Toyota: Oh what a feeling – The loss of customer goodwill due to declining quality standards
October 21, 2012
Toyota is Japan’s largest automaker and the top selling automaker operating in the US. The global headquarters for the company is in Toyoda, Japan the US headquarters in Torrance, CA. Toyota employs over 300,000 people worldwide amongst its 50 plants across the globe and their vehicles are sold in more than 170 countries across the world. They manufacture traditional gasoline as well as hybrid cars and they came out this year with an Electric plug in model as part of their Prius portfolio. According to IBIS World, 2012 edition, the global annual revenue for Fiscal Year 2011 was $228.4 Billion US.
The name “Toyota” has always been synonymous with quality the same way the name ”Xerox” was synonymous with copy machines. Toyota invented the “Lean” methodology of process improvement and refers to the Toyota Production system. This process was brought about by Eiji Toyoda’s trip to the Ford Motor Company in Detroit in 1950. Eiji was named Managing Director of Toyoda(which became known as Toyota in 1957) that year and traveled to the US to study manufacturing methods in the US and specifically US Auto manufacturing methods. Ford utilized a suggestion system that allowed employees to submit suggestions that might be used in the manufacturing process if found to be a cost-saving or innovative idea. Eiji liked this idea and upon returning to Japan, he implemented this same suggestion system into what came to be known as the Toyota Production system of Continuous improvement or Kaizen. The suggestion system concept is considered to be a cornerstone of the Kaizen process (Becker, 2001).
Toyota uses various quality programs in their operations. Toyota also uses Quality Circles, which are groups of Cross Functional employees who meet on a regular basis to solve work related problems. Toyota also uses Self Directed Work Teams which are teams of highly...