What Are Your Thoughts About Toyota’s Situation?

As regular readers of this blog know, I am not a big “news” reporting guy.

In other words, I rarely read a news story and then bang out an article around it since, honestly, this type of writing bores me beyond words.

But, unless you live under a rock, you’ve no doubt heard about how Toyota is up against it in a big way making this a bit more than your normal, every day, news.

And then Brian, a reader of the blog, sent me the following email making me feel even more compelled to offer my two cents. Here is what Brian asked.

Ron – What are your thoughts on how Toyota is handling this huge recall? They seem committed to finding root cause (using 8D methods like 5 Whys? etc) since they suspended sales of 8 models. But I think they should have drilled deep to ID root cause & corrective action BEFORE they suspended sales… because the media seems to be grilling Toyota over the “half-baked” plan of suspending sales before recall actions happen. Huge PR black-eye for Toyo, don’t you agree?

I’ve owned Toyota car for many years, luckily our RAV4 is not in the recall this time.

All the best,
Brian

Jidoka

Most lean practitioners understand the concept of Jidoka. It’s a pillar of the Toyota Production System.

The basic premise of jidoka is to immediately stop what you’re doing once an issue has been identified.

At that point, if it’s feasible and safe, a temporary solution may be implemented allowing things to start back up.

Then, a more thorough root cause analysis will be done allowing for a permanent countermeasure to be implemented ensuring the problem never occurs again.

When to Stop the Line?

Now, many are questioning the way Toyota is handling this. Some think they’re crazy for stopping production like they have.

Me, I don’t think they’re crazy at all. In fact, if anything, I think they waited too long.

I am not sure when they first realized the severity of the problem… but I am guessing it was some time ago. So, once the problem was identified I think they should have stopped production then and there.

But, to be fair, perhaps they did stop as quickly as possible. I am there so I don’t want to be too judgmental.

Sticks and Stones

Now, what about the press? Is the Toyota PR team doing the right things?

My guess is Toyota is far more concerned with finding a root cause and implementing a countermeasure then they are about how to spin the press machine.

So, sure, Toyota is feeling the pain right now. Their stock has taken a beating and many of their competitors are jumping for joy.

But it will not surprise me to see Toyota not only survive this devastating issue but also come out of it stronger than ever.

What do you think?

So, I’m curious. What do you think about the way Toyota is handling this problem? Are they doomed to become the next GM begging for bail out money? Or will they come out of this stronger than ever?

Comments

  1. Erin Lewis says:

    I tend to agree with you. I can only imagine what the Big 3 would have done in this situation. Shutting down all production is probably the last thing they would have done.

  2. I think the lack of PR is going to hurt Toyota a great deal. The idea of stopping the line is alien to many people and I have found myself explaining the concept a number of times recently when the subject of Toyota has come up. The first reaction most people seem to have is to question the potential severity of the problem that would cause a car company to stop all sales, especially when compared to past recalls from companies that have been handled in much quieter fashions. GM has of course taken advantage of this by suggesting the problem is more widespread than it is (suggesting they have numerous Toyota owners clamoring to trade for a GM and they would be glad to offer a special deal for Toyota trade-ins). It’s unfortunate that so much of their potential market will not understand and will instead see this as a sign of the seriousness of the problem (rather than the seriousness that all problems should be addressed with).
    I applaud the courage it must have taken to stop production and sales on such a wide scale and I hope they are looking into far more than the mechanical root cause of the gas pedal failure, such as whether other processes had failures that should have caught the problem in product development, design, production, or testing.

  3. As a Toyota shareholder I can say that this is obviously not a desirable situation. On the other hand – what an incredible learning opportunity for product development, QA, recall planners, and so forth . I think it is a very temporary setback. Customers need to feel that their safety is Toyota’s number one priority, and they are going to accept issues like this if Toyota is open and honest about it.

  4. Coming for the Automotive Product Engineering field myself, I have to say they are handling the situation fine, they are actually sending some media adds to the public in the news paper about “temp pause” for their sales, this shows the commitment of Toyota for Quality and their commitment to safety. I was once an Brake Design Engineer myself, and as such I was very careful in any design development involvement, and it takes a lot of ethical work when negotiation brake design issues with other departments, however when situations were critical like a Brake recall , sense of urgency was the most important factor to address any solution technique. Toyota is expert at finding solutions, root causes, new improvements….and watch they sure will compensate their customers later, to ensure a fast come back, although this will mean more money down the pipe. It is hard times for Toyota now , same what happened with Ford for the Firestone tires, but they will get just fine if fine a quick and quality solution. I once read and article from the Lean Enterprise Institute, that is attached to or facebook site if you like to read it, its called ” Lean Beyond Toyota” worth reading.

    http://www.facebook.com/pages/Lead-360/328359350650?v=app_2373072738&ref=search#/topic.php?uid=328359350650&topic=13841

  5. I was always told, “Bad PR is better than no PR”. All companies have recall nightmares, window blinds are can strangle young children and the company just puts a tag on it that says hazard. Toyota is will come out of this stronger than ever.

  6. Matt Hahn says:

    I agree that Toyota will be stronger for this and I truly believe the weak ass so called “marketing” crap GM is pulling will further thrust them into the depths of business doom.

  7. Toyota should stand tall as they did to the root cause – let’s see
    Firestone = 119 deaths with Explorers – many lawsuits, much denial
    Read about the Ford Pinto case at http://www.wfu.edu/~palmitar/Law&Valuation/Papers/1999/Leggett-pinto.html
    Those are just two that come to my mind on the philosophy “we will fix it when someone sues us”. So Toyota should be hailed and praised for doing it before someone else said “you got to do this”.

  8. Bill Gordon says:

    Toyota’s current actions in stopping vehicle production certainly reflect the application of one of the two pillars (Jidoka) of the Toyota Production System (TPS). However, I expect that Toyota briefly halted assembly operations when the problems originally surfaced to ensure materials met specifications and workers assembled parts to standards. But, since this problem did not occur on the production line, but rather while in use by customers, it could not easily isolate the root causes. I believe Toyota has approached this issue in a manner consistent with how it normally conducts business.

    To understand better how Toyota is handling the problem of sudden acceleration, I suggest we look beyond the two pillars of the TPS (Just-in-Time and Jidoka) and consider Principles 12 and 13 of the Toyota Way (Liker, 2004).

    Principle 12 (genchi genbutsu) teaches that one must go to the source, observe the problem, and make decisions by “verifying data rather than theorizing on the basis of what other people…tell you” (p. 40). I suspect this presented a challenge for people within Toyota, including high-level managers and executives, since they could not observe the event as it occurred and had difficulty recreating it. Current reporting suggests their analyses have uncovered a number of acceleration related issues with probably different root causes.

    Principle 13 (nemawashi) guides Toyota’s management to “implement decisions rapidly” (p. 40) and cautiously only after considering all options and making a “decision slowly by consensus” (p.40). I suggest that the perceived delays in announcing vehicle recalls resulted from this time-consuming, consensus process. I believe in this case, it not only “broaden the search for solutions” (p. 40), it uncovered a number of different problems.

    Despite all the bad PR, I suspicion that the pain experienced by Toyota today will further drive continuous improve (one of the pillars of the Toyota Way) and result in an even stronger position in the market.

    Reference

    Liker, J. K (2004). The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer. New York, NY: McGraw Hill

  9. The news, talk radio, the blogs I visit daily have been buzzing with news of the Toyota recall. Is this a chance for GM and Ford to regain market share? Is Toyota in free fall? Thus far I believe there are a few ways to look at the situation: 1) Toyota has strayed, covered up, and reacted much to slowely damaging their immage imeasurably. 2) Toyota shut down factories, jumped on the problem and will rectify the situation maintaining brand loyalty and will go forward. 3) Toyota strayed from its core principles, did not react quick enough, and will use this as a case study for future continuous improvement.
    Those of us who believe that TPS/lean is system within a culture of continuous improvement driven by a profound respect for people think that Toyota will have a temporary set back but will eventually emerge a better company. Most companies would recall the vehicals fix them and move on, Toyota however will view this defeat like a great athelete who after defeat will retreat, reflect, train harder, learn from the losss and emerge a stronger competitor. I would beware if I were GM or Ford and not underestimate Toyotas’ culture in their pursuit of perfection.

  10. Jeremy Garner says:

    Well, hindsight is 20/20. We should have been more vigilant when questions first arose. I have heard a couple of different repsonses from consumers: There are some products/services that you’re just sold on. No matter who seems disgruntled, if you’re a delighted customer, there’s a gravity toward what you’ve grown to trust and love. Not to decrease the severity of the situation but some people are more prone to fear, others don’t waste their time fretting over statistical risks unless it happens to them directly. The bad usually comes before the better. It has been repeated in Toyota’s history that we thrive and press forward under adversity. It is impressive to me how Toyota has handled the recession. I am confident that we can learn from our mistakes, take ownership and move forward from this problem as well.

  11. Well said, Jeremy. Thanks for the comment and keep fighting.

  12. I wrote Ron the original email that kicked off his blog post. Thanks Ron & LSS posters for the insightful discussion.

    I belive in Toyota’s TPS/Lean, and practice TPS/Lean at my work as product engineer/manager. I believe Toyota will emerge stronger after this fiasco, as long as they take the needed steps to REBUILD TRUST among car buyers. I’m hoping the plethora of class action lawsuits hitting this week ($100million, $200 million, and higher) do not snowball… that could sink this fine company.

  13. Yes. Toyota did the right thing.
    If their PR was not adequate, it may be because that part had not been exercised enough.
    Waiting for a PR position to be defined and in place before stopping production would be to compromise customer concerns.

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