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Toyot A: Management - Pay Cut of 20% For Its Senior Officials

Toyota implemented several strategies in response to its quality recall problems: 1) Assigned 1000 engineers to spot-check quality and invested in a computer system to analyze data and spot trends. 2) Formed a team to troubleshoot defects globally. 3) Manufacturing became more stringent when approving cars as ready for sale. 4) Focused on fine-tuning aspects like vibration levels but this was at odds with the need to cut costs. 5) Appointed a new director to oversee safety issues. Toyota's strategy of pursuing both cost cutting and quality improvement is unrealistic as they counter each other, and maintaining quality should be the priority given its damaged image from recalls. Suggest

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Lloyd Palparan
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25 views2 pages

Toyot A: Management - Pay Cut of 20% For Its Senior Officials

Toyota implemented several strategies in response to its quality recall problems: 1) Assigned 1000 engineers to spot-check quality and invested in a computer system to analyze data and spot trends. 2) Formed a team to troubleshoot defects globally. 3) Manufacturing became more stringent when approving cars as ready for sale. 4) Focused on fine-tuning aspects like vibration levels but this was at odds with the need to cut costs. 5) Appointed a new director to oversee safety issues. Toyota's strategy of pursuing both cost cutting and quality improvement is unrealistic as they counter each other, and maintaining quality should be the priority given its damaged image from recalls. Suggest

Uploaded by

Lloyd Palparan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CASE: Quality Management Toyota (Chapter 12)

LLOYD M. PALPARAN BSA 3C


1. Develop a diagram that summarizes what Toyota has done in response to its
recent quality recall problems

Management
-Pay cut of 20%
for its senior
officials

Quality
-Assigned 1000 engineers
to spot-check quality
-Investing on a multilingual Manufacturing
computerto mine data and
spot trends
-Toyota made a team to
Toyot -Being more stringent when it
comes to filtering what is
acceptable as “ready to be
troubleshoot defects in the
US and now globally under
Swift Market Analysis
a sold” car. At the expense to
appease customers, it resulted
on higher recalls.
Response Team (SMART).

Product Design
-Concentration on fine-
tuning things such as level
of vibration in the level on
the steering wheels
-A new managing director
to oversee safety related
issues
2. Evaluate the statement in the case made by Toru Sakuragi that “…Toyota has
been caught between a need to cut costs to overcome the strong yen and the
need to improve quality to prevent recalls,” and that “[t]hey are now pursuing both
strategies, but they are essentially at odds with one another.” Is this a realistic
strategy? Do you have suggestions for how the strategy might be improved?
Toyota wants to cut cost and improve quality at the same time. Both objectives
essentially run counter to each other since improving quality would require investing
money and that would not equate to cutting cost. Such example of an investment made
by Toyota is the investment on TAQIC and SMART. TAQIC and SMART are essential
functions to identify and troubleshoot defects that would aid in improving the quality of
cars they make. Toyota may cut costs on other areas such as minimizing or eliminating
warehousing costs by implementing a JIT inventory system (which they already
implemented) but it is highly unlikely that this cost cutting measure exceeded the
investment on TAQIC, SMART and deployment of 1,000 engineers to spot-check
quality. Based on what is available on the case, Toyota’s strategy is unrealistic.
Maintaining their customers and market share through improving the quality of output
should be Toyota’s primary goal and cutting cost second, considering its image has
been tarnished when it recalled 10 million vehicles worldwide.
3. Suggest improvements that you feel could be made to Toyota’s quality program.
Also, what might Toyota do to improve its image to the consumer relative to
quality?
Based on the case, I observed that Toyota mainly focused on identifying defects and
fine-tuning things that are already deemed satisfactory but continue to do so to ease
perceived quality gaps. These kinds of efforts are a good way to create value and gain a
competitive edge when placed side by side with other brands. However, instead on
focusing too much on product design and quality, Toyota should have shifted some of
that effort to the root cause of the problem as to why there are a lot of recalled Toyota
vehicles worldwide. This may be caused by inadequate training of staff which caused
inconsistencies and deviation of the standard to what is acceptable to be sold in the
marketplace. Better training would result to a consistent and an improved quality of
outputs.
For Toyota to improve its image relative to quality, Toyota should market its cars
using strategies such as paid advertisements on television and on social media sites.
The advertisements should highlight how the quality and safety improved to make
customers aware of such features. Toyota’s Marketing team should also think of
positioning their advertising materials strategically such as traditional and digital
billboards in crowded places to reach a large audience or on areas where people with
high paying capacity is present to reach their target customers

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