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APICS Operations Management Now
February 5, 2010, edition
APICS CEO
Abe Eshkenazi
CSCP, CPA, CAE |
Toyota Recall Prompts Many Questions
These are tough days for Toyota as the automaker recalls 2.3 million cars in the United States and as many as 1.8 million cars throughout Europe. According to the February 5 New York Times, “The problems with Toyota vehicles have battered the company’s stock, which has already dropped 22 percent over the last two weeks.”
The situation involves a number of Toyota models with accelerator pedals that might become difficult to press and slower to return when released. In the worst cases, the pedals stick and cars accelerate out of control. Toyota has announced that its engineers have developed and rigorously tested a solution that is effective and simple. A precision-cut, steel, reinforcement bar will be installed into the accelerator pedal assembly, thereby eliminating the excess friction that has caused pedals to stick in rare instances.
The media has not taken the situation lightly, largely because of Toyota’s reputation for top-notch quality. For example, error-proofing techniques such as poka-yoke—an activity designed to prevent mistakes from resulting in a product defect—are familiar and well-understood techniques of the overall Toyota production system (TPS).
We at APICS wondered what this dichotomy might mean for Toyota from an operations standpoint. To find an answer, we turned to you, the experts, and asked for your assessment of the situation via LinkedIn and an e-mail to APICS members. The hundreds of responses we received suggested Toyota may have lost its paramount focus on quality, over-relied on standardization, and inadequately tested its products. Here are some examples of what you told us:
- “Many large, successful companies become complacent. The devil is in the details, and Toyota now has to prove that it can successfully manage a recall.”
- “I am confident that Toyota will be able to bounce back and regain consumer confidence in the long run.”
- “This would be a case where standardization might not have been the wisest choice. If Toyota wouldn’t have used the same part in so many vehicles, they might have minimized the problem. All your eggs in one basket is generally not a good strategy.”
- “It would appear that Toyota stepped away from the importance of quality.”
- “The flaw should have been found when Toyota initially tested the vehicle.”
- “Toyota is taking responsibility and working to quickly resolve the issue.”
- “It is one thing to maximize your profits and experience steady, large growth. It is another thing to grow so large, so fast, that the foundation of a firm’s success is sacrificed in order to beat the competition.”
Finally, many of you reminded us that no organization can avoid quality problems 100 percent of the time. The key is to recognize where advancements can be made and focus on continuous improvement. As experts often note, the TPS and lean are powerful tools, but simply having them in your tool box is not enough—you must know how to use them.
If we had asked our members their perception of Toyota before the recall, our assumption is that most of the responses would have indicated that the TPS was a model to be followed. Unfortunately, even lean organizations may find themselves in a situation like the one Toyota faces now.
APICS offers numerous resources to help you execute lean as effectively as possible. For example, the newly relaunched “Ask APICS” department in APICS magazine gives readers the opportunity to put APICS research to work and learn from best practices. Authored by APICS Research Director Jonathan Thatcher, the January/February 2010 article “Everlasting Lean” discusses teachings from the new APICS Lean Enterprise Workshop series and 2009 Lean Practices Survey Report.
Thatcher writes, “A number of classic lean production practices remain less optimized,” noting areas for improvement available in cycle and setup times, statistical process control, and keeping shop floor employees well informed so minor problems are identified before they become major disasters.
APICS magazine invites you to submit a question on lean or any other operations management topic by emailing askapics@apics.org. As one survey respondent put it, “What is important now is for Toyota to learn from the issue, investigate where the process is weak, and improve it.”
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How Operations Management Now Relates to You
Operations management is everywhere. Today, operations management professionals have unprecedented impacts on the global economy. Consider these questions and how today's edition of APICS Operations Management Now relates to you and your career.
- Some suggest that standardization, in Toyota’s circumstances, might not have been the best choice. What alternative might have worked better and why?
- If you were a Toyota executive, would you have reacted any differently? What strategy would you have used?
- What lean production practices has your company benefitted from in recent years? What has been the most beneficial?
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