Toyota’s Recalls: A Shock and A Lesson

For every one who follows auto industry and particularly manufacturing technologies and practices, shocking news about the massive recalls of its vehicles including the prestigious hybrid Prius by Toyota has caused remorse.

Over decades Toyota became a benchmark for quality and manufacturing system for manufacturing. Toyota Production System became the bible for automobile engineers, particularly manufacturing engineers. The world learnt many new shop floor practices: Kanban, Pokayoke, Lean Manufacturing (Just-in-time),Total Productive Maintenance, Quality Function Deployment and many more Taiichi Ohno, Shigeo Shingo and Eiji Toyoda became known world over. And then the world saw Toyota overtaking General Motors to become the Number One producer of automobiles in the world.

The recent crisis raises question. Did Toyota fail to keep its system in place with its speed of growth and worldwide expansion? Many claim to have cautioned Toyota about it well in advance.

First, Toyota went for a worldwide recall because of sticky gas pedals and unintended acceleration, and then the reports appeared about the faulty brakes on the gas-electric hybrid, the prestigious Prius. As reported, the slow-moving brakes on the car might have caused a collision last July, just months after the third-generation Prius went on sale in Japan.

Toyota Motor Corp’s president has not only apologized for safety problems, but also declared that ‘the company would bring in outside an unusual action for a company that has enjoyed a reputation for high standards’.

Is it not the anti-climax for Toyota? As pointed out by Jeffrey Liker in Business Week, ‘failure to follow all the principles of the Toyota Way led to this crisis. The automaker should follow its quality precepts to find a way out.’ Was it the unmanageable over ambitions that resulted in the flaws forcing the recall?

Interestingly, Toyota is getting Prius in India next month.

Is Toyota’s failure caused by the complexity of the today’s car, as Nirvikar Singh, a professor of economics at the University of California, Santa Cruz propounds in one of his columns? As per Singh, “the automobile has become increasingly complex, with more and more electronics being built into the system, and software becoming an essential part of what makes a car run. Hybrid vehicles have added to this trend of greater complexity”. According to Prof Singh, Toyota’s problem can be seen as one of failing to keep up with complexity. I don’t agree with his opinion. The Japanese quality of manufactured goods evolved to that reliability based on the shop floor practices where many thought that practices such as Six Sigma becomes useless.

I personally think it’s a failing to assimilate the traditional values and strategies of Toyota while expanding organization globally. Perhaps, the new CEO from the family that started Toyota replacing the professional ones from the organization’s hierarchy might also be the reason.

The recalls might be signaling the limit to which the customers are cared in today’s world. And that must be the lesson for the manufacturing community.

However, I was shocked to read that Honda is also having a similar problem. Has the downfall of the Japanese manufacturing quality started? But I wonder if the Japanese will set example by solving the problem rather that enhancing the lobbying in Washington to overcome the problem.

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