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Cost Engineering


Toyota again topped the annual J. D. Power and Associates quality study released in late May of 2002. Toyota scored the highest mark ever with l 07 defects per l 00 vehicles, while Honda came in second with 113 defects. The study was based on responses of approximately 65,000 new car owners queried during their first 90-days of ownership.

These results do not surprise us, as we have been fortunate to make numerous sojourns to the Toyota plant in Georgetown, Kentucky, and observe the manufacturing processes. These trips were normally facilitated by a former Japanese student of ours, Minako Yanke, CPA, who personally knew individuals in higher management. In addition, several of our students are employed at the Honda manufacturing plant in Marysville, Ohio. Journeys to Marysville in conjunction with discussions with these students led us to believe that Toyota and Honda possess several similar management philosophies that account for their success.

It is our conclusion that success for these companies derives from company cultures that foster associate (employee) involvement with the goals of the organization, human (employee) development, and adaptation for improvement. These company cultures incorporate user-oriented (as opposed to control-oriented) accounting systems and elaborate systems for motivating, generating, and using associate ideas for process improvements. The company cultures are dependent upon employing the highest quality of associates. The purpose of this article is to examine these complementary aspects of an effective company culture.

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AACE International: The Authority for Total Cost Management