Toyota faced a challenge related to the poor visibility and low quality of a supplier for the Suprima model. The Japanese brand, being related to a top quality product and a Just in Time manufacturing scheme could not afford to have stock out problems nor not meeting consumers’ demand for quality.
One of the main errors leading to this situation was the fact that ChassisCo didn’t follow on the Toyota principle of giving the bad news up front. Toyota stated with every supplier that they expected a swift alert in case any risks were to arise, in order to tackle root causes and diminish the problems right away. On the same line, Toyota knew that the manufacturing process for the suspension cradles required substantial dedication in both effort and resources. Nevertheless, they miscalculated the actual capacity of the supplier to meet Toyota’s demand.
When ChassisCo first manufactured the parts for the Suprima in 1997, a great part of the risk was decreased since Toyota made several simplifications, resulting in an overall quality increase, hence totally eliminating the need for quality inspections when the parts first arrived at ChassisCo. This didn’t happen in the latest model. Toyota actively collaborated with suppliers in order to attack potential quality risks before they actually happen. However, for the 2003 launch, ChassisCo didn’t take the initiative of performing such a business practice. This time, Toyota let the supplier take full accountability for the sourcing parts, when in the past it had been made all through Toyota, incorporating this highly preventing scheme. Besides, this new model clearly was much more complex.
Furthermore, another mistake was assuming that ChassisCo had the project management skills necessary. They were unable to track parts along their supply chain, and it was Toyota who observed this and decided to make a corrective action upon it by creating a parts tracking...