Toyota is an expert leader and globally known name in the automobile making industry. The company has been successfully manufacturing and selling strong automobiles worldwide. “It employees 320,590 people worldwide, and it is mainly into motor production and sales business. It is a 397.05 Billion Yen Company head quartered in Japan.” (Toyota Company Profile Overview, 2012).
Why Toyota can Drive Success at the World’s Best Manufacturer? Toyota enjoys a leadership position in the car making industry as a remarkable and reliable car producing company. Its production system known Toyota Production system had been the origin of inspiration for many firms in the automobile industry for its operational efficiency and reliability. Also, Toyota’s ever-widening problem leads vehicle safety issues.
Toyota is a Japanese vehicle maker that was found in 1933 and headquartered in Toyota city, Japan. In North America Toyota presently manufactures a total of 12 vehicles, which consist of the Avalon, Camry, Corolla, Highlander, Matrix, RAV4, Sienna, Sequoia, Tacoma, Tundra, Venza and the Lexus RX 350. (Toyota Company Profile Overview, 2012).
Toyota having at the same time high-quality, low-cost, short lead-time, flexible production over time and broadly based across the system. As Johnston (2001) Concluded Toyota has developed a set of principles, Rules in use them, that let organizations connect in this self-reflective design, testing, and improvement so that each one can contribute at or similar to his or her potential, and when the parts come together the total is much, much better than the sum of the parts.
According to Fawcett (2007), core capability is something that the company does so well that it provides the company a competitive benefit. Firstly, Toyota’s core competencies are their creation system which is known as Toyota Production System. This is consisting of Lean manufacturing and Just In Time Production. Lean Manufacturing is the production practice in which it is focusing on the cleaning of waste and continuous development over long-term. Lean Manufacturing has been confirmed to be successful in improving productivity and reducing cycle times.
On the other side, Just-In-Time production is the invention practice in which it is focusing on sync the material flow so that when one item moves out from a work station, another item is ready to move in. It allows Toyota to keep their stock to the nominal levels, and this can help the company to reduce the cost considerably. Toyota Production System has enabled Toyota to gain competitive advantage over their rivals. In addition, another Toyota’s core competency is their trademark management.
Toyota has been successful in their marketing plan in which their brand has been accepted in all over the world. It means Toyota did not produce many of their vehicle parts. They just focus on assemble those parts to build cars. In fact, those suppliers also provide their car parts to the other companies, not only to Toyota. Thus, it is evident that Toyota is truly selling their “brand” name on their cars.
Toyota’s product development system use of a knowledge-based product development system founded on set-based concurrent engineering, system designer commercial leadership, obligation based planning and control, and an expert engineering workforce. “Set-based design introduces redundancy into the design process by allowing at least two different subsystem designs to be developed concurrently, one with little risk and additional ones with higher capabilities but also higher risk.
To enable set-based design, Toyota uses trade off curves as a tool for managing subsystem performance as well as product modularity.”(Ruediger, 2004, p286). Toyota develops an expert engineering workforce by organizing developers functionally. Developers join a product development effort only for as much time as is needed. They report to supervisors who have been chosen for their technical expertise rather than for their managerial prowess. The primary role of these supervisors in the functional organization is to enhance the expertise of their organization.
Nevertheless, Toyota is known for quality vehicles, but the recall caused Toyota’s brand image to become damaged. In 2009, Toyota was alleged to have manufactured an electronic defect in the accelerator pedals of some of its models. Toyota’s announcement of 4.4 million car recalls in the past three weeks brings to 8 million the number of Toyota cars now pulled in for repair worldwide since November 2009. The recalls and their expected impact on sales put at risk of across Asia, the US and Europe. (Messenger, 2010). As Toyota Press Room (2009) Toyota has taken this emergency as an opportunity. It has taken steps to enhance the quality and performance of its car brands. A committee tasked with analyzing the crisis has been set up.
This especially set their concern to the quality checks the cars are meant to be subjected to. This committee is being leaded by the CEO and President of Toyota the committee’s liability is to manner a well organized and complete inspection of all the courses that the vehicles are subjected to in their manufacture.
By doing so, they will be able to determine how the problem came about. According to LeBeau (2010) in 2010, that changed owing to the recall of more than a million of their vehicles. The recalls were due to accelerator pedal sticking to the floor resulting in accidents. As 2010, Toyota is confronting law suites concerning the accelerator problem. In addition to the recall over than million vehicles worldwide, Toyota for exhausted its feet recalling the faulty gas pedals and is accused of knowing and hiding the crisis.
Since the problems happening, it has always released press releases to keep the public in the know. The Toyota has also sent mails to the holders of affected car brands. This has been done with the aim of retaining their clients by taking them into confidence. Thus, these affected consumers get the sense that Toyota has their safety in mind. An official website that gives updated news about the recall has also been accessed and can be accessed by all its customers. These steps are meant at protecting its brand’s right.
“In the stir of the recall by Toyota, a certain car brands owned by Toyota were faced by the issue of consumer mistrust. The recall happened because of problems to do with acceleration, brakes and floor mat of the cars. Although all this affected the branding of the Toyota, it has taken many steps to protect its brands from consumer distrust.” (Brooks, 2010).
Nowadays, customers are expecting premier possible excellence products with lowest possible costs. This gives stress to the company to always improve and innovate. Failure to create will lead to the loss of market shares to their competitors. Innovation manufacturing has been introduced by Toyota through its Toyota Production System. This is useful for the improvement of the company system wide process by linking the main company, suppliers and customers that improve the quality and at the same time reducing expenditure.
However, in order to go on in the future competition, Toyota should be able to apple its core competencies. Network direction which is part of the Lean Manufacturing principles can be exploited in the future through Early Supplier Involvement. For the company like Toyota in which they depend on few suppliers, getting the suppliers involved early is critical. Toyota recalls case arisen because of the poor contact between the Toyota and its suppliers. In the future, Toyota needs to get their supplier to be thoughtful early to avoid the error. Also, Toyota recall issue has tarnished Toyota image as the high quality car maker.
In this case, brand management as one of Toyota’s core competencies must be exploited so that Toyota’s image can be a replacement in the clients mind. Toyota can use marketing strategy such as repositioning strategy to change the position itself as an innovative and user friendly vehicle manufacturer rather than high quality vehicle manufacturer. A brand like Toyota can influence its solid foundation by learning from its past which had earned glories and market leadership. It still enjoys the customer trust and loyalty and should ensure its customers and markets that it has learned from its mistakes and going forward Toyota ensure same rock solid quality and reliability in its products widely known as Toyota way.
Brooks, K. (2010) Toyota is wounded, but in the long term the brand is strong. [Online]. Available at: http://www.cityam.com (Accessed: 8 February 2010).
Fawcett, S.E., Ellram, L.M., & Ogden, J.A. (2007), Supply Chain Management: From Vision to Implementation. USA: Pearson Prentice Hall.
Johnston. S. J. (2001) How Toyota Workers into Problem Solvers. [Online]. Available at: http://hbswk.hbs.edu (Accessed: 26 November 2001).
LeBeau, P. (2010) Toyota’s latest crisis show linger cost of earlier mistakes. [Online]. Available at: http://www.cnbc.com (Accessed: 2 July 2010).
Messenger, A. (2010) Toyota recall highlights crisis in global auto industry. [Online]. Available at: http://www.wsws.org (Accessed: 12 February 2010).
Ruediger. K (2004) Book Reviews, Journal of Product Innovation Management, 21(4), pp285-287.
Toyota Company Profile Overview. (2012) Toyota. [Online]. Available at: http://www.toyota-global.com (Accessed: June 2012).
Toyota Press Room. (2009) Toyota Begins Interim Notification to Owners Regarding Future Voluntary Safety Recall Related to Floor Mats. [Online]. Available at: http://pressroom.toyota.com (Accessed: 02 November 2009).