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Posts Tagged ‘Toyota’

Toyota Changes How It Develops Cars

July 11th, 2010 Comments off

Here is a very timely article about how Toyota is challenging its engineers to focus on quality at the design phase to avoid issues later on.  As mentioned in class with regard to quality and costs, often the best (or only) place to make changes that have a true impact is at the design phase.

Toyota Motor Corp. is stretching out how long its new models are tested before they go into production and reducing the number of outside engineers it uses in a bid to overcome a spate of quality problems.

Randy Stephens, a senior Toyota engineer based in Ann Arbor, Mich., said company executives recognize that there were quality issues with the last generation of vehicles, which were developed while the company was in a global-growth mode. Executives began talking about making changes nearly a year ago, he said, but the recent recall problems have spurred the company to act.

Toyota is going to increase the lead time for development but also simply the number of options (on such things as engines) to make the focus of the engineers.  Interestingly enough, the article mentions that costs will increase but obviously Toyota feels that the benefits of increased quality will outweigh this cost increase.

In addition to extending product-development lead times, Mr. Uchiyamada and his engineering team have decided to cut the number of engine and other key-feature variants and options to simplify and narrow the scope of engineering work, allowing engineers to focus more on quality.

Toyota may also further reduce the use of virtual engineering and begin using more vehicle prototypes. Doing so extends development time and increases costs.

And finally, my last observation is with Toyota bringing certain work back in-house that they have been outsourcing.  Recall that when we talked about decision making and make/buy situations that quality concerns were one of the non-financial factors that companies need to consider before decided to outsource.  It seems that Toyota feels that they can do a better job themselves rather than farming out this work.

The company is also working to bring development work that had been sourced to outside engineers back inside. Some outside engineers actually work side by side with Toyota’s engineers inside Toyota research and development centers. But using contractors has led to a breakdown in communication and potential misunderstandings, Mr. Stephens said.

Toyota Alters Car Development — After Quality Problems, It Stretches Out Testing of New Models, Cuts Number of Outside Engineers. Mike Ramsey, Norihiko Shirouzu. Wall Street Journal. (Eastern edition). New York, N.Y.: Jul 6, 2010. pg. B.1

Delay in Response Led to Rift Between Toyota and U.S. Regulators

February 17th, 2010 Comments off

More blame is being placed on the corporate culture for the slow reaction by Toyota to recent safety concerns with many models.

Toyota had known about the gas-pedal problem for more than a year. Its silence with U.S. regulators, and other newly uncovered details from the crisis enveloping Toyota, reveal a growing rift between the Japanese auto maker and NHTSA, one of its top regulators. Regulators came to doubt Toyota’s commitment to addressing safety defects, according to interviews with federal officials and industry executives, and accounts of Toyota and NHTSA interactions the past year.

The heart of Toyota’s problem: Its secretive corporate culture in Japan clashed with U.S. requirements that auto makers disclose safety threats, people familiar with the matter say. The relationship soured even though Toyota had hired two former NHTSA officials to manage its ties with the agency.

Interestingly, some of the blame in this article is also placed on culture within which regulators in the United States operate.

Toyota for years has been one of the most difficult auto makers for regulators to deal with because it is resistant to being told what to do, said Joan Claybrook, a former NHTSA administrator who later became president of consumer-advocacy group Public Citizen until stepping down last year. But she also blamed the agency’s collaborative approach for undermining its role. “They have tremendous power and authority but they don’t tend to use it.”

Secretive Culture Led Toyota Astray. Kate Linebaugh, Dionne Searcey, Norihiko Shirouzu. Wall Street Journal. (Eastern edition). New York, N.Y.: Feb 10, 2010. pg. A.1

Toyota’s Brake-Safety Crisis: Made in Japan

February 16th, 2010 Comments off

This essay places some of the blame for the botched handling of the recent Toyota quality issues with cultural and legal environments found in Japan.  Admitting to mistakes and acting swiftly and publicly to rectify them is unheard of to the point that crisis-management is not considered in planning in Japan as it is elsewhere.  Despite the global nature of our economy, it is interesting to see the impact of culture and legal environments on company practices…even a company the size of Toyota, the #1 auto-maker in the world.  Failure to plan for these kinds of situations might be enough to drop them back to #2…by the sounds of it, Toyota management might welcome that if they could reestablish their image as quality-king with consumers.

Essay: A Crisis Made In Japan. Jeff Kingston. Wall Street Journal. (Eastern edition). New York, N.Y.: Feb 6, 2010. pg. W.1

Toyota Image as Quality King Takes a Blow

January 27th, 2010 1 comment

With the announcement that Toyota was suspending production and sales of eight models in the United States and Canada (including the Camry, the most popular car in the US) the image of Toyota quality being the pinnacle of the industry is starting to crumble.  Although it appears that a single defect is responsible for this move, how Toyota responds to it in the coming days/weeks/months will impact the company’s image for years to come.  Below are a few recent links, but much of this story has yet to be written and this will be interesting to watch as things play out.  Are we looking at this decade’s Tylenol scare/recovery?  Will it go as badly as it did for Ford/Firestone?  It remains to be seen…

Toyota Halts Sales Over Safety Issue. Jay Miller. Wall Street Journal. (Eastern edition). New York, N.Y.: Jan 27, 2010. pg. B.2

In a stunning and unprecedented move, Toyota Motor Corp. on Tuesday halted sales of most of its popular models in the U.S. in response to growing concerns that possible defects may cause the vehicles to accelerate unintentionally.

The Japanese car maker, which long has been viewed as the leader in automotive quality, said it told its dealers to stop selling eight models, including the Camry and Corolla sedans, two of the biggest sellers in the U.S. market. Other models affected by the move include the RAV4 and Highlander sport-utility vehicles and the Tundra pickup truck.

The eight models represented 57% of Toyota’s 2009 U.S. sales. Toyota also said it will stop producing the affected vehicles at several North American plants for one week starting Feb. 1.

Toyota: Make or Brake.  From the Economist Online.

Toyota’s dash to become the biggest carmaker may have had unfortunate consequences. The pursuit of volume seems to have dented the company’s enviable record for reliability. In 2006, after another bout of recalls, the company promised a “customer first” strategy to restore its slipping reputation. But recalls continued and Toyota started to slide in customer-reliability polls while Ford, VW and others such as Hyundai, which added to sales in America last year, caught up.

Toyota Sales Halt Raises Quality Questions

Toyota Motor Corp.’s unprecedented decision to halt sales on its most popular models in the U.S. underlines the biggest question dogging the world’s No. 1 car maker: whether it has sacrificed quality in its quest to capture global market share.

The Japanese car maker, which long has been viewed as the leader in automotive quality, told dealers in the U.S. and Canada on Tuesday to stop selling eight models, including the popular Camry and Corolla sedans, in response to growing concerns that possible defects may cause the vehicles to accelerate unintentionally. The eight models represented 57% of Toyota’s 2009 U.S. sales.

Supplier Perplexed by Toyota Recall

When asked why Toyota would stop millions of its selling and producing some of its best-selling models if the problem identified only affected eight vehicles, Mr. Walorski said CTS officials were perplexed.

“We don’t know. You have to hit them up with that question. They’re they ones who did the recall,” he said.

He added that the story has attracted enormous media hype, which may have contributed to Toyota’s bold move Tuesday.

“Every day a new article comes out. There is a lot of hype out there,” he said. Of Toyota public relations strategy, he said “either they’re brilliant or they don’t know how to handle it.”

GM Ending Joint Venture with Toyota

June 29th, 2009 Comments off

The NUMMI joint venture between Toyota and General Motors will end as a result of the GM bankruptcy.  We discussed NUMMI back in chapter 2 because it was the subject of a (rather dated) textbook problem.

GM to cut ties with Toyota venture. By Shawn Langlois, MarketWatch

NUMMI – Joint Venture of General Motors & Toyota

June 1st, 2009 Comments off

A couple weeks ago in Ch 2 when discussing direct/indirect and fixed/variable costs we had a problem that referenced a company called NUMMI (New United Motor Manufacturing, Inc.) that made Geo Prizms and Toyota Corollas.  Obviously (since Geo hasn’t been around for 12 years) that is a dated problem, but NUMMI is still alive, if not well.  Given that half of the partnership is comprised of now bankrupt General Motors (the other partner being Toyota) the status of NUMMI is kind of up in the air.  Also, the only General Motors car being built by NUMMI currently is the Pontiac Vibe and GM previously announced that the Pontiac brand is going to be eliminated.  The plant still makes Corollas and Tacoma pickups for Toyota.

Some NUMMI Links: