Toyota Operations Improvement Plan
Process Improvement:
Operations Improvement Plan
Jordan Barnes
MBA 6022
I. Process Identification
Background of The Issue In the 1960's Toyota linked together quality, customer satisfaction, and profit. These became pillars for Toyota's foundation and the company's baseline for growth and expansion. In 2009, the company's recalls started with what was deemed a floor mat issue. “Over the next four months, the company recalled 3.4 million more vehicles in three separate recalls over and above the initial 3.8 million, for a total of more than 7 million” (Cole, 2011). The issues were linked to different things; Sticky gas pedals, more floor mat problems, software glitches, and electrical problems. But one fact remained, the percentage of unintentional accelerations by Toyota brand cars increased yearly. By December 31st 2009, “Toyota accounted for 33 percent of all unintended acceleration complaints filed with NHTSA.” (Bailey & Kim, 2010). By 2012, Toyota lost almost 3 billion dollars in Government and lawsuit fees and suffered a sales decrease from 2009-2011. The company's image and standard of quality was tainted.
On August 8th, 2009, Chris Lastrella frantically dialed 911. “We’re in a Lexus...and we’re going north on 125 and our accelerator is stuck...we’re in trouble...there’s no brakes...we’re approaching the intersection...hold on...hold on and pray...pray.” (Frean and Lea, 2010). These were the last words heard before the family of four were sent to an early grave. This was also the beginning of what would become Toyota Motor Corporation’s biggest recall to date. Toyota was and is known for it's quality above other automobile manufacturers. The main ingredient in Toyota's Production System (TPS) is Total Productive Maintenance (TPM). The goal of TPM is to eliminate product defects and other problems before they occur. With this type of structure, how did a company known for its' excellence in quality, suffer one of the worse recall crises in recent
Operations Improvement Plan
Jordan Barnes
MBA 6022
I. Process Identification
Background of The Issue In the 1960's Toyota linked together quality, customer satisfaction, and profit. These became pillars for Toyota's foundation and the company's baseline for growth and expansion. In 2009, the company's recalls started with what was deemed a floor mat issue. “Over the next four months, the company recalled 3.4 million more vehicles in three separate recalls over and above the initial 3.8 million, for a total of more than 7 million” (Cole, 2011). The issues were linked to different things; Sticky gas pedals, more floor mat problems, software glitches, and electrical problems. But one fact remained, the percentage of unintentional accelerations by Toyota brand cars increased yearly. By December 31st 2009, “Toyota accounted for 33 percent of all unintended acceleration complaints filed with NHTSA.” (Bailey & Kim, 2010). By 2012, Toyota lost almost 3 billion dollars in Government and lawsuit fees and suffered a sales decrease from 2009-2011. The company's image and standard of quality was tainted.
On August 8th, 2009, Chris Lastrella frantically dialed 911. “We’re in a Lexus...and we’re going north on 125 and our accelerator is stuck...we’re in trouble...there’s no brakes...we’re approaching the intersection...hold on...hold on and pray...pray.” (Frean and Lea, 2010). These were the last words heard before the family of four were sent to an early grave. This was also the beginning of what would become Toyota Motor Corporation’s biggest recall to date. Toyota was and is known for it's quality above other automobile manufacturers. The main ingredient in Toyota's Production System (TPS) is Total Productive Maintenance (TPM). The goal of TPM is to eliminate product defects and other problems before they occur. With this type of structure, how did a company known for its' excellence in quality, suffer one of the worse recall crises in recent
References: 2014 Car-Brand Perception Survey. (2014). Consumer Reports. Retrieved from 2014 Car-Brand Perception Survey Bailey, D Bond, B. J. (2013). Strategies For Measuring Organizational Change. Smart Policing. Retrieved from: http://www.smartpolicinginitiative.com/sites/all/files/SPI%20Measuring%20Change%20Webinar%20FINAL.pdf Brooks, A Kalb, I. (2012). How Toyota 's Crisis Management Failures Added To The Billion-Dollar Settlement. Business Insider. Retrieved from: http://www.businessinsider.com/toyota-paying-billions-because-of-marketing-failures-2012-12 Macesich, M Rechtin, M. (2010). Toyota Execs Rethink Quality Control. Automotive News. Retrieved from: http://www.autonews.com/article/20100712/OEM01/307129949/toyota-execs-rethink-quality-control Russell, R Toyota Production System (TPS) Basics. (2010). Process Improvement Japan. Retrieved from: http://www.process-improvement-japan.com/toyota-production-system.html Toyota Struggles With Organizational Structure