Introduction Supply String Management ON THE Toyota Recall Marketing Essay

The Toyota Recall

The recent recall of thousands of automobiles by the Toyota Company represents a substantial event within the organizations record. In being widely thought to be one of the most notable companies in as far as their management and developing processes are concerned, the company has arguably suffered a significant blow by the faulty accelerator systems that contain been the reason for such a recall. The question develops though concerning whether or not this very concern could have been prevented from occurring, and not just does the quality control and quality management come into play but the respective supply chain within the framework encircling the accelerator items should come under evaluation.

Organization Background

The Toyota Company has long since been touted as being a leading example in as far as quality management, source string management and related issues within the organizational setting up. With writers providing insight in to the so called "Toyota Way" (Liker 2004), "Toyota's keiretsu strategy" (Hino 2006), "Toyota's Renowned System" (Iyer 2009) and "the slim production system" (Wisner, Tan & Leong 2009), amidst others one certainly is pointed to the actual fact that the company is well well known within the greater industrial and manufacturing sectors. This will not eliminate from the actual fact that something went wrong on the way and it is evidenced by the mentioned recall of thousands of motor vehicles, never to stated the possible brand damage and financial implications that may impact upon the organization in question. One may further argue that could possibly have been averted, with the proper supply string management handles and checks in destination to prevent this from taking place.

Liker (2004) offers a quantity of key issues highly relevant to Toyota's supply chain management, including the levelling out of development schedules because they build up inventory as well as additional making processes, which in line with the author appear at face value to be slightly counter intuitive. However these processes that Toyota have fine tuned over the countless years of operation may have come to a point of complacency or even excessive cost efficiency, leading to the mentioned recall of the motor vehicles.

The Toyota Production System (TPS), mentioned by Lyer (2009) provides that this system is central to the factories of the business and the source chain management is much greater, held in the actual fact that "it spans suppliers to Toyota as well as possibly the suppliers' suppliers, the distribution channel, the dealers and eventually the consumers". This affirmation really justifies the actual fact that Toyota as an organization, and within the framework of supply chain management, is ultimately responsible for the defective or insufficient technologies which were installed within their product system and automobiles.

One may argue that there are two main issues that may have added to the lapse in quality management, being that of too much cost lowering or seeking unnecessarily high cost efficiency and / or that of complacency within the quality and resulting resource chain management process. Based on the US regulators who are mainly behind the recalls of the Toyota vehicles, the main element issues surrounding such insistence is based upon the vehicle security aspect, and the likelihood or eventuality of any accidental injuries or deaths taking place because of this of defective parts within the automobiles. According to Reuters, the ongoing research in to the possible safeness concerns have uncovered that "conditions of unintended acceleration in Toyota vehicles have been linked to more than 50 fatalities in america during the last decade" (reuters. com), these facts certainly bring into question the product quality and supply string management of the business.

The extent to which this recall has influenced the automobiles made by Toyota is worth mentioning, as this straight impacts upon the financial aspects in dealing with such a recall, and therefore directly affects underneath line of the company. There are two main problems with respect to the recall, being that of accelerators sticking credited to condensation as well as being presented down by floor mats in the vehicle. A complete of 8 million automobiles have been recalled since October 2009, on a worldwide basis. In addition to this the company has been required to stop creation of some of the motor vehicle models in question and from a regulatory perspective the Toyota Company has agreed to pay a $16, 4 million national fine in america (Reuters). These facts therefore provide the basis of how when something runs incorrect or amiss within the resource chain how the results can reverberate into various areas of the company involved. Regarding to Willacy (2010) the financial impact added to a reported world wide web loss of almost $5 billion last year, even though the latest reports show that the production and sales of Toyota are significantly better on a season on season basis, regardless of the recalls and related loss herein described.

In its broadest sense the supply chain can be involved with the provision of the merchandise or service from the specialist to the user, and has all relevant procedures, people, systems, materials and so forth within this "cycle". The source chain of Toyota, or any business is not only limited to that of parts, and the creation phase, but influences a wide variety of components of the business in question, which in turn filters right down to the employees that are responsible for implementation of regulations and practices within the business. This facet of the supply string management process is quite crucial to ensure that the related quality aspects are placed in balance. Cox (1999) offers a all natural view of the supply string management process within the fact that it is a "thought process" within an organization that heightens functional efficiency and effectiveness throughout all delivery stations, both internally and externally to aid the delivery to the finish individual. This therefore implies that there is certainly both a tactical as well as an functional aspect to the topic here, something which has prevailed at Toyota, for many years, regardless of the recalls which have took place both now and before. This approach is often referred to as the "lean paradigm" which in turn seeks out providing maximum value to customers, reduction in over creation tendencies, eradication of waste recognition of all stakeholders within the procedure (both interior and external), logistics management and transfer of low fat paradigm to suppliers, network of resources building long-term relationships and get win associations (Cox 1999). One of the main quarrels here's that the misuse strategy within the resource string must be reduced to an absolute minimum in ensuring the utmost value is delivered to the client. Lyer provides that the majority of such waste materials within the automotive industry has been as "due to poor supplier management" (p. 87), and therefore such provider management becomes important within the resource chain, however these talked about faulty parts are thought to have come from external suppliers, which therefore raises questions with regards to such supplier romantic relationships as well as the product quality management aspect thereof. In this case though, with the issues associated to the recall, and much more specifically the many types of the motor vehicles that contain been affected, including the wants of the Camry, Highlander, Avalon, Prius, Corolla, Matrix and Venza.

As previously stated the facet of quality management or control enters into the picture here as part of the supply chain management aspect. The reason for this is that every aspect of the business enterprise process within the source chain management must be monitored and improved upon where possible to ensure that the utmost quality is provided to the customer, declining which such issues as the linking of the increased loss of lives to faulty technology may appear and harm a business' reputation and financials quite significantly. Toyota has been quoted to be committed to the Total Quality Management (TQM) via their subscription to the Six Sigma idea, which strives for a 3, 4 defects per million produced (Liker). The excess term of "Kaizen" is utilised within the Toyota construction, which loosely translated into British means ongoing improvement (Liker), however it appears that such improvement might have been forsaken within the supply string management process towards cost and creation efficiency. Hence with such conversation of defects, you can surmise that the TQM concern must expand to the supply chain management process too, and with around 8 million autos recalled it is questionable as to whether this is indeed the situation.

The effect of the business's culture, therefore called commitment to the quality process extends to the dealer, as was previously mentioned, and as validated by Winfield & Hay (1997). The creators further provide that the suppliers are often times invited or urged to participate within the look procedure for parts, even while culminating an "atmosphere of long term trust". This trust, however is not forthcoming immediately, as is provided in the explanation of selecting the suppliers for Toyota within the source chain within the UK " Winfield & Hay provide that of the 2000 people in the united kingdom only 105 were eventually chosen to be suppliers to Toyota. Interestingly enough the specific traits and attributes searched for by Toyota within their dealer selection process and positively pursued corresponding to Winfield & Hay (1997) include that of:

Management's perceived willingness to learn and modify;

Evidence of an existing proactive frame of mind to problem fixing by personnel;

Their collective willingness to meet up with the challenges of altered working tactics.

These have a substantial impact upon the suppliers of the Toyota, who subsequently have to meet these requirements, qualities and features extended by the company, and thereby reducing lots of the individuals or companies that won't fit into the Toyota culture and "way to do things". However with such a upright selection and partnering criteria, the issue of the defective accelerator pedals still arose, alongside the advertising speculations and accusations of implied knowledge of the potential personal savings that the business had saved with respect to utilising particular suppliers, who may have been in charge of such defective parts and technology, highlighting once again that the possible striving for cost and functional efficiency may have been the primary cause of the defective parts and the declining of the entire quality within the making functions of Toyota.

As of the existing time frame, the analogy of the Toyota Company with regards to the recalls, the TQM and overall supply chain management it appears as though the business has certainly taken the time and initiative to handle these concerns correctly. This is situated within the latest record of the business preparing to record an operating income in excess of $1 billion, even after the most severe historical recall within the business's history. Within the whole process of the recalls, as well as the management thereof the company has undoubtedly drawn out all puts a stop to within their commitment to the finish user, which is highlighted by their various initiatives in setting up focus organizations, investigative etc. Toyota has furthermore remained open and genuine regarding their whole operation, within that your agreed after fine as well as the continued communication with Toyota customers, within which full mailings have ended up out to every single influenced customer, as well as providing online search capabilities for customers to check whether or not they are damaged by the recall in question.

Toyota's management has arguably remained consistent inside their stated goals of quality, and providing the best value to their person despite the occurrence of the recalls. Just how within which the whole process has occurred was resolved with integrity and efficiency that is situated at the core of the Toyota culture. This may be likened to the 4th P contained within Toyota's corporate model, also referred to as "Genchi Genbutsu" or Problem Solving (Ongoing Improvement and Learning), which is highlighted within just how that this whole process has been handled.

Undoubtedly the recall issue within Toyota may have had a significant impact upon the business, and may furthermore have awakened a realization for the necessity of controlling possible complacency within the business ranks, and perhaps even the questioning of the efficiency at all costs. The positive way within which the leadership have maintained this "disaster" within their quality and offer management operations is commendable and is noticed in the recent operating revenue reviews as well as the producing upsurge in both production and sales of the Toyota motor vehicles and brand in general.

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