Toyota was once known for its top quality, safety, and world renowned processes. It was one of the top automobile manufactures in the world. Toyota was one of the first to introduce a 36 thousand mile bumper to bumper warranty. This is something of a standard now-and-day, but it was something revolutionary when introduced in 1988. Toyota was part of some of the major methods of quality management. It was on the leading edge of Japanese developed Total Quality Control (TQC) and Six Sigma (Cole, 2011). Toyota originated and perfected TPS (Toyota Production System). Toyota was the company that all others wanted to emulate; it was their culture and processes that everyone else reached for, not just auto companies (The Economist, 2005). In 2001 Toyota was run on the basis of 14 principles known as, “The Toyota Way”. In 2007 it passed GM as the largest automaker (Heller & Darling, 2012). It was during this time that the company giant was brought down by the benchmark that it had once set; its quality.
Toyota’s crisis was slowly brewing back in 2007. It recalled 55,000 floor mats because of a defect and possibility of getting the gas pedal stuck. Then in 2009 it received the first of its major blows to its brand; a Lexus was reported to be accelerating out of control before it came to a fiery crash. All four occupants were killed and Toyota subsequently recalled 4.2 million of its vehicles. If this weren’t enough, the company failed to take full responsibility for the problems. It sent out letters saying that there were no defects. The NHTSA got involved saying that Toyota failed to address the underlying issue. (Heller & Darling, 2012)
Toyota recalled another 2.3 million vehicles in 2010 because of similar problems with the gas pedal. ...
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...e vigilant in maintaining practices and values that support high-quality production systems, even as they learn to adapt to emerging challenges. (Cole, 2011)
Works Cited
Chester Dawson and Yoshio Takahashi, “ Toyota Makes New Push to Avoid Recalls,” The Wall Street Journal, February 24,2011
Anatomy of Crisis Management: Lessons from the Infamous Toyota Case
Heller V.L., Darling J.R.
(2012) European Business Review, 24 (2) , pp. 151-168.
Cole, Robert E. "What Really Happened to Toyota?" MIT Sloan Management Review 52.4 (2011): 29-35. Web. 25 Feb. 2014
“Special Report: The Car Company in Front—Toyota,” The Economist 374(8411) (January 29, 2005): 73.
Thomas, D. (2010a), "Toyota recalls 2.3 million vehicles over sticking accelerator pedal", available at: www.miamiherald.com/2010/01/21/1438802/toyota-recalls-23-million-vehicles.html (accessed 15 March 2010).
"Is the Auto Industry's Recovery a 'Success Story?'." Internet Wire 24 Nov. 2010. General OneFile. Web. 25 Nov. 2011.
Since the probe, General Motors had created a new post that is charged with responsibility for vehicle safety (Muller, 2013). General Motors terminated sixteen people for their role in not repairing the faulty ignition switch. The mindset throughout General Motors was to retain the bad news and keep it apart from senior supervisors. This was undeviatingly contributed to no effort being taken to remedy the faulty switch. Because of this, General Motors is directly accountable for the graves of 13
Toyota- focused differentiation, medium pricing, breadth of product line is low. Company is known for quality products, and nice styling.
According to Toyota, they have undertaken a manufacturing revolution that has fundamentally changed established practices; all the way back to the product development and design. They have done this by integrating four areas: design, production engineering, procurement, and component supply. They have achieved higher quality at lower costs by creating standardized, multipurpose components. Also the reduction in cost has heightened the value and fortifies the competitiveness of product. To do this, Toyota has required intensive coordination with its suppliers. Another factor of their Integrated Low Cost is that Toyota steadily feeds cost improvements back into the product to raise their value along with the fact that four Toyota’s seven corporate auditors are outside corporate auditors.
Monden, Y (2012) Toyota Production System: An integrated approach to Just-In-Time. 4th Edition. USA: Taylor and Francis.
Toyota’s uses both differentiation and low cost as generic strategies to try and gain a competitive advantage over their competitors in the automotive industry. The market scope that Toyota uses is a broad one that encompasses nearly every type of customer that is in the market to purchase an automobile. Toyota is able to target such a large market because they have something for everyone. Toyota has four wheel drive trucks and SUVs for the outdoor types or those who live in areas that face severe weather conditions, hybrid models like the Prius for the eco-friendly customers that are interested in saving the environment, along with the standard cars for general, everyday use. Additionally, Toyota provides vehicles for all price ranges.
Different nations within which Toyota operates have different political, technological, social, and cultural environments. To safeguard the company’s overall image, there must be effective communication between the head office and regional quarters. This is especially important in the area of quality control, as Toyota currently grapples with safety issues facing several of its car models.
They have proposed the option to do recalls that have been rejected on several different levels. California Air Resources Board did not accept Volkswagen’s plan to repair the vehicles. (Ramsey, 2015) California researched the plan and determined it was not cohesive enough nor did it have the necessary detailed to be put into place. Again, credibility comes into question; the employees were deceptive when encrypting the “defeat” code. The United States Environmental Protection Agency also agreed with California Air Resources Board that Volkswagen had not submitted an approvable recall plan to bring the vehicles into compliance and reduce pollution the structure of the recall plan is still being worked on by CARB and the EPA. (EPA,
Toyota Motor Corporation is one of the largest automakers in the world. At its annual conference in Tokyo on May 8, 2008, the company announced that activities through March 2008 generated a sales figure of $252.7 billion, a new record for the company. However, the company is lowering expectations for the coming year due to a stronger yen, a slowing American economy, and the rising cost of raw materials (Rowley, 2008). If Toyota is to continue increasing its revenue, it must examine its business practice and determine on a course of action to maximize its profit.
Class action lawsuits on behalf of consumers will likely follow to help owners recoup the “diminished value” of their vehicles. When a fix is announced, it is expected that the cars will lose performance and suffer a corresponding decline in fuel economy.
Toyota is a company that is renowned for building its reputation on quality as compared to any other auto manufacturer across the globe. Actually, the firm became the largest carmaker across the globe in 2008 when it successfully surpassed General Motors in production and sales. However, since the end of 2009, Toyota has experienced tremendous operations management issues with regards to the quality of its cars. These quality issues have had significant impacts on the identity of the company since it was forced to recall millions of vehicles because of likelihood of these vehicles to suddenly accelerate and endanger the lives of drivers and passengers. The huge product recall has posed considerable threats to Toyota’s operations, political, marketing, ethical, strategic and legal aspects at a time when the entire automotive industry is struggling. In essence, this operation management issue has threatened Toyota’s reputation and necessitates the need for a quick and effective solution through the application of operations management concepts and techniques.
The nonmanufacturing companies can learn and apply from Toyota’s philosophy and practices as listed below:
Toyota’s recall crisis started with a car crash which happened on a highway in southern California in August. The reports said that the car has no brakes. Due to the report from Toyota and local authorities the vehicle involved in the car crush has wrong floor mats installed which were interfering with the gas pedal. Toyota was forced to recall the car models which were infected. Toyota has recalled 4.2 million Toyota and Lexus model over seven model year due to the floor mat issue. Later the recall on sticky pedals and brake were also issued. It costs a minimum of $54 million a day in lost sales revenues to the company and its dealers. (Evans and MacKenzie, 2010)
After World War 2, Toyota was faced with the reality that change was necessary if it wanted to succeed and grow into an automobile manufacturer that could compete with the World’s giants such as Ford. If it weren’t for the Operations Management processes implemented and fine-tuned over the years then Toyota would never have got off the ground. It is evident that the constant strategic goal of operating more efficiently has been the crucial factor in Toyota’s success, coupled with the decentralized management philosophy, allowing the company to freely think and improve itself from an operational standing. Today, Toyota stands as an educational example of strategic excellence and a success story for people and companies to admire throughout the World.
In 1983, in a congressional testimony, American Motors Corporation characterized the air bag as "one of the most dangerously misunderstood devices ever offered to the consumer". Toyota cited air bag problems with children as a principal reason the company terminated development of air bags. The problems regarded the speed and force of deployment. But NHTSA's administrator, Joan Claybrook, a former activist in Ralph Nader's anti-automobile coalition dismissed the car manufacturer's evidence as "fragmentary and speculative" (Clyde 1). The automobile companies continue to fight the air bag, and the positive things it could offer to the consumer.