RECENT SUPPLY CHAIN ISSUES IN TOYOTA
In 2008, it was the largest automobile manufacturer in the world, a title previously held for over 70 years by General Motors Co. There have been endless work stoppage issues which had started to affect the long-term viability of the internal structural management of the company's supply chain such as: Profit-Crushing Domino Effect:
The global supply chain for auto manufacturing relied on critical parts built in factories in Japan. Toyota had implemented Just-in-Time (JIT), and when the earth quake and Tsunami occurred in Japan during 2008, it had incurred massive loss because most of its suppliers of sub-assembly parts had been washed ashore. It not only embraced the strategy of only having the necessary parts available at the assembly line itself, it back sourced its warehouse reserve parts in the same way. It was left needing everything that would arrive at the right time. It had to build new factories from scratch while changing the designs of some of its cars mid-year. Thus, throwing light upon the weakness of basic risk management in JIT because the lack of spare capacity across the supply chain has long term ramifications on rebuilding of the auto industry. Is Lean to be blamed for Toyota’s Recall issues???
In 2010, Toyota had been facing enormous challenges over its problems with rapid vehicle acceleration and the related billion dollar recall and public relations disaster stemming from the deaths of perhaps 40 people. This in turn had made some people to point the finger at Lean – the popular name for the legendary Toyota Production System – as an important factor in the quality problems. This was not the first time issues related to quality had come up, in 2004 also there had been problems related to quality in Toyota, but were less publicized as they had not caused any deaths associated to acceleration problems. It was found that Toyota had been growing at a fast pace and...
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