We recognize Toyota cars when we see them out on the street, in the parking lots, or in the showrooms. For many of us – Toyota car owners or not – Toyota cars project prestige, reliability, and quality. Unfortunately Toyota’s brand has been tarnished recently by the massive recalls mainly in the United States (US) due to faults in the acceleration and braking systems, among others. Toyota’s recent woes go beyond engineering realm. Toyota is known not only for its manufacturing excellence, but also for its corporate culture that incorporates continuous improvement principle, or ‘kaizen’. Implementing ‘kaizen’ requires empowerment of those people closest to the work process, to continuously improve and improvise.
Implementing ‘kaizen’ also implies spreading what you have learned and repeating it. ‘Kaizen’ is one of the pillars of the Toyota Way – an expression of values and conduct guidelines that all Toyota employees should embrace. Practising the Toyota Way philosophy, Toyota surpassed General Motors as the world’s biggest automaker in 2007. Countless books and articles have been published, commending the philosophy. And the engineer who developed the philosophy, Taiichi Ohno, was still revered as a god at Toyota.
Despite the recent events, Toyota knew how to protect their brand and win back their customers trust. In 1989, Toyota acted quickly to recall its Lexus cars, which were plagued with tail lamp overheating. In addition, Toyota provided each of the 8,000 Lexus owners with a free loaner while repairs were under way. The cars were washed and returned to their owners with a full tank of gas. Today, almost 20 years since they remarkably handled the quality issue in the Lexus model, Toyota has been slow to admit that they knew about the flaws before the problems surfaced, and have recalled close to nine million cars worldwide since October 2009. So what happened at Toyota? Have they failed to practice what they preached, i.e. ‘kaizen’?
The problem with Toyota seems to lie in its fast growth. In 2000, Toyota produced 5.2 million cars; in 2008, it had the capacity to produce 10 million. In between these years, Toyota added 17 production sites. Though rapid expansion benefited the company, it also put enormous pressure on the company’s ability to transfer corporate knowledge either from experienced staff to newer staff, or from one site to the other. Toyota’s incredible growth also means that it has inadvertently shifted its focus from quality to quantity. Massachusetts Institute of Technology (MIT) Operation Expert, Steven Spears, acknowledged this and added that shared corporate knowledge, which was accumulated by elite cadres of engineers and assembly workers over many years, was diluted by the demands of production.
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