MBA6022 Section: 103
May 25, 2013
In a business organization, the organization is composed of systems that concentrate on overall efficiency. A systems approach is essential whenever something is being designed, redesigned, implemented, improved, or otherwise changed. It is important to take into account the impact on all parts of the system. Consider owning and operating an automobile. It has many parts and systems that can malfunction; some of these are critical. The automobile would not function or would be dangerous to operate without them. The Toyota Company seemed to have missed the importance of the impact on all parts a system as they came under scrutiny with the largest recall of vehicles in the United States in 2009-2010. These recalls were triggered by a car collision in August 2009 that took the lives of four people. This assignment will look at what barriers caused the systems to fail within the Toyota Company that subsequently changed the attitudes of their consumers and their trust towards Toyota.
Toyota Motor Corporation
The Toyota Motor Corporation was established in 1933 as a division of Toyoda Automatic Loom Works under the direction of Kiichiro Toyoda. In 1934, the company produced its first Type A engine at the encouragement of the Japanese government, and two years later the company produced its first passenger car, the Toyota AA and in 1937 was established as an independent company. In 1957 Toyota established its first sales, marketing, and distribution subsidiary in the U.S., called Toyota Motor Sales Inc. In 1982, Toyota Motor Corporation formed a joint venture with General Motors, called New United Motor Manufacturing, Inc. and began production in the U.S. in 1988 establishing new brands for this market. In 2009, Toyota employed more than 8,900 people and supervised 14 regional offices throughout the 50 states. Toyota produced 5.2 million cars in 58 production sites in 2000, and by 2009 they had the capacity to produce 10 million cars and had added 17 production sites. Toyota had added the capacity of a Chrysler-sized company. (Greto et al., 2010). In January 2010, Toyota suspended sales of eight recalled vehicle models to fix accelerator pedals with mechanical problems that could cause them to become stuck. In December 2012, Toyota announced an agreement worth more than $1,000 million to settle a lawsuit involving unintended acceleration in some of its vehicles (Slobe, 2010)
According to Greto et al.(2010) the Toyota company incorporated a philosophy known as the Toyota Way. This set of principles was to bring about approaches that called for continuous improvement, which encouraged teamwork, respect, and value for people. The Toyota Way was to encourage employees to strive for perfection. Another key process to mention is the Toyota Production System (TPS). It was designed to remove all unnecessary waste from the production and manufacturing process. More than just waste avoidance, it aimed to eliminate any excess interruption, misalignment, unnecessary work, or redundancies in the production process that add no value to customers. Specifically, TPS addressed seven kinds of waste: overproduction, operator motion, waiting, conveyance, self-processing, inventory, and correction (rework and scrap). Through TPS, Toyota had been able to significantly reduce lead-time and production costs (p 4).
Importance to Toyota
These processes both posed of great importance to the Toyota Company because when you value and respect your employees and external constituents it brings about a level of trust and cohesiveness in the work place and your company gains loyalty from the customers. When everyone is operating as a team, any challenges that exist are met with courage and this creates a level of motivation...
References: Greto, M., Schotter, A., & Teagarden, M. (2010). Toyota: The accelerator crisis.[Case No. A09 -10-0011]. Glendale, AZ: Thunderbird School of Global Management.
Kelly, A. M., (2012, March 5). Has toyota 's image recovered from the brand 's recall crisis? Retrieved from http://www.forbes.com/sites/annemariekelly/2012/03/05/has-toyotas-image-recovered-from-the-brands-recall-crisis/
Russell, R. S. & Taylor, B. W. (2011). Operations Management: Creating Value Along the Supply Chain (7th ed.). Hoboken, NJ: John Wiley & Sons, Inc.
Soble, J. (2010, February 26). Financial times. Toyota timeline: a company history. Retrieved from http://www.ft.com/cms/s/0/1f8f077c-2301-11df-a25f-00144feab49a.html#axzz2UM6ZCw2x
Stevenson, W. J. (2007). Operations management and decision making. (9th ed.). Retrieved from http://highered.mcgraw-hill.com/sites/0073041912/student_view0/ebook/chapter1/chbody1/operations_management_and_decision_making.html
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