ABSTRACT
This chapter examines the structural relationships between the functional meetings and the more formally developed organizations at Toyota, how business policy is made and administered through functional management, and some of the advantages to be gained from the functional management concept. Historically, functional management is the outgrowth of a long process of trial and error. Toyota utilizes cost management to develop and perform various activities to attain a specific profit goal, evaluate results, and take appropriate action as necessary. Cost maintenance and improvement are cost management processes at the manufacturing level. In order to effectively promote functional management, it must be clearly understood how each step to be performed by each department contributes to its function. Toyota regards quality assurance and cost management as paramount functions, or purpose functions, and calls them the two pillars of functional management. Other functions are regarded as means functions.
