What Happened to Toyota?
May 28, 2019 | Author: Abel Perry | Category: N/A
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1 What Happened to Toyota? Robert E. Cole Professor Emeritus Haas School of Business University of California, Berkeley ...
Description
WhatHappenedtoToyota?
RobertE.Cole ProfessorEmeritus HaasSchoolofBusiness UniversityofCalifornia,Berkeley VisitingResearcher,ITEC DoshishaUniversity EOQJune2011
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HowManyQualityProblemsDo TheyHave? • Operationally:3problems(asof2/08/10) • Froma“customerfirst” perspective,they had7millionproblems • Fromafuturecustomerperspective,the universeofpotentialcarpurchasers
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TheUnfoldingBigPicture • Subsequenttotherecallsassociatedwithfloor matsandstickypedalscausingunintended acceleration,Toyotahad14safetyrelated recallsthroughSept.2010. • Thesehighlypublicizedrecallsmaywellhave solidifiedintheU.S.public’smindthatToyota hasseriousqualityproblems.
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TestResultsfromConsumerReports(CR) • Ifweexaminethepercentageofabrand’s vehiclesrecommendedbyCR,thetrajectory showssignificantdeclineforToyotamodels from85%recommendedin2008,to73%in 2009,to47%in2010ͲͲthesharpdropin2010 partiallyreflectsrecentrecalls.By comparison,CRrecommended70%ofNissans in2008,77%in2009and95%in2010.
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Figure1:HowToyota’sReliabilityComparestoSelectedCompetitors (Toyotashowninbluedottedline;Competitorsshowninredsolidline)
Chevrolet
Ford
Honda
Hyundai
INITIALQUALITYSTUDY,problemsper100carsmeasuredat90days ofownership.J.D.Power&Associates
VEHICLEDEPENDABILITYSTUDY,problemsper100carsexperiencedbyoriginalownersofthreeͲyearͲoldvehicles.
Source:Author’sestimateondatashownin“InsideToyota,ExecutiveTradeBlameOverDebacle”,WallStreetJournal,(April14,2010): EOQJune2011 5 A18.DifferentscalesforthetwodifferentfiguresreflectWSJ’smodeofpresentation.
U.S.MediaAttentionRegarding ToyotaRecalls • Extraordinarymediaattention • AmediaplottogetToyota? • No,justtheU.S.mediadoingwhatitdoes– withallitsassociatedstrengthsand weaknesses • Toyotarecallsgettingfarmoreattentionthan thoseofotherautomakers EOQJune2011
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Ourmostimportantobjectiveisto deliversuperiorproductstosatisfied customerswhosetrustwemustwin.If wedeliveraproducttothecustomer whosequalitycreatestroublefor them,thiswillaffecttheirtrustinus.If webetraytheirtrust,theywillnotbuy ourproductsforalongtime! *Source:IsaoNakatsuka,DirectoroftheTQCPromotionOfficeat ToyotaIndustriesCorp.,1990. EOQJune2011
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Table1:LightTruckSalesfor FordandGeneralMotors:1999Ͳ2005* 1999
2000
2001
2002
2003
2004
2005
FORD 2,447,285 2,483,140 2,383,697 2,194,534 2,214,580 2,210,086 2,018,000
GM •
•
2,395,480
2,390,785
2,561,258
2,729,831
2,673,038
2,713,114
2,610,000
FederalregulationsdefinealightͲdutytrucktobeanymotorvehiclehavingagrossvehicleweight rating(curbweight pluspayload)ofnomorethan8,500pounds(3,855.5kg)whichis “(1)Designedprimarilyforpurposesof transportationofpropertyorisaderivationofsuchavehicle, or(2)Designedprimarilyfortransportationofpersons andhasacapacityofmorethan12persons,or(3)AvailablewithspecialfeaturesenablingoffͲstreetoroffͲhighway operationanduse.” Practicallyspeaking,lighttrucksincludelightdutyvans,pickupsandsportutilityvehicles. IamindebtedtoMichaelFlynn,formerheadoftheOfficefortheStudyofAutomotiveTransportationattheUniv.of EOQJune2011 ofotherusefulsuggestionsforthispresentation. 8 Michigan,forsuggestingthislineofanalysis.Hemadeanumber
EarlyWarnings • BasicPrincipleofRiskManagement:Identify risksearlyandeliminatethemwhiletheystill areminor • Earlyinternalwarnings • NolargeͲscalecountermeasures.
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RootCausesofToyota’sQualityProblems(1) HyperGrowth • In1995,HiroshiOkuda,ToyotaPresident,setin motionanewglobalgrowthstrategy.Itincludeda setofchallenginginterimgoalstomoveToyota’s globalmarketshareto10%.Thisgoalmorphed intoanewtargetof15%by2010. • Theyweremovingtowardthatgoal,reaching13% in2008,beforetheglobalfinancialmeltdown recallsderailedtheirefforts.
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RootCausesofToyota’sQualityProblems(2) GrowingTechnicalComplexity Vehiclesindevelopedcountriesbecomingmorecomplex • Governmentsofdevelopedcountriesimposingstricter regulationsgoverningsafety,emissions&fuelconsumption • Customerexpectationsrisingasseenindemandforgreen cars,advancedfeaturesandperformanceinluxurycars • Highendfeaturesinluxurycarsspreadingfasterintolower costvehicles • Automakersadvancingtechnologicalcapabilities.
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ImpactofHyperGrowth&GrowingTechnical ComplexityonSupplierManagement – Toyotapersonnelwereincreasinglystretchedthin – Toyotahadtodelegatemoredesignworkto outsidecontractengineersandnewoverseas suppliers – Toyotafounditincreasinglydifficulttohave experiencedpersonnelcloselysuperviseand evaluatetheirnewinexperiencedsuppliers’ detailedcomponentdesignandproduction processes. EOQJune2011
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LessonsforOtherFirms • Whenadoptingnewstrategictargets,firmsmust integratethemwithexistingcommitmentstoquality • Majorqualityfailuresleadconsumerstoreassessafirm’s brandvalue,throughexaminingitsresponsestothecrisis • Multinationalexecutivesinoverseasmarketsneedlocal andglobalinformationandastrongvoiceinrecall decisions • OEM’sneedtostronglymonitordesignandmanufacturing processesofsupplierstoinsurequality • Usererrorcanbeincreasedthroughpoordesign • ContinuetolearnfromtheToyotaproductionsystem. EOQJune2011
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LessonsforOtherFirms • • • • • •
Whenadoptingnewstrategictargets,firmsmust integratethemwithexistingcommitmentstoquality Majorqualityfailuresleadconsumerstoreassessafirm’s brandvalue,throughexaminingitsresponsestothecrisis Multinationalexecutivesinoverseasmarketsneedlocal andglobalinformationandastrongvoiceinrecalldecisions OEM’sneedtostronglymonitordesignandproduction processesofsupplierstoinsurequality Usererrorcanbeincreasedthroughpoordesign ContinuetolearnfromtheToyotaproductionsystem. EOQJune2011
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ExpandedAnalysis • PostedonlineinTheAtlantic:WhoWasReally atFaultfortheToyotaRecalls? http://www.theatlantic.com/business/archive /2011/05/whoͲwasͲreallyͲatͲfaultͲforͲtheͲ toyotaͲrecalls/238076/ • ArticletoappearshortlyinMITjournal,Sloan ManagementReview
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