Analysis of the individual causes of the problem on the production system of Toyota - Essay Example

?Executive Summary This paper examines the operational issues that relates to the Toyota mass recall. It is a proposal on how to diagnose the problems that led to the manufacture of defective cars. The proposal examines the quality control systems, the unusual events that led to the defects and analyses the scope of the problem and how the issues with stakeholders, mainly consumers, investors and suppliers that arose from these events can be resolved to re-instate the image of Toyota. The paper begins with an insight into the problem, and a review of literature. It then proceeds to outline a practical approach that can be employed to conduct the research and come up with the final deliverable. It also gives a detailed Work Plan. Introduction Toyota is one of the best known automobile manufacturing companies in the world. Toyota however went into crises last year due to some technical problems that are related to its operations management systems. Two million cars were recalled because of defects. The defects have been traced to the production lines and the company has announced that the problem can be solved if cars with defects are sent for repairs with authorized dealers. So far, 77 complaints have been lodged in the Japan and about 100 in the United States. About 7 different brands are due for mass recall in Mexico as well. There have been mass recalls of some of the cars that are affected by these defects. The defects are related to accelerator pedals and out of position floor mats. This causes the accelerator system to jam and leads to overspeeding which can and have caused accidents in Japan, United States and Mexico. Preliminary research has shown that the overspeeding does not happen suddenly but gradually, and it is not connected to the electronic systems of the affected cars. Clearly, the problem with these defective Toyota cars can be traced to the production systems of the manufacture of these cars. This research is a proposal on a diagnostic system for the analysis of the operations management system of the defective cars and a diagnosis of the source of the problems in the manufacturing system. Aim: The aim of the research is the diagnose and identify the cause of the defects in the Toyota cars affected by the accelerator system problems. Objectives: The objectives of the research is to: 1. Examine the normal manufacturing and quality control systems used by Toyota in the United States, Japan and Mexico (the affected countries of the problem). 2. Analysis of the research, design and manufacturing lapses that are responsible for the accelerator defects in the cars in question and the failure of quality control to detect the problems. 3. The scope of the problem and future implications of these problems in the production line of Toyota and analysis of best way of solving the problems at hand. Literature Review The case of Toyota indicates that there were numerous levels of problems and challenges that hit the company. Hiles (2011 p582) gives a series of empirical evidence that is collated from the Kelley Blue Book Survey which shows the impact of the recalls on various levels to Toyota. These affected the customers, suppliers, the worth of vehicles and dealers. Competitors also increased interest in their brands due to Toyota's lapses. Although one might be tempted to think that the problem of Toyota was mainly an Operations Management problem, these outstanding statistics and facts show that the problem had a knock-on effect on the various stakeholder interests of Toyota. This is because the nature of the car manufacturing industry is such that the engineering systems and operations are at the core of the activities of a given entity. And due to the potential fatal effect of any mistake or error in manufacturing, a car manufacturer needs to take care to ensure that the best is done to ensure that cars parts and assembling lines do the right thing to prevent defects. Thus the scope of the problem and any effort to rectify it will mean correcting the lapses in the operations of Toyota and presenting the new changes to the customers in a clear fashion to build customer and investor confidence in the brand. This is because any effort to correct operations without a corresponding strategy to rebuild the lost reputation will not yield much in the short-term rebuilding of Toyota's image. “CTS is the outsourced manufacturer of pedals for Toyota” (Shen & Huang, 2011 p359). The international car part manufacturer, CTS was the main company that was first suspected of being responsible for the series of defects. This is because Toyota purchased the parts used for the manufacture of these pedals from them. However, CTS denied any form of errors and they argued that they manufacture the same kinds of pedals for GE and Ford and no problems have been found in those pedals for Toyota's competitors (Shen & Huang, 2011 p359). This shows that Toyota might have had a unique and distinct problem which could be traced to some internal problem that Toyota alone has. Another obvious inference an individual can make is that the problem was therefore with the Assembling or co-ordination of efforts by Toyota's supply chain. However, Toyota's supply chain has an excellence status for organisational support (Hiles, 2011). This therefore implies that it might be quite remote to attribute the defects to the supply chain. And this difficulty confirms the need for a thorough diagnosis of the company's operation within the period prior to the production of these cars with defects. This will enable the researchers to identify whether the problem was from the CTS (the suppliers of the pedals), another point of the supply chain or from the assembling of the cars. Shen & Huang (2011 p359) however state that in the past 10 years, Toyota has added 17 overseas production outlets and many temporary outlets. This confirms the assertion that the problem might be from the agglomeration of Toyota. Shen & Huang go further to state that Toyota's supply chain is vertically connected. Vertical integration means “expanding a business by purchasing similar businesses in the same industry to support the production and growth system of the parent company” (Stevenson, 2008 p31). Toyota has a conscious policy of buying other partners in the business to enhance its position in trade. This therefore means that knowledge transfer improve when there is more interaction. It can therefore be logically suspected that the problem of Toyota is connected with the lack of co-ordination or some kind of failure in knowledge transfer. Shen & Huang identify the following pointers as the potential problems that originated from the expansion and vertical integration of Toyota: 1. “Correlation intensity and reliance between Toyota and suppliers became unbalanced” 2. “Supplier control became weak: under lean production, dependent coefficient for each other is very high” p359. With these assertions, CTS could have come up with a defence that it focused on what it was supposed to do and had no responsibility for knowledge integration and relative communication. This therefore puts Toyota in the centre seat for being responsible for the overall integration of the various components in its assembling plants. This recall by Toyota is not its first. “Toyota recalled millions of vehicles in 2005 and 2006” (Pride et al, 2011 p87). In other words there have been other cases where Toyota had to get customers to repair their cars because there were defects that were inherent in the manufacture. They therefore launched a new system for the control of their production lines and assembling quality control management called the Toyota Way (Weiers et al, 2007). Under the Toyota Way concept, there were four main pointers that was meant to ensure quality control in the fast expanding company (Weiers et al, 2007). First of all, there was the mutual ownership of problems. This means that every problem was to be shared and handled by the various suppliers and stakeholders in the production process that the fault could be attributed to. Secondly, there was the establishment of quality circles to deal with problems. These quality circles were responsible for specific problems that occurred within their domain and different points in their scope. Thirdly, Toyota Way sought to solve problems at source. This means that each problem which came up at every point in time was to be investigated and solved at its root with little emphasis on where it was detected. Finally, Toyota Way sought to institute a new idea of an urgent and constant drive to improve work processes. This means that there was a quest for continuous improvement in the operations and systems of Toyota. “Supply Chain Management is “the management of different but inter-connected components of a business with the view of creating a product or service” (Hoover, 2011 p 11). In the case of Toyota, effective and efficient supply chain management systems are essential for the survival of the business since operational accuracy is key for the survival of the company. The main components of supply chain management are: product development, purchasing, manufacturing, distribution and storage and retail (Govil & Proth, 2001). Thus, supply chain management has various systems and methodology that are institutionalized in a given business. However, changes in the systems of a business causes significant modifications in the supply chain and this requires a new approach to supply chain management (Beyer, 2010). It can be logically inferred that the inclusion of new partners globally without a corresponding expansion of the quality control systems to cover these new partners' operations might have had some influences on operations. The supervision and/or transmission of a business' supply chain management systems after changes are made has implications on various levels of the business (Kerseten, 2010). Strategically the top-level management need to ensure that each new partner in the company is compliant with the long-term and organisationwide quality control standards and measures. Toyota should have ensured that each of its new businesses that it acquired in the vertical integration was strongly steeped in the Toyota Way concept. Tactically, it is important for the deficiencies of each unit in the supply chain to be identified and solved. In other words, Toyota should have taken reasonable steps at all times to ensures that new challenges in the partner businesses are identified and solved at a periodic interval. This was outlined in the Toyota Way concept but as to whether it was adhered to at all times is not quite certain. Finally, the actual work of each outlet of a business' supply chain needs to be identified and monitored on a regular basis. This therefore means that Toyota had a responsibility to ensure that each of the suppliers was thoroughly supervised either directly or indirectly to ensure that all defects were identified and corrected before cars were sold. Aside the components of the supply chain, there is a responsibility for businesses to ensure that the assembling of the main products are done in a safe and efficient way. Assembling is defined by Brown (2008) as the processes meant to put inventory together to form the final product for consumers. In the case of Toyota, it appears that the assembling could have been the main cause of the problem. This therefore means that there is a duty to check the assembling systems and processes to ensure that the whole fault did not emanate from there. Another important element of assembling is supervision (Havley & Murphy, 2007). This means that when supervision is lacking and/or poor, there is a chance that defective products will be turned in. Thus the case of Toyota could be attributed to poor supervision and as such, must be checked. Proposed Research Methods The research on the topic will be conducted in three phases in sync with the proposed objective stated above. Phase 1 This phase will involve an understanding of Toyota's systems and methods in operations. It will involve several approaches meant to identify the structures that existed in Toyota's branches that were affected by the recall program. This will be done through a vigorous approach to understand the supply chain systems and how they were operated. It will examine the manufacturing systems and structures that existed. Afterwards, the quality control systems that existed will be done to try to establish the status quo when the whole problems started. This will be done in a series of three exercises: Exercise 1: Archival studies will be conducted on the various structures of the business. This archival study will involve the examinations of the organisational structures of Toyota. It will examine the various reports and procedures that were in use and view available journals for how Toyota operated at that time. The deliverable for this stage will be a process map of the production systems of Toyota. It will focus on amongst other things, the supply chain of Toyota for the various manufacturing outlets. It will examine the way various stakeholders operated with Toyota in its manufacturing activities. It will then focus on understanding the manufacturing and assembling system of Toyota. It will look at the process flow and how various components of Toyota work together to assemble the cars. This will provide the researchers a thorough understanding of how things are done at Toyota. Exercise 2: Will involve the analysis of the quality control systems of Toyota. The concept of the Toyota Way will be analysed thoroughly. This will be done by perusing various archival documents like reports, minutes and publications of how the concept was propounded in the first place. The way they were practised in the various plants of Toyota will be examined through these archived materials and the trend will be noted. Afterwards, there will be analytical procedures like statistical analysis and time series analysis to test how effective this quality control methodology worked for the company. Exercise 3: This will be a qualitative evaluation of the systems by the people who were close to its operations. It will involve the collection of opinions of managers and supervisors through interviews. This will be followed by the collection of a larger volume of information from workers through questionnaires and surveys to collect their views. The main question that this exercise will explore is 'what do you think went wrong in your unit that caused the defects?'. This will entail the collection of information and hints on what actually went wrong from the perspectives of people within the organisation. Samples of managers and workers will be carefully taken from the various components of the supply chain and the assembling plants. The questions will be styled on the Toyota Way concept and the interviews and questionnaires will inquire about how the units of the respondents as well as related units approached certain problematic elements and components of the manufacture. The findings from this exercise will be the basic framework for Phase 2 of the Research. Phase 2 This phase will be a highly analytical phase that will try to identify possible causes of the defects and set out to test and evaluate the extent to which a given cause led to the recalls. It will be done in a series of three exercises. Exercise 1: This will be the collation of findings from Phase 1. It will aim at 'shortlisting' a series of possible causes of the defects. This will be inferred from the responses given by the various managers and workers. Based on this, a series of possible causes will be put together and the research team will confer with middle-ranked managers to find out if this is correct or not. After their responses, the possible causes of the defects will be confirmed and outlined. Exercise 2: This will involve the analytical assessment of the various causes outlined. It will involve the review of the individual causes of the defect and assessed for the probability and remoteness of the causes of the recalls. A statistical analysis of the problem will be done. This will be complemented by a time series analysis of the different causes and how effective they have been in the past when they were used. Exercise 3: This stage will involve the confirmation of the various lapses after the thorough investigations and analysis are conducted. Based on the findings of the various analyses and/or the strength or remoteness of the correlation between the cause and the shortlisted causes will be accepted or rejected. Phase 3 This will involve the confirmation of the scope of the problem. In other words, the identified causes of the problem will be examined and the extent of damage that they cause and can cause to future productions will be identified. These areas of potential intervention by the causes will be examined for their important and alternatives will be found. The finding of alternatives will be based on brainstorming and a specialized research into the matter. These conclusions will be implemented and new systems that eliminates the problems can be found and instituted by Toyota. The new systems and methods will be fused into the existing quality control framework. This will enable Toyota to come up with a new and more appropriate quality control strategy that will effectively eliminate the defects identified. When this is done, the best way of regaining the lost reputation can be discussed. Toyota can find the best way of presenting the newly established systems to the external stakeholders who matter: customers and investors. Work Plan The Work Breakdown Structure of the proposes research is as follows: Item Activity Proposed Action/Duration 1 Understanding & Documentation of the Systems Collection of information about the supply chain and assembling system of Toyota (2 weeks) 2 Assessment of Quality Control Systems of Toyota Evaluation of the various quality control systems that constitute the Toyota Way (2 weeks) 3 Qualitative evaluation of the systems Interview of Workers & Managers on what they thing might have caused the defects (3 weeks) 4 Collation of Quality Gaps Identification of possible causes of the defects from (1 week) 5 Analyses of the various Quality Gaps that culminated in the defects Evaluation of the various quality gaps identified and the acceptance or rejection of each of the quality gaps identified (3 weeks) 6 Examination of the scope of each quality gap in the production systems of Toyota Assessment of how the quality gap affect the different areas of production (2 weeks) 7 Consultation on the best way of solving the problem This will involve finding a technical system for the provision of a solution to the problem (5 weeks) 8 Integration of the new concepts into the existing quality control system This will involve finding ways of including these new systems in the existing systems (2 weeks) 9 Strategizing to regain lost reputation Examining the best way to regain investor and consumer confidence (1 week) Timeline Activity/ Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 1 2 3 4 5 6 7 8 9 References Beyer, Sven (2010) Supply Chain Reference Measurement GRIN Verlag Brown, Paul (2008) Implementing SOA: Total Architecture in Practice Michigan University Press Govil Marish & Proth Jean-Marie (2001) Supply Chain Design in Management: Strategic & Tactical London: SAGE Publication Havley John K, Murphey Barbara Melby (2007) Business Process Outsourcing NSW Prentice Hall. Hiles, Andrew (2011) The Definitive Handbook of Business Continuity Management Hoboken, NJ: John Wiley & Sons Publishing Hoover, William E. (2011) Managing the Demand-Supply Chain Oxford University Press. Kerseten Wolfgang, Blecker Thorston & Jahn Carlos (2010) International Supply Chain Management & Collaboration Practices Berlin: Springer Verlag. Pride William, Hughes Robert & Kapoor Jack (2011) Business Mason OH: Cengage Shen Gang & Huang Xiong (2011) Advanced Research on Electronic Commerce Part 2 London: Springer Stevenson, Johan (2008) Business Integrations Faraday Press Weiers, Ronald M, Gray Brian & Peters Lawrence (2007) Introduction to Business Statistics Mason, OH: Cengage Appendix Aims Topics Research Methods Process Plan Examination of the manufacturing and quality control systems of Toyota 1. Assessment of the supply chain systems. 2. Evaluation of manufacturing systems 3. Examination of implementation of quality control methods 1. Documentation of the various work processes of Toyota 2. Analysis of the quality control systems of Toyota 3. Qualitative evaluation of opinions of managers and workers on the causes of the problems 1. Examination of reports, procedures and organisational charts. 2. Statistical analyses and evaluation of the Toyota Way concept. 3. Collections of views and opinions through interviews and questionnaires. Analysis of the causes of the defects and recall 1. Assessment of problems in the supply chain 2. Quality control failures in the Toyota Way 1. Outline of possible causes of the problem. 2. Analysis of the various causes 3. Confirmation of the causes of the defects 1. Shortlisting of the various causes of the problem. 2. Evaluation and analysis through questioning. 3. Validation of the causes through technical means Scope of problem and best way to resolve the problem 1. Effect of the various causes on the production process of Toyota 2. Best way to regain the lost reputation. 1. Analysis of the individual causes of the problem on the production system of Toyota. 2. Correction of the causes and incorporation into the quality control systems. 3. Identification of best way of regaining investor and consumer confidence. 1. Evaluation of the scope of the problem on the manufacturing system of Toyota 2. Identification of the best way of solving the problem and the incorporation of this proposed method into the Toyota Way. 3. Undertaking of image analysis and the best way of regaining the lost reputation of Toyota due to the recalls. Read More