Last Word: Toyota Keeps Teaching Us

February 25, 2010
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The media abounded with stories and commentary regarding Toyota’s quality. For Toyota, a company built on a reputation of quality, this is a big setback.

In my January 2010 column, I wrote about the problems of Toyota becoming too large, too quickly and the increase of quality problems the company was experiencing (‘Big’ Problems for Toyota). At the time I wrote the column in December, I could hardly have expected how these quality problems would unfold.

The media abounded with stories and commentary regarding Toyota’s quality. For Toyota, a company built on a reputation of quality, this is a big setback. They have suffered a huge “black-eye” regarding these multiple recalls. However, unlike the multiple recalls that have plagued U.S. automakers during the past, Toyota and its dealers have responded in ways that demonstrate a degree of courage its peers do not possess.

Toyota shut down all production for nearly a week so that it could identify and correct process, design and manufacturing problems related to the recall.

Akio Toyoda, president of Toyota, made a public apology before Japan and the world for quality issues related to the recall and in particular, problems with the Prius model.

Local dealers pulled sales and other personnel from their normal duties to help schedule and facilitate gas pedal fixes and other issues related to the recall.

Toyota and some of its individual dealers have bought air time-the dealers paid from their own pockets-to advise Toyota owners what to do in case of encountering the acceleration problem or how to schedule their recall. One such commercial is this one running in the Washington, D.C. metro area, feature=player_embedded.

The company continues to meet the situation head on. When was the last time you saw one of these steps taken by a U.S. automaker after a recall?

When the Chevy Express and GMC Savanna were recalled during 2008, did you see GM’s then-CEO Rick Wagoner make a televised apology to the country?

When the 2009 Dodge Ram was recalled for issues that could result in loss of steering control, did U.S. Secretary of Transportation Ray LaHood go before Congress and warn people not to drive their Dodge pickups?

Source: Toyota Motor Corp

For how many weeks did Ford suspend manufacture of the 2009 Ranger when it was discovered that front wheel spindles were at risk of cracking, resulting in the truck crashing?

Some might suggest that Toyota is taking the above-mentioned measures it has because of fear of losing market share vs. concern for their customers. That’s a cynical view of a company that has a long reputation of putting the customer first. What sets the Toyota recall apart from other recalls is that they prompted it without government intervention, the usual catalyst for recalls. In a country that demands action be as quick as picking up a burger from a drive thru, Toyota’s actions were slow, but the company wanted to identify the problem and provide the correct fix rather than rush its actions and have an inadequate solution.

Toyota’s situation teaches manufacturers to act courageously in meeting quality problems. They have been taking a beating in the media, among analysts, from competitors and various governmental bodies who all have a stake in seeing them lose their reputation and sales. In such a situation, you would likely face a similar challenge. Nothing is a more time-honored tradition than knocking a champion off his pedestal.

Toyota’s recall is a lesson to never take quality for granted. Quality must be under continuous review up and down the supply chain, and from design through manufacturing. Manufacturers need to continually evaluate their processes regardless of whether market share increases, decreases or remains static.

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