Toyota not applying the ‘Toyota Way’

Posted: February 20, 2014 in Uncategorized
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In attempt of expansion and growth, Toyota failed to live up to its culture, the “Toyota Way”. “Toyota Way” was the DNA of the company back then and it proven effective. It made Toyota one of the most successful car manufacturers in the world. But upon reaching its peak, they forgot their identity. Let us remember the Toyota Recall Crisis that occurred last 2008 and 2009 in the United States, Latin America, Europe, and China. Huge number of Toyota vehicles (Camry, Lexus, and Solara) was requested to be returned back to fix the alleged defects (either floor mats or the gas pedal) of the units. The factors that led to this are time, outsourced suppliers, and quality management.

 

First, Toyota was focused and persistent for global growth in a short period of time. As Washington Post’s Blaine Harden (2010) noted “Toyota sacrificed quality for global growth and got burned”. Though they produced more units than they ever did, the quality was sacrificed resulting to callbacks. This cost them billions of dollars and the image of the company was heavily affected.

 

Second, Toyota relied on ‘lean production’ (outsourcing the local suppliers). Since they opened new factories overseas, for faster chain of supplies and lesser cost of producing (import, freight, etc.), they depended on local suppliers. As cited by The Economist’s James Womack “meant working with a lot of unfamiliar suppliers who didn’t have a deep understanding of the Toyota culture”. As a result, it jeopardized the quality of the cars they were producing since the parts they were getting from their local suppliers were not as the same as with the suppliers they were getting from their original suppliers.

 

Lastly, Toyota failed to implement its best asset in addressing its constraints, the total quality management (customer focus, continuous improvement, teamwork) during its global expansion. As noted by Harden (2010):

There is an expert consensus that growth itself derailed the Toyota Way, blurring its focus on quality, thinning its stable of expert mentors and undermining its capacity to respond to consumer complaints.

This is a clear statement that Toyota prioritized in producing cars; however, failed to maintain the quality they were once known for.

 

To sum it up, quality was the main factor why Toyota could not prevent in making recalls. They failed to meet the standards they set due to its desire for global expansion (1) in just a short period of time; (2) practice of lean production by outsourcing unknown local suppliers; and (3) failure to observe total quality management, all, for the cost of faster production. Clearly, Toyota did not employ the ‘Toyota Way’ in the process of expanding. Now, it is up to them to regain the stature they had once.  

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