliance-based notions of ‘skill’ in TMT’sperformance management system. Thepaperalso hesitantly utilises theoretical material recently applied in understanding service sector skill to further illuminate the nature of the skills demanded by the TPS. The theories ofarticulation work[7] and work process knowledge[8], have been utilised in the service sector to understand how unrecognised skills of awareness, coordination and interaction are part of many service sector work processes.[9] The paper suggests that these theories may have purchase in understanding skills in the TPS.
The paperpoints out that TMT’s strategic HRM has plugged a skills gap resulting from the underdeveloped Thai skill formation system by providing intense training upon entry and at all stages linked to long work tenure and intertwined with a ‘bundle’ of interrelated HRM practices. TMT also exerts control over workers through the definitional flexibility of ‘skill’ and the practice of performance management, called‘Competency Appraisal’, which definesthe ‘right’ characteristics of Toyota’s people as competencies required for advancement in the firm.
The findings of this paper are based on reviews of the academic literature and company documents on the issue of skills, and qualitative individual and group interviews conducted at TMT during June to December 2008. The participants include TMT executives, production managers, HRM/HRD managers, HRM/HRD staff, and frontline workers (including team members, team leaders, and group leaders). Each interview lasted, on average, about 1-3 hours while each observation took about 2 hours.
The paper proceeds as follows. The first section examines the debate over the skills needs of the TPS, charting a disagreement between advocates of ‘low’ vs ‘high’ skills. It also charts a similar disagreement over the significance of this for public policy, as some writers argue that, not only does the TPS not require ‘high’ skills but, that a ‘high skill’ public skill formation system can actually impedethe implementation of the TPS. The second section examines skills policy towards the automotive sector in Thailand, establishing its weaknesses. However, due to intense training at TMT, this national skill formation deficiency does not impede the implementation of the TPS – although we return to this point after examining the theoretical issues of labour control and skill in the next section (four) – where we also point to theoretical resources from the debate over service sector skill which may shed light on the nature of skills in the TPS and at TMT. The fifth section exposes how the performance management system uses diverse notions of skill and competence as performance criteria, in an attempt to shape employee attitudes towards the ‘Toyota Way’.
2. The Skills Demand of the TPS: ‘High’ or ‘Low’?
Scholars, activists, and policymakers have long debated whether the TPS requires ‘high’ or ‘low’ skills. The former argument was firstly popularised by Womack et al. Though not spelling out the exact skills required by the TPS, they claim that work under the TPS is challenging to workers, and requires‘high’ individual skills.[10] Some writers argue in the same vein that requirements for problem-solving and participation (i.e. in developing standardised work through kaizen)force workers to have more skills than those in a typical assembly line.[11]
According to Toyota, the TPS requires ‘multi-skilling’ because workers have to rotate jobs and undertake various responsibilities.[12]An individual worker may be required to operate and master different kinds of machines, to be responsible for the quality of his own work, as well as to cooperate with his team leader to fix unpredictable production problems.[13]Further, the flexible use of the workforce (shojinka) makes ‘multi-skilling’ even more important. Shojinka means the ability to quickly alter the number of workers to absorb changes in market demand, and to allocate workers to multiple tasks.[14]
But is this best described as ‘multi-skilling’, as claimed by Toyota, or is it more akin to ‘multi-tasking’?[15]As a result of the short cycle time, fragmented jobs, and standardised work, workers are responsible for a relatively large number of small tasks, subjected to work repetitiveness and low autonomy, as they have to strictly follow work instructions. Moreover, according to some researchers, workers have limited chances to participate in problem-solving.[16] On this view, the skills the TPS requires should be characterised as ‘low’. A further complication, and an important one, is that performing a large number of tasks at speed might entail a separate skill, or set of skills, from the skills required to perform each of the tasks in isolation. In other words, the skills of coordinating and integrating the large number of tasks might be different to those of the individual tasks – and significant. Such is argued by articulation work and work process knowledge theory, to which we will presently turn.
According to the literature summarized here, the TPS requires ‘broad-based skill’, ‘analytical skill', ‘decision-making skill’, ‘problem-solving skill’, ‘trouble shooting skill’, ‘interpersonal skill’ (teamwork), and ‘work involvement’. The literature’s lack of precision in its skill descriptors is noticed here, but bracketed for the sake of explicating the literature.‘Broad-based skill’ is seen as crucial to heijunka – or ‘levelled production’. Varying production mixes require workers with broad-based skill to deal with different machinery and equipment for each type of cars.[17] Broad-based skill is even more important to adjust worker numbers and work pace to properly respond to market demand. On this view, when each worker has to cope with a wider range of tasks, they need a broader range of skills.[18]
‘Analytical skill’, refers to the ability to identify the causes of production problems and breakdowns, resulting from the pursuit of kaizen.[19]Fixing themrelies on ‘decision-making skill’ and ‘problem-solving skill’.[20] Buffer minimisation and low inventory increases interdependence among linked stages in the production process, thus it is important that workers quickly fix problem to keep the line flowing.[21] A number of studies have already pointed out that the TPS fosters workers’ participation in problem solving.[22]Such studies often also indicate the significance of ‘trouble-shooting skill’ in that the TPS requires workers to analyse and fix mechanical and electronic problems.[23] ‘Interpersonal skill’ in general and teamwork in particular is also crucial, because work under the TPS is structured in teams in both the production line and QC activities.[24] As buffer minimisation makes team members highly interdependent, JIT needs good teamwork whereby each team member cooperates and interacts well with others.[25]Workers are also expected to replace others in cases of absence or team modification; thereby requiring each worker to work interchangeably with other team members.[26]
‘Work involvement’ is also sometimes seen as an essential ‘skill’. A numbers of studies link it to kaizen.[27] Under the TPS, workers are encouraged to make suggestions to improve production quality and work processes. It is thus said to be crucial for workers to have attitudes of commitment, willingness, and motivationto sustain work effort. Yet while kaizen activity might well depend on motivation, initiative, participation – in short, on involvement – whether these undoubtedly important factors are ‘skills’ or not is more than simply a matter of definition, and has important implications for labour control which the article will discuss at greater length below.
2. The Thai Skill Formation System and Skills Development at TMT
The skill formation system in Thailand apparently fails to provide a workforcesufficiently skilled for the needs of automobile industry recruitment. According to the ‘TPS demands high skills’ thesis, this would impede the implementation of the TPS – unless firm level training can fill the gap. This is precisely what is found at TMT – a wide range of training, and in particular ‘on the job’ learning is provided. This has certain interesting features, as it is not only an exercise in developing ‘technical skills’ for automobile assembly under ‘lean’ conditions, but it may also help develop certain necessary skills of coordination, awareness and interaction.
National Economic and Social Development (NESD) plans have guided theThai skill formation system. Early NESD plans tended to focus on labour-intensive industries, providing a large pool of low-waged labour to attract investment. In this way HRD had been mostly ignored.[28] The government’s training efforts had also mostly been oriented towards enabling the unemployed to get a job. It was only from the 8th NESD Plan (1997-2001) that the Thai government began to take HRD more seriously.[29] Yet, the government’s HRD schemes remain unable to provide sufficient skills to the automobile industry. Importantly, Thailand’s qualification structure is underdeveloped, making it difficult for trainers and recruiters alike. Thus it lacksboth direction in the skill formation system and linkages between industrial plans and HRD.[30]
Turning to quality, there is a mismatch between the supply of skills and industrial demand. Vocational education provides skills that are too general and not specific enough to serve the needs of particular industries. The vocational education for those who enter the automobile industry is oriented more toward maintenance rather than assembly work.[31] There is also a mismatch between industrial demand and curriculum – the latter tends to focus on outdated technology.[32] Accordingly, vocational graduates often need to be retrained before taking real work.[33]Accordingly, manufacturers may prefer to use internal training to save time and money, which would also enable firms to retain knowledge and expertise within the company rather than having to pay an external source for it.[34]
Importantly, the Thai educational system, unlike its Japanese counterpart, is apparently unable to shape the characteristics and attitudesdesired for industrial work, such as endurance, cooperation, participation, and teamwork. Referring to the core curriculum for fundamental education (covering primary, junior high, and high schools) recently enacted in 2008, the most related characteristics for industrial working are self-learning, adaptation to change, human relations, conflict avoidance and resolution.[35] Yet, it is still far from sufficient in preparing industrial characteristics such as discipline, hard working, and teamwork. While many of these characteristics may not be ‘skills’ properly so called, they may be essential worker attributes for life under the TPS and indeed, they figure prominently in the performance management system in use in TMT.
As Thailand does not have a qualification system for this particular industry, the finding of insufficiency of skills reported here is based on a survey of employers’ skills demand in the automobile sector.[36]According to this survey, the employers define ‘qualifications’ for automobile work in three areas: ‘work ethics’ (or necessary aspects of character for industrial work), ‘knowledge’, and ‘core operational skills for automobile tasks’. ‘Work ethics’ includesresponsibility, discipline, endurance for hard work, self-development, and compliance with firms’ requirements. ‘Knowledge’ covers language as well as science and technology, which are both important to if workers are to understand and be able to use equipment and machines. ‘Core operational skills’ for automobile tasks include the abilities to do pressing, forging, casting, plastic injection, and machining. Among these three groups of qualifications, the employers rank ‘work ethics’ as the first priority, since the automobile industry requires hard work and high adaptability. They also emphasise that the government should pay more attention to preparing these qualifications for Thai workers before entering the job market.
The same survey also reports employers’ satisfaction levelswith the‘skills and knowledge’ of workers and ‘supervisors’ who currently work in the automobile industry.[37] The survey provided a list of ‘skills and knowledge’ and asked participating employers to rate their satisfaction. In terms of skills, ‘procedure understandability’ employers register the most satisfaction (level 4), following by ‘problem-solving’, ‘manufacturing-process implementation’ (both level 3), meanwhile ‘industrial mind/habit’, ‘machine and equipment usage’, and ‘tooling’ are at level 2. In terms of knowledge, ‘safety’ and ‘measurement’ ranked as level 3; meanwhile the rest four areas got level 2.
The point about lacking skills in ‘industrial mind/habit’ is important, since this would normally be thought of as an attribute of character, rather than a skill properly so called. The Thai language itself also contributes to this problem. In the Thai language, ‘tak-sa’ is the closest meaning to the English ‘skills’. However, ‘tak-sa’ for industry also includes workers’ characteristics, such as discipline, punctuality, work involvement, and good attitudes and willingness to participate in hard-work. The fact that industrial mind/habit is listed as a ‘skill’ is an instance of how the concept of ‘skill’ can include attributes of character, and we will go on to argue that this aids employer control.
3. Theorizing Skills and Control
To take up the point flagged in the previous section, it is questionable whether ‘industrial mind/habit’, ‘work ethics’ or ‘work involvement’ should be classified as ‘skills’ (i.e. a ‘learned capability’) rather than an ‘attitude’ to work. The term ‘skill’ is problematic, as it tends to conflate ‘technical’ skills and ‘real’ abilities with other ‘attributes’ i.e. workers’ attitudes and motivation. ‘Skill’ qua real learned capabilities, is alsoa problem for management control because, on the one hand, skilled workers are usually more productive but on the other, workers’ possession of that ‘skill’ makes them potentially able to resist and subvert management’s efforts at control and work intensification.[38] Hence, early LPT highlighted management’s attempts to control labour by removing ‘deskilling’ – as in the classic formulations of Taylorism, separating conception from execution through ‘scientific management’.