Do you have a Toyota?

Do you remember the Toyota recall in Bahrain? Have you ever thought what really went wrong and why Toyota is recalling those vehicles?

I’ve read an interesting paper What Really Happened to Toyota?  that was analyzing the different recall acts of Toyota which took place in USA due to quality and safety issues. The paper analyzed the main reasons behind such issues as the brand image and sales revenue were severely impacted.

 Toyota and its chain of suppliers had always pioneered quality management methodologies of total quality control since they believed that quality, customer satisfaction and profits are deeply connected. Quality is a major component of Toyota’s strategy and production system, and was always looked at as a role model by other competitors, such as Ford, GE and Honda.

So what really happened that made “Quality” suffer?

The paper states that there are two main reasons behind the quality issues:

  1. Toyota executive management always believed that quality should have a high priority, however, when the new management came in, their focus has changed. The new focus was on rapid growth rather than quality. As Toyota expanded in new markets, from 2003 onward their sales grew faster than the company can manage, and therefore, growth had taken priority over the traditional focus on quality. The decisions were made in favor of meeting sales, cost cutting and profit target while sacrificing product development, supplier management and production.
  2.  The second reason is a result of the increasing complexity of car products due to technological changes. Government regulations on safety, emissions and fuel consumption and the rising customer demands for environment friendly cars with luxury features have all added to the complexity level. This point applies to other car manufacturer as well, but due to the continuous demand and market expansion, Toyota was faced with the challenge of changing its production process to meet the demand of safe, clean, fuel-efficient and comfortable cars.

 

Some of the process change decisions were to compress the lead time between exterior design approval and start of sales to less than 20 months. Another change in process was to introduce an accelerated design cycles that have stressed the development and production systems which have created conditions for quality failure.

 Toyota’s supplier management and its performance were also affected by the above two points. To meet the rapid demand and product complexity, Toyota had to outsource engineers and contract with new suppliers because the current engineers and suppliers were not sufficient. Most of those contract engineers and suppliers were inexperienced with Toyota’s standards and practices, and they were overseas (none Japanese speakers) contacts which had lead to coordination and communication problems.

I think that for any company, risk assessment should be conducted before moving with growth and expansion decision. With Toyota, the quality has suffered because they banded their core values of quality and focused on growth.

In your opinion, what went wrong with Toyota?

on Time with errors

We discussed different aspects of project management during our last class, which are highly important and rewarding if applied properly in real life. However, some projects, if not most, can go towards unwanted directions or results.

In the company I work with, we had a project of launching a new system at a specific budget and within a very short time (6 months). Both cost and time were out of negotiation, so we couldn’t increase the allocated budget nor increase or extend the project period. This was a real challenge and a very stressful situation. So what did we do? We worked together, the project
manager and the functional lead, and put all our effort in planning the project from the different perspectives of a project, such as:

  • Project integration management.
  • Project scope management.
  • Project time management.
  • Project cost management.
  • Project quality management.
  • Project human resource management.
  • Project communications management.
  • Project risk management.
  • Project procurement management.

It might sound a bit complicated, but with the help of PMBOK guide, which is a frame work for project management, we were able to plan and execute the project efficiently.

For more information on PMBOK guide, please click the below link:

http://en.wikipedia.org/wiki/A_Guide_to_the_Project_Management_Body_of_Knowledge

Our project was delivered on time and within budget but of course the output quality of the project was not superb. Because the emphasis from the higher management was on time and cost, we had to deliver a lower quality system that suffered from minor issues which were considered as none show stoppers.

Another issue that has contributed to the output quality was the changing requirements of system users. As the project progressed, the end users of the system had a clearer picture of their requirements and how the system should behave in
different cases. Such requests for changing the requirements or adding additional requirements are handled by monitoring and controlling process. Most of the requested changes were considered as chargeable change request, which means that we have to pay additional cost to the system vendor, and this of course was unfeasible, hence, the change requests were declined and the system did not deliver the modified or additional requirements.

From management point of view, they were happy that the project was delivered on time without exceeding project budget, however, from end users’ view; they considered that the project did not fully satisfy their requirements.

I personally think that we could have achieved a better quality results if the project was scheduled for a longer period (more than 6 months) because for any system, it has to meet end users’ requirements, and because it’s the end users who are going to use the system, not the management.

Do you think we should deliver a project on the specified time and cost even if the project’s output suffers from errors?

How would you act if you are in a situation where the higher management is only concerned about time and cost but not performance?