toyoya Crisis
I. Statement of the Problem
In winter 2010, Toyota had become one of the great success stories of the
automobile industry faced a crisis that cost it billions of dollars and threaten its
survival. What could Toyota do to restore the quality of its product and its
reputation for reliability.
II. Facts about the Problem
Over a period of decades, the company had pioneered lean manufacturing and an
inflexible quality control system that had become the envy of the world.
Toyota’s leadership had set a goal of capturing a 15 percent share of the world auto
market in the late 1990s.
Toyota had steadily expanded its global manufacturing capacity and had also
worked to reduce costs by benchmarking to Chinese manufacturers from 2000 to
2005.
Significant problems with the number of recalls on Toyota vehicles began to
increase appeared in the mid-2000s.
The company’s quality rankings slipped, and in 2007 its vehicles were downgraded
by Consumer Reports.
By 2009, Toyota recalls affected over four million vehicles in the United States
alone.
Auto industry analysts suggested that the company’s rapid expansion had strained
Toyota’s ability to control its quality.
III. Alternative Courses of Action/Possible Solutions
Auto industry analysts suggested that the company’s rapid expansion had strained
Toyota’s ability to control its quality.
Do not work to reduce costs by benchmarking to Chinese manufacturers.
IV. Solution
Create and retain a culture of quality. Focus and give priority to good quality of
service or product to maintain high satisfaction of customers.
In order to have quality assurance for their products and services, there is a need to
mandate as a company policy for a more comprehensive inspection report with
complete documentations as evidence to support quality assurance during the
manufacturing process.
Acquire or procure manufacturing intelligence. Purchase manufacturing
intelligence tools that will be useful for developing business efficiently by the vast
amount of information related to the business company. After implementation, it is
expected to find ways to improve the challenges the company face.
Do not reduce cost in place of good and efficient quality of products and services.
The product’s quality should not suffer. Ensure that you have a high good spare
parts for manufacturing the vehicle.
High costs of operations should not be a barrier. Better to buy high quality of
materials and spare parts.
V. Recommendation
As part of expansion plan for the business, it is recommended to ensure the culture
of quality and reduce the call of vehicles by mandating effective company policies
and acquire manufacturing intelligence to help sustain the efficiency and effectives
of having the right and good quality of products and services.
