Process_Problem

Process Improvement By: Jeremy Krull Problem Statement: In 2008, Toyota achieved its long-held goal of becoming the no. 1 carmaker in the world, passing General Motors, which had been the leader since 1931. Shortly after Toyota gained that distinction, global auto sales plunged, leading to a loss for the fiscal year of $4.8 billion, the largest in the company’s 72-year history. As Toyota returned to the positive in late 2009, its reputation for safety and quality were battered by a series of recalls. The issue of unintended acceleration would lead the company through a bruising gantlet of government investigations, lawsuits from crash victims and one of the heaviest fines ever imposed on a car manufacturer in the United States. Quality was the main point of interest throughout the Toyota crisis and seems to still be at fault even today. Quality is (1) the characteristics of a product or service that bear on its ability to satisfy stated or implied needs and (2) a product or service free of deficiencies (2011, Pg. 55). Obviously the case for Toyota was that they floated away from the quality aspect of production to the quantity of production. Toyota was focused hard on being the biggest auto manufacturer in the world and they were looking to cut as many corners as they could. But unfortunately, most corners that were cut caused problems and Toyota ended up in a huge deficit with recalls, claims, and millions in payouts. Toyota needs to bring its focus back to the customer focus basis that it once had that made them so successful. By going back to their basics, they can put confidence back into the consumer and start rebuilding their empire and eventually make their way to the top consumer pick. Background of the issue: Recall timeline * Sep 26, 2007 – US: 55,000 Camry and ES 350 cars in "all-weather" floor mat recall. * Nov 02, 2009 – US: 3.8 million Toyota and Lexus vehicles again recalled due to floor mat problem, this time for all driver's side mats. * Nov 26, 2009 – US: floor mat recall amended to include brake override and increased to 4.2 million vehicles. * Jan 21, 2010 – US: 2.3 million Toyota vehicles recalled due to faulty accelerator pedals (of those, 2.1 million already involved in floor mat recall). * Jan 27, 2010 – US: 1.1 million Toyotas added to amended floor mat recall. * Jan 29, 2010 – Europe, China: 1.8 million Toyotas added to faulty accelerator pedal recall. * Feb 08, 2010 – Worldwide: 436,000 hybrid vehicles in brake recall following 200 reports of Prius brake glitches. * Feb 08, 2010 – US: 7,300 MY 2010 Camry vehicles recalled over potential brake tube problems. * Feb 12, 2010 – US: 8,000 MY 2010 4WD Tacoma pick-up trucks recalled over concerns about possible defective front drive shafts. * Apr 16, 2010 – US: 600,000 MY 1998–2010 Sienna minivans for possible corrosion of spare tire carrier cable. * Apr 19, 2010 – World: 21,000 MY 2010 Toyota Land Cruiser Prado and 13,000 Lexus GX 460 SUV's recalled to reprogram the stability control system. * Apr 28, 2010 – US: 50,000 MY 2003 Toyota Sequoia recalled to reprogram the stability control system. * May 21, 2010 – Japan: 4,509, US: 7,000 MY 2010 LS for steering system software update * July 5, 2010 – World: 270,000 Crown and Lexus models for valve springs with potential production issue. * July 29, 2010 – US: 412,000 Avalons and LX 470s for replacement of steering column components. * August 28, 2010 – US & Canada: approximately 1.13 million Corolla and Corolla Matrix vehicles produced between 2005 and 2008 for Engine Control Modules (ECM) that may have been improperly manufactured. * February 8, 2011 – US: NASA and NHTSA inquiry reveals that there were no electronic faults in Toyota cars that would have caused acceleration issues. However, accelerator pedal entrapments remains a problem. February 22, 2011 – US: Toyota recalls an additional 2.17 million vehicles for gas pedals that become trapped on floor hardware. (Wikipedia) Implications: If Toyota does not work towards improving their production and regain a customer focused approach, they could be looking at a total destruction of Toyota to a point where they could go out of business. With the recalls still appearing within Toyota, they need to work harder and faster to come up with solutions to prevent recalls from happening. I have a few friends that own Toyota vehicles and they are really considering going with another auto manufacturer because they keep hearing about all the problems that keep persisting with Toyota vehicles. People may now not drive as much with fear they may get into a situation where they cannot control within the vehicle. But Toyota needs to work more efficiently and effective to come up with quick solutions to prevent these situations from happening, or else the struggles will continue and get deeper. If Toyota were to improve their production and go back to the basics of having a customer focus, then they will see a huge improvement in every aspect of the company because people are diehard Toyota buyers and they want to come back to Toyota if they know that it is now safe. People want to be assured that they have a reliable vehicle where a product will operate properly within an expected time frame (2011, Pg. 56). People do not want to continuously be bringing their vehicle in for repair because it takes time out of their schedule and is very inconvenient. The only reason for an individual to bring in their vehicle periodically is for routine maintenance, not major repairs due to a faulty part or some part does not meet quality standards. Desired outcome: Toyota has the idea of being the biggest auto manufacturer in the world and they definitely have the ability to do so, but doing so without cutting corners. There are millions of people who put their trust in Toyota, but Toyota needs to work twice as hard as their competitors to retain their customers and prove that they create the most economical and safest vehicle on the market. The durability of the Toyota vehicle has proven to be top of the line compared to their competitors with the amount of older Toyota that are still on the road (2011, Pg. 56). I hear commercials and adds all the time with stats stating that over half of Toyotas that are on the road are 10 years or older. Now, for one to actually believe that is another question, but Toyota is really working hard to prove that they have the most reliable vehicle on the market. Steven St. Angelo put out a statement in response to the publication by the National Highway Traffic Safety Administration (NHTSA) of an extensive review of the electronic throttle control systems in Toyota and Lexus vehicles, conducted with the assistance of the National Aeronautics and Space Administration (NASA), “Toyota welcomes the findings of NASA and NHTSA regarding our Electronic Throttle Control System with intelligence (ETCS-i) and we appreciate the thoroughness of their review.  We believe this rigorous scientific analysis by some of America's foremost engineers should further reinforce confidence in the safety of Toyota and Lexus vehicles.  We hope this important study will help put to rest unsupported speculation about Toyota's ETCS-i, which is well-designed and well-tested to ensure that a real world, un-commanded acceleration of the vehicle cannot occur.    “We will continue to develop and equip Toyota and Lexus vehicles with industry-leading safety technologies, including many based on breakthroughs in sophisticated electronics systems.  We will also continue to cooperate fully with NHTSA and respected outside experts in order to help ensure that our customers have the utmost confidence in the safety and reliability of our vehicles.  Everyone at Toyota – all 30,000 of our team members in the United States and the many thousands of Americans at our dealers and suppliers across the country – is focused on listening to our customers and constantly improving our products and service.” Toyota is turning their problem into solutions with cooperating with NHTSA to bring forth any and all information regarding the problem to they can continue to update their production and make it as flawless as possible. This statement also is to comfort the customers so they know Toyota only means the best for them and they are doing whatever they can to create the safest vehicles on the road. Reference: Greto, M., Schotter, A., & Teagarden, M. (2010). Toyota: The accelerator crisis. Thunderbird School of Global Management. Russell, R. S., & Taylor, B. W. (2011). Operations management: Creating value along the supply chain (7th ed.). Hoboken, NJ: John Wiley & Sons.