the case study of Toyota

Topics: Toyota, Toyota Production System, Toyota Camry Pages: 55 (2067 words) Published: October 9, 2014
Quality Management
2nd Half | Fall 2013

Prof. Sónia Dahab

Toyota: The Acceleration Crisis

Francisco Vasconcelos | Inês Ferreira | Miguel Peñalta | Tomás Mourão

Agenda
1. Case Summary
2. Current Issues

3. Solutions from Toyota
4. Toyota Now

5. Discussion

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Case Summary
Industry Analysis – brief description


The global automotive market is highly concentrated – fierce competition



The top four manufacturers:
Toyota, GM, Chrysler and Ford – C4 = 37.6%



Japanese automakers were not subject to expensive pension
funds (legacy costs), unionized workers, and the insistence that consumers would always demand big vehicles – competitive

advantage comparing to the U.S market
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Case Summary
Toyota Background


The firm Toyota Motor Company was founded in 1937



Currently is one of the leading automobile manufacturers in the world



High reputation for its methods of continuous self-improvement



Toyota’s products are acknowledge for their quality and reliability

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Case Summary
Toyota Background
•In 1982, it formed a joint venture with General Motors seen as a learning opportunity - New United Motor Manufacturing Inc.
(NUMMI)
•In 1988, Toyota produced more than 5.2 million cars
BUT… aggressive penetration in other countries (Brazil, China or India) strained the company’s resources, led it to misread the market, to

produce faulty products and to built underutilized plants
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Case Summary
Why was Toyota facing a recall crisis?
•Toyota has been under a lot of pressure as a result of the increasing number of complaints over defective accelerator pedals being

reported
•Signs of the coming recall crisis began when NHTSA opened an investigation towards Toyota’s Camry models
•Four year later, the largest recall occurred: nearly 9 million cars •Brand reputation and confidence of the firm were jeopardized and it also disrupted the car industry as a whole
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Case Summary

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Case Summary
Why was Toyota facing a recall crisis?
•It faced difficulties on treat this problem adequately
•The headquarters, responsible for the critical decisions, did not give the enough importance to it on an early stage
•Lack of management control on the host countries lead to one of the biggest crisis of the firm

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Case Summary
Why was Toyota facing a recall crisis?
•It did betray one of their principles, Toyota Way: “build a culture of stopping to fix problems to get quality right the first time.”

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Case Summary
Why was Toyota facing a recall crisis?
•If it had happened in Japan, such case would be inspected on early stages (part of their culture), but sudden aggressive expansion hindered the expansion of this culture globally, which apparently

needs much time to be implemented

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Case Summary
Toyota Production System (TPS)
TPS aims to minimize friction from the production process and it is based on:
•Jidoka
•Just-in-time
•Kanban

•Lean Manufacturing
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Case Summary
Toyota Production System (TPS)
Jidoka
It consists on the automatic acknowledgement of an error by the machine/equipment which result on an immediate stop of the

production process.
• Managers/supervisor intervene if necessary to solve the problem

• Process re-starts with improvements incorporated
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Case Summary
Toyota Production System (TPS)
Just-in-time
“The right products in the right quantity and at right time” • A smooth, continuous and optimized workflow, with carefully planned and measured work-cycle times and on-demand movement of goods.

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