...5/19/13 Toyota Recall: Five Critical Lessons | Business Ethics You are here: Home » Business Ethics, Economy, Featured Story, Michael Connor, Recent Stories, Regulation & Legislation » Toyota Recall: Five Critical Lessons Toyota Recall: Five Critical Lessons Posted by Michael Connor • January 31, 2010 • Printer-friendly by Michael Connor Toyota’s announcement of a technical fix for its sticky gas pedals – which can lead to sudden acceleration problems - is not likely to bring a quick end to the company’s current recall nightmare. Having already halted sales and production of eight of its top-selling cars in the U.S. - and recalled more than 9 million cars worldwide, in two separate recalls – Toyota faces the prospect of billions of dollars in charges and operating losses. The Toyota brand, once almost synonymous with top quality, has taken a heavy hit. While all the facts are not yet in, it’s clear that Toyota’s crisis didn’t emerge full-blown overnight. Fixing the problem and ensuring that something like it doesn’t happen again will require an all-out effort, from assembly line to the boardroom. Even then, there are no guarantees. Maintaining a good corporate reputation in the 21st century is tricky business indeed. Toyota’s case offers a number of valuable lessons for other business people and companies to consider. Here, for starters, are five: Aggressive growth can create unmanageable risk. Toyota’s desire to supplant General Motors as the world’s number-one car-maker...
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...Toyota Recall: Five Critical Lessons Posted by Michael Connor • January 31, 2010 • Printer-friendly by Michael Connor Toyota’s announcement of a technical fix for its sticky gas pedals – which can lead to sudden acceleration problems - is not likely to bring a quick end to the company’s current recall nightmare. Having already halted sales and production of eight of its top-selling cars in the U.S. - and recalled more than 9 million cars worldwide, in two separate recalls – Toyota faces the prospect of billions of dollars in charges and operating losses. The Toyota brand, once almost synonymous with top quality, has taken a heavy hit. While all the facts are not yet in, it’s clear that Toyota’s crisis didn’t emerge full-blown overnight. Fixing the problem and ensuring that something like it doesn’t happen again will require an all-out effort, from assembly line to the boardroom. Even then, there are no guarantees. Maintaining a good corporate reputation in the 21st century is tricky business indeed. Toyota’s case offers a number of valuable lessons for other business people and companies to consider. Here, for starters, are five: Aggressive growth can create unmanageable risk. Toyota’s desire to supplant General Motors as the world’s number-one car-maker pushed it to the outer limits of quality control. “The evidence that Toyota was expanding too much and too quickly started surfacing a couple of years ago. Not on the company's bottom line, but on its car-quality ratings...
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...UMS University of Modern Sciences Project: Toyota’s Business Environment and its Recall Policy Toyota Motor Corporation is Japan’s number one carmaker. Toyota has international presence in over 170 countries worldwide. It manufactures cars, pickups, minivans, and SUVs include models such as Camry, Corolla, 4Runner, Land Cruiser, Sienna, the luxury Lexus line, and full-sized pickup trucks. It has huge financial strength, a sales turnover of 131,511 million for 1997 and sales growth of 29.3%. It is the second largest car manufacturer in the world, after General Motors. Some of the key reasons for its success include: Successful brand - Toyota has developed a trusted brand based on quality, good performance and for being environmentally friendly. Innovation - Toyota is at the forefront of car manufacturing innovation. It was the first car manufacturer to embrace lean manufacturing (known as Toyota Production System) which is a faster, more efficient process which leads to less waste compared to the traditional batch and queue method of manufacturing. It also applied JIT (Just in Time manufacturing) and smart automation. Product Development - Key to the success in the car market is new models which stimulate demand and loyalty to the Toyota brand. Toyota has reputation for producing cars which are greener, more fuel efficient, and of good performance. Toyota has sought to meet government requirements (for reducing the impact on the environment), economic...
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...end-of-manufacturing testing with in-line monitoring and testing using SPC. It shifts the focus from device-level to process-level. The foundation for this approach is a TQM approach within the manufacturing environment. It enables a manufacturer to apply for the Malcolm Baldridge National Quality Award within five years of the initial request for the QML status. (Spurgeon, Susan P., Marcinko, Frank, Mengele, Martin J., Lyman, Richard C. "QPL or QML - A Quality Trilogy Approach." 1990 - ASQC Quality Congress Transactions - San Francisco. 1990, pp. 189-193.) QML approach certifies processes rather than individual parts. The key objectives of the QML are: • built-in quality • training and motivation of all employees • Continual improvement the two steps in achieving QML status are: certification and qualification. Certification Requirements. The certification requirements are: • controlled processes • continued improvement • quality-management approach • self-audit with quality enhancement • technical-review board (TRB) acting as corporate conscience • verified reliability of process Qualification Requirements. The qualification requirements are: • Demonstration of the stability and predictability of the manufacturing line (for example, two actual microcircuits and the standard evaluation circuit [a line-monitoring vehicle] must be run on the QML-certified line). • comparison of qualification, yield, reliability, and failure-mode analysis to data on those two products ...
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...I N S T I T U T E F O R D E F E N S E A NA LYS E S Ford Motor Company’s Investment Efficiency Initiative: A Case Study James L. Nevins Robert I. Winner Danny L. Reed, Task Leader April 1999 Approved for public release; distribution unlimited. IDA Paper P-3311 (Revised) Log: H 99-001057 This work was conducted under contract DASW01 98 C 0067, Task AD-1-950, for the Office of the Deputy Director, Systems Engineering, Office of the Director, Test, Systems Engineering and Evaluation, Office of the Under Secretary of Defense (Acquisition and Technology). The publication of this IDA document does not indicate endorsement by the Department of Defense, nor should the contents be construed as reflecting the official position of that Agency. © 1999 Institute for Defense Analyses, 1801 N. Beauregard Street, Alexandria, Virginia 22311-1772 • (703) 845-2000. This material may be reproduced by or for the U.S. Government pursuant to the copyright license under the clause at DFARS 252.227-7013 (NOV 95). Preface This document was prepared for the Office of the Principal Deputy Under Secretary of Defense (Acquisition and Technology) under the task order Defense Manufacturing Strategy, and addresses a task objective, to provide a case study on integrated product/process development implementation. This case study will be used for acquisition and technology training purposes by the sponsor. Many of the incentives, strategies, and implementation approaches at Ford have parallels...
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...Matching Dell BA 4700 October 12th, 2010 Bing Bai Zexin Li Ian Ruehle Erin Strack Chun Zhang Introduction The Dell Computer Corporation was founded in 1984 by Michael Dell, who began the company by refurbishing IBM clones out of his dorm room for extra money. From the beginning and through the 1990’s, the company grew quickly and was very successful. Dell used a cost leadership strategy and focus on creating products that were already in the market place, but changed the timing of production and the method of distribution that was in place with the company’s competitors by assembling computers to order and selling directly to the customers. The company focused on creating value for customers and meeting their needs, but into the new millennium they lost touch with the needs of their customers, which caused a significant decrease in their share of the market. In order to understand what made Dell so successful from the period of 1984 through 1998 it is useful to evaluate several analysis tools including an examination of Dell’s market segmentation, a STEP analysis, Porter’s Five Forces Model, an evaluation of the company’s value chain, and a CRIG analysis. Market Segmentation The majority of Dell’s customers were large corporations and government entities who ordered large numbers of computers and also reordered in following years as repeat customers. The customer base was broken down by entity and location so that each segment could be better served with more efficient...
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...Matching Dell BA 4700 October 12th, 2010 Bing Bai Zexin Li Ian Ruehle Erin Strack Chun Zhang Introduction The Dell Computer Corporation was founded in 1984 by Michael Dell, who began the company by refurbishing IBM clones out of his dorm room for extra money. From the beginning and through the 1990’s, the company grew quickly and was very successful. Dell used a cost leadership strategy and focus on creating products that were already in the market place, but changed the timing of production and the method of distribution that was in place with the company’s competitors by assembling computers to order and selling directly to the customers. The company focused on creating value for customers and meeting their needs, but into the new millennium they lost touch with the needs of their customers, which caused a significant decrease in their share of the market. In order to understand what made Dell so successful from the period of 1984 through 1998 it is useful to evaluate several analysis tools including an examination of Dell’s market segmentation, a STEP analysis, Porter’s Five Forces Model, an evaluation of the company’s value chain, and a CRIG analysis. Market Segmentation The majority of Dell’s customers were large corporations and government entities who ordered large numbers of computers and also reordered in following years as repeat customers. The customer base was broken down by entity and location so that each segment could be better ...
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...Production and Operations Management, BUS 5461 Abstract Apple, Inc. is a $170B global corporation that designs, markets and sells consumer electronic products such as the iPhone, iPad, and the Mac computer. Apple has structured their manufacturing and supply chain processes to take advantage of China’s cheap and plentiful labor. However, Apple has made an innovative decision to have the new ultra high-end Mac Pro partially manufactured and assembled in the US. This report includes research and analysis on the benefits available to Apple by expanding production in the US. Recommendations are presented that will help ensure apple succeeds in moving production to the US, and help reduce the risks Apple faces as a global corporation. Tables of Contents Chapter I – An Introductory Look at Apple, Inc………………………………………. 5-6 Chapter II – The Issues Facing Apple…………………………………. ……………… 6-8 Chapter III – Analysis: A Closer Look into Apple..…………………………………… 8-15 Chapter IV – Recommendations..……………………………………………………… 15-20 Chapter V – Summary ……………………….………………………………………… 20-22 References……………………………………………………………………………… 23-26 List of Figures Figure 1:Average Hourly Compensation Costs in Manufacturing, U.S. Dollars, 2002-2009….....9 Figure 2: Average Hourly Compensation Costs in Manufacturing, U.S. Dollars, 2002-2009……9 Figure 3: Air Charter Shipping Costs Estimate ………………………………………………...13 ...
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...Introduction In the post-war period, Japanese companies developed the concept of lean production. Lean production was regarded as the third step in the historical progression, which took industry from the age of the craftsman through the methods of mass production and into an era that combined the best of both (The Economist 2009). Lean production was designed to combine the flexibility and quality of craftsmanship with the low costs of mass production. And due to its unique characteristics bringing an underdog company in its industry to the market leader, this idea of lean thinking has been adopted by many other industries. Today ‘lean’ may no longer be fashionable but its core principles (flow, value, pull, minimizing waste etc.) have become the paradigm for many manufacturing (and service) operations (Lewis 2000). In this essay, my main argument is that although success of lean production and its positive impacts on corporate competitiveness is undeniable, nevertheless, from the workers’ point of view, lean production has also increased the pressures of work and the degree of exploitation wherever it exists. In the first part of my essay I will present a brief history of lean production. This will be followed by the demonstration of main characteristics and the analysis of how lean production has impacted corporate competitiveness by utilizing Toyota as an example, which is the birthplace of lean production. Part three will spell out the limits of lean production as...
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...office use only: Date scanned and returned to student……………………………………………………. TABLE OF CONTENTS Page 1. Question 1 Motivation 2 1.1 Lessons about staff motivation 2 1.2 Details of motivation theory 3 2. Question 2 Conflict and negotiations 4 2.1 Identification of conflicts 4 2.2 Overall nature of conflict 5 2.3 Possible ways of dealing with conflict 6 2.4 Best way to resolve the conflict 8 2.5 Avoiding a conflict 10 3. Question 3: The Perils of Leadership 11 3.1 “Experts cannot agree if leadership is a trait, a characteristic, a role, a style, or an ability” 11 3.1.1 Definition of leadership 11 3.1.2 Strengths and weaknesses of the trait theories of leadership 11 3.2 Contingency leadership theories 13 3.3 Contention that sometimes leadership is irrelevant 20 4. Question 4: Groups and Teams 22 4.1 Identify and explain groups or teams 22 4.2 Lessons learnt from work experience 23 4.3 Advise on course of action to take 24 5. Bibliography or list of references 25 Question 1 Motivation 1.1 Lessons about staff motivation from the work practices of Uddevalla The people at Uddevalla were demotivated because of the anomaly of the working situation, which was as following: * In the assembly shops, the organization structure was flat, and for a very long...
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...1.0 Introduction Intense competition and pressure from customers to reduce prices has forced many companies to reduce their costs to survive. Automotive manufacturers such as BMW and Mercedes have found that most of their costs are committed once the production begins, and thus, the cost must be reduced earlier in the product life cycle, particularly while the product is in the planning and design stages. Mercedes Benz is a multinational division of the German manufacturer Daimler AG, headquartered in Stuttgart. The brand is often used for building luxury automobiles, buses, coaches, and trucks, widely known as one of the most established and oldest automotive brand in the world today. 2.1 Cost Management Techniques Adopted by Mercedes Benz 2.1.1 Target Costing Target costing prices are assumed to be set by the market on a competitive basis. In a market economy, values are defined by the users. As Mercedes move closer toward a global economy, prices increasingly become uncontrollable variables, while costs, because of technological advances, increasingly become controllable variables. When selling price and profit margin are fixed by competitive pressures and management policies, respectively, reducing the firm’s production costs may be the only source of increased earnings. Mercedes Benz, one of the worlds most prestigious and tradition laden car makers, has taken its time to wake up to the daunting dimensions of the challenges it faces in the rapidly changing world...
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...Teradyne Corporation: The Jaguar Project Project Management Case Analysis PRESENTED TO Dr. Rupesh Kumar Pati Submitted BY Sudha T (EEPOM-05-029) Suman KR (EEPOM-05-032) Mithun Mukundan (EEPOM-05-010) Manickavasagam Ramasamy(EEPOM-05-008) Yeshaswini Rajendra (EPGP-03-193) About Teradyne Corporation • Teradyne was founded by Alex d’Arbeloff and Nick DeWolf, who were classmates at the Massachusetts Institute of Technology (MIT) in the late 1940s. • Teradyne was the world's largest supplier of equipment for testing semiconductors • Teradyne is a 45 year old corporation • Sales of $1.8 billion in 2004 with over 6000 employees • Teradyne corporation has following major units: – – – – Semi-Conductor Test (64% revenue) Assembly Test Broadband Test Connection Systems and Diagnostic Solutions About Jaguar Project •In 2001, the company started planning of Jaguar, a completely new tester platform intended to create a new system architecture that would form the basis of one of Teradyne’s major product lines for the next decade. • The project was envisioned as a culmination of sorts in Teradyne’s 8 year effort to improve product development process •In 2001 O’ Brien, a 25 year veteran of Teradyne’s engineering organization is appointed as project leader •Company decided to abolish the markets-segment-focused platform into a single platform engineering group •Teradyne senior management made a pivotal strategic decision to embrace a flexible platform strategy • Main emphasis...
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...example, Design for Assembly (DFA) concentrates on the enterprise process of an Assembly that is part of the life cycle production. DFA take into account five to nine key factors associated with the subject product, incorporating part symmetry, weight, fits, size, form features, orientation and so on. It takes into account 5-9 key factors associated with the assembly process such as gripping, special tooling, inserting, equipment, handling and so on (Filippi & Cristofolini, 2009). Careful examination of these issues and their association leads to a better design conclusion with respect of the ease of assembly. Additionally, an atmosphere of teamworking cooperation is formed, thus assembly efficiency is enhanced. The letter X in the DFX is composed of two sections: performance ability and life-cycle processes x. It is a concurrent approach to DFSS, but DFX concentrates on important business elements of concurrent engineering, that is, maximizing the utilization of the scarce resources to the DFSS team. In addition, DFX offers a systematic technique for analyzing design from a spectrum of perspectives. It empowers teamwork within the contemporary DFSS surrounding. The principles of DFX can be discussed through the context of the following DFX tools: * Design for Manufacture and Assembly * Design for Reliability * Design for Maintainability * Design for Serviceability * Design for Life Cycle Cost The Design for Manufacture and Assembly technique offers...
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...example, Design for Assembly (DFA) concentrates on the enterprise process of an Assembly that is part of the life cycle production. DFA take into account five to nine key factors associated with the subject product, incorporating part symmetry, weight, fits, size, form features, orientation and so on. It takes into account 5-9 key factors associated with the assembly process such as gripping, special tooling, inserting, equipment, handling and so on (Filippi & Cristofolini, 2009). Careful examination of these issues and their association leads to a better design conclusion with respect of the ease of assembly. Additionally, an atmosphere of teamworking cooperation is formed, thus assembly efficiency is enhanced. The letter X in the DFX is composed of two sections: performance ability and life-cycle processes x. It is a concurrent approach to DFSS, but DFX concentrates on important business elements of concurrent engineering, that is, maximizing the utilization of the scarce resources to the DFSS team. In addition, DFX offers a systematic technique for analyzing design from a spectrum of perspectives. It empowers teamwork within the contemporary DFSS surrounding. The principles of DFX can be discussed through the context of the following DFX tools: * Design for Manufacture and Assembly * Design for Reliability * Design for Maintainability * Design for Serviceability * Design for Life Cycle Cost The Design for Manufacture and Assembly...
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...Based Management Activity Based Management Executive Summary: Management practices and methods have changed over the years and the organizations are moving to managing vertically to managing horizontally i.e. to move from functional orientation to horizontal orientation. TQM, JIT, BPR are all examples of horizontal management improvement initiatives. However management systems have lagged significantly in tracking and providing information about the horizontal aspects of business and Activity based costing /Activity based management mirrors this horizontal view. The focus of ABC is to provide accurate information about true costs of products, services, processes, activities etc. Activity based management makes this cost and operating information useful by providing value analysis ,cost drivers and performance measures to initiate, drive and support improvement efforts and to improve decision making abilities. This report deals with the application of ABM in American Seating company. Company was faced with increasing competition and it wanted to become a cost leader. The company lacked the information about true product and services cost to decide on which business areas to pursue. Company implemented ABM to conduct a detailed analysis of its activities and more accurately mirror resource consumption by process, product and customer. Company successfully identified customer profitability differences and achieved 40 % reduction in order processing costs. ABM was...
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