Problems faced by Toyota
Based on the articles, there are 3 broad issues that Toyota currently faces. These includes (1) Deteriorating quality (2) Inefficient factories and engineering practices (3) Rising vehicle and labour costs
Deteriorating quality
According to another article, Consumer Reports reported that it will no longer actively recommend Toyota’s car due to the slip in product quality. This was evident from the fact that Toyota recalled more cars than sold in 2005. Subsequently in 2007 after the release of the Consumer’s report, Toyota recalled another 470,000 cars. Toyota’s rapid global expansion was cited as one of the cause of quality problems. The other possible reason for the slip in quality could be due to many components involved in the production of Toyota’s vehicle, as well as the complexity in production, which could have increase errors during the production process.
Order qualifier refers to the set of criteria for a firm to do business in a particular market segment. Quality is likely to be regarded as an order qualifier in automobile industry since it would concern the safe use of the vehicle and the users. Toyota also holds the reputation of being able to produce quality cars in previous years. Therefore, quality issues may deter consumers from making Toyota their choice of car, which would result in Toyota losing its competitive edge over time.
Inefficient factories and engineering practices
Toyota values incremental improvement, yet on top of quality issues, inefficient factories and engineering practices has led Watanabe to question Kaizen as the core principle of the organisation culture. There were too many components used in Toyota cars, which increases production time and cost. More components means that more inputs in the form of raw materials, manpower and operational time required during production. On the other hand, machines in Toyota’s factories were deemed to be too space consuming and heavy, reducing the efficiency and effectiveness of the employee’s work. For instance, more employees would be needed to operate, move and maintain machines of larger size. Furthermore, more energy would be required to run the machines and maintenance cost were likely to be high. Large machines also made waste management efforts difficult for Toyota, which not only increase cost but makes work environment unfavourable to house an efficient production line. The impact on Toyota was that such issues limited improvements to the organisation’s efficiency and incremental improvement in operations was not significant. For instant, the time taken to assemble a car improved only slightly, from 21.6 hours in 1998 to 21.4 in 2005. As a result, Toyota could possible face the threat of losing its market share to its competitors.
Increase in vehicle and labour costs
Toyota was found to be paying excess for the vehicle parts used in the production of its cars, as compared to its competitors. One likely reason could be due to the large number of components used in assembling the vehicle, which increases the cost of raw materials and procurement costs. Another reason would be the complexity in assembling the parts which calls for employees with more specialised skills and this increases labour costs due to training and sourcing for skilled labour. Over the years, Toyota has regarded cost advantage – being able to produce automobiles of great quality at best prices, as part of its competitive advantage over its competitors. However, the discovery of such a fact has proved otherwise.

Toyota’s Remedies
In view of the problems surrounding Toyota’s operations, “Construction of Cost Competitiveness for the 21st Century” (CCC21) was an effort initiated to counter the above mentioned problems, especially for the engineering practices. As part of the initiative, Toyota worked with parts suppliers to improvise the design of vehicle parts by simplifying them and at the same time making them less expensive without compromising quality. Simplification of the design include the consolidation of the countless specifications for wire harnesses, reducing the number of components used in a typical car by half and development of new and flexible plans to assemble the simplified cars.
In addition, Toyota worked with equipment suppliers to shrink the size of the caster by a third. In order to maintain competitive advantage, Toyota forbid its suppliers from selling the technology to its competitors over a period of six technology. Besides that, a mini-lifter was developed to replace the lifter on rails in assembling of gasoline tanks into the vehicles. The advantages of the mini-lifter includes being less space consuming and allowed workers to be able to work more efficiently as they can have access to the underbody of the car. By doing so, Toyota managed to reduce the length of the production line and introduce quality-assurance checkpoints in view of the deteriorating quality problems that Toyota was also facing. Another action taken to reduce the production line was the shortening of the vehicle painting process.
Furthermore, Toyota also highlighted future plans of establishing low-cost production plants. Within such factories, Toyota expects the production of their vehicles to be much faster and the task of the workers would be made more efficient. Instead of having the workers to pick up individuals parts, these vehicle parts would be delivered to the workers inside the cars, which helps to save time. Toyota also intend to have include fewer vehicle components which perform the same function, thereby reducing procurement costs and simplifies the work of the workers.

Conclusion
In view of the problems identified and the proposed measures to counter them, Toyota has great expectations. The consolidating of wire harnesses would be expected to achieve a 30% cut in the company’s procurement costs in 5 years through 2004. The use of smaller machines and improved production processes would also reduce the cost of building the low-cost production plants by as much as 30%. Along with cost savings, improved quality and more a more efficient production line can be expected.
However, all the above remedies has a greater focus on the internal analysis of Toyota, as it deals largely on the weaknesses and works on leveraging on the strength of Toyota. As highlighted in the article, an external factor – the rise of inexpensive Chinese suppliers, which may affect the performance and success of the plans which Toyota have in place. The greatest advantage of switching to the use of Chinese suppliers would be cost savings, and being able to compete more effectively with its rivals in terms of production costs. However, Toyota may face more quality issues and their technological intelligence may be leaked out to rivals. This would result in Toyota losing their market share eventually. On the other hand, not buying from China suppliers wold allow Toyota to better keep check quality level, but executives would need to work harder to cut costs from other aspects.
A balance approach to this concern would be able to help Toyota excel and regain its market share amidst the ever-changing global auto industry.

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[ 1 ]. Welch, D. (2007, October 17). Toyota's quality slips, again. Retrieved September 8, 2015