Toyota Operations Improvement Plan Essay

Words: 2288
Pages: 10

About Toyota
For more than 50 years, Toyota Motor Corporation has been one of the world’s leading manufacturers of motor vehicles in the United States. It was born a Japanese company in 1935 and came to America in 1957. Now headquartered in Toyota City, Japan, it employs more than 300 thousand employees globally (Toyota Motor Corporation Company Profile, 2012). In addition Toyota is a global marketing organization. It strategically operates primarily through Japan, Asia, Europe, and North America; but its vehicles are sold in more than 170 countries and regions across the globe (Toyota Motor Corporation Company Profile, 2012). The Toyota brand is traditionally defined by brand attributes such as global leadership, innovation,
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To add insult to injury, it’s now lower credit rating would add additional long term financial strain for Toyota.

Problem Statement
Toyota's reputation in the automotive industry is built upon quality and reliability. However, as a result of a series of poor management decisions and poorly implemented strategies, Toyota’s culture was transformed from one which utilizes TPS to one which prides itself on velocity and cost cutting. This cultural change lead to operational decisions that resulted in recalls of more than nine million automobiles, including the Toyota, Camry, Corolla, Tundra, Tacoma, and Lexus models, citing safety issues which in some cases resulted in the death of customers. It further resulted in financial losses and the degradation of Toyota's reputation as its customers now second guess the quality and reliability of the company's products.
Figure 1
It is perplexing to some that a company as highly exalted as Toyota could fall so far so fast. However, Figure 1 emphasizes the impact that the new cost focused strategy set forth by management had on manufacturing. It demonstrates that the culture incentivized cost savings and velocity forced employees to choose between strategy and the founding principles of Toyota, TPS. In many cases, when employees encountered these decision points, cost won. As a result, defects were passed further and further down the line until they were eventually reported by the