Business Operations on ToyotaF.docx
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Business Operations on ToyotaF.docx
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BusinessOperationsonToyotaF
Operationmanagement:
casestudyofToyotarecallcrisis
Toyota,whichfoundedintheyearof1937byKiichiroToyoda,isoneofthemostfamouscarmanufacturersintheworld.Sincetheyearof2008,ToyotahadexceededGeneralMotorstobethelargestauto-manufacturersintheworld,bothinthesalesandproduction.However,Toyota‘sleadingstatusintheautomobilehadchangedattheendof2009,duetoafatalcrushwhichresultingfromthestuckofgaspedalthathappenedinU.S.A..Asaresult,Toyotahadtorecallnearly9millionvehiclesaroundtheworldwithin6months(Toyota,2010).Indeed,thequalityofToyotaproductscantracebackto2006,whensomeoilpipingsystemproblemswaspublicized.Intheyearof2008,becauseofproblemofmanualtransmission,Toyotahadtorecall80000cars.Later,someerrantcaranddeadcasethatreportedbythemediahasmadethesituationevenworse.
AllofthesehavealreadychangedtheexternalenvironmentofToyota.Inthemodernsociety,externalenvironmentarecrucialtothesuccessofanorganization.Thecomponentofanorganization’sexternalenvironmentisverycomprehensive.Externalenvironmentincludesfivecomponents,namelycustomers,government,economic,competitionandpublicopinion(Cole,etal.2004).Eventhoughitishardforanorganizationtocontroltheexternalenvironment,itimportanceontheorganizationisobviously.Thecustomersistheend-useroftheproducts,theirlikeordislikemaylargelyinfluencethemarketshareoftheorganization.Publicopinion,whichhasadirectrelationshipwithanorganization’simage,isalsoimportanttoanorganization.Thepositivenewsoftheorganizationcanhaveapositiveimpactontheorganizationwhichmayencouragecustomertobuythecompany’sproducts.However,negativeorganizationorproductwillleaveanegativeimpressionforthecustomerswhichwillinfluencethesalesattheend.Intermsoftheotherthreecomponentsofexternalenvironment,itwilllargelyinfluenceanorganization’smarketingstrategies,expansionofthebusinessandsoon(Mason,2007).
ThechangingoftheexternalenvironmenthasalreadycausedsomeconsiderablenegativeimpactsonthereputationofToyotaproducts.TherecentsurveyhasalreadyclearlyshowedthenegativeeffectonthecustomerintheNorthAmerica.AccordingtothesurveythatcarriedbyBloombergpollinMarch2010,40percentAmericanssaidtheydonotwanttobuyToyotaproductsanymore.Moreover,thesurveyalsoshowedthat36percenthavesomenegativeimpressiononToyotaproduct,whichwaslargelysurpassingcustomers’negativeimpressiononanyotherautomobilemanufacturersinthesurvey(GreenJ.GreilingA.2010).Moreover,Toyota’smarketsharewasdecliningquickly.Intheyearof2009,themarketshareofToyotaautomobileintheNorthAmericanwas15.9percent,however,intheyearof2010,themarketsharehadalreadydecreaseto12.8percent(GreenJ.GreilingA.2010).ThedecreasingofreputationandmarketsharewilldefinitelyinfluencethecompetitiveofToyota.JustasBloombergpollshowed,thecompetitiveofToyotahasbeenexceededbyFordafterthepublicizedofthedifferentqualityproblems.
ThedecreaseofsalesandreputationofToyotaCompanyisnotresultfromasinglereason.Itisthecausedbymanyfactorsfromproductstomanagementandtoservice.First,itisresultfromthequalityoftheproduct.Justaswhathasbeenmentionedbefore,thequalityproblemsofToyotaproductshasemergedintheyearof2006,theexposureoftheoilpipingsystemproblems.ButToyotadidnotsomeeffectivemeasuretochangethesituationwhichmadethesituationevenworse.ThesecondreasonleadtothedecreaseofsalesandreputationistheToyota’sresponsetothequalityproblem.Aftertheexposureofthequalityproblem,insteadtoresolvetheproblemquickly,Toyotawastryingtohidetheproblems.Accordingtoareport,Toyotacompelledcustomerstosignabackdoorcontracttopreventcustomerstospeaktheirsufferingtothepublic(CBCNEW,2010).ThethirdfactorthatmadethesituationworseisToyota’smanagementsystem.WiththepurposetosupplantGeneralMotorstobeNo.1intheautomobilemarket,Toyotaisgrowingatanincrediblespeedinthelastfewyears.However,theincreaseofbusinessisnotbackedupwiththeinnovationofmanagement,whichhasledtolosecontroloverthequality.AllofthefactorsworkingtogethertocontributingtothebadsituationthatToyotahavetoface.
Simply,wecanjustuseofgraphtoshowthereasonledtothiscrisisandhowthecrisisinfluencetheorganization.
TheRecallCrisisToyotasuffered
Outsourcingstrategy
Accessoriesareproducedfrommanyorganizations
Integrationproblem
TechniqueProblems
Qualityproblems
Accident
SlowrespondtotheCrisis
Poormediamanagement
PoorCrisismanagement
RecalltheProduct
Thedeclineofthereputation
re-designtheottomanontheseat
Inordertoconfrontthechangingofexternalenvironment,somemeasuresmustbetakenbytheorganization.Asthereasonsarequitecomplex,themeasuresshouldbeverycomprehensive.Firstthefirstpark,wehavelearntthattherootcauseoftheToyota’scrisisisthequality,sothefirststepToyotashoulddoistoimprovethequalityoftheproducts.
Installnewbrakeoverridesystem
re-shapetheacceleratorpedal
Improvethequality
Actually,Toyotahasalreadytakensomemeasurestoresolvethetechniqueproblemsandthenimprovethequality.Inordertoresolvetheproblemthatthepetalmaybestuckbyottoman,Toyotahasre-shapedtheacceleratorpedal,whichwillenlargethespacebetweenpetalandcarottoman.Second,somenewottomanontheseathadbeenre-designed.Thirdly,brakeoverridesystemhasbeeninstalledtoincreasethesafety,thisnewsystemhasalreadybethestandardsysteminCARMY,andtheorganizationfurthertoclaimthatmosttheautomobilesthatmanufacturedbyToyotawillinstalledthiskindofsystem.Aftertheinstallationofthissystem,whencustomersusebarkerandaccelerationtogether,theenginewillstopworkingatthesametime.
Thesecondstepistoincreasetheirservicetomakeupthenegativeofthequality.Accordingtothereportwhichhasbeendemonstratebefore,atthebeginningofthecrisis,Toyotawastryingtohidethefactfromthepublic.Thisactionandattitudehasmadethethingsevenworse.Foronething,itmadetheorganizationmissedthebesttimingtoresolvethiscrisiswithleastcost.Ontheotherthing,itmadealotofcustomersthedoubttheethicofToyota.Asaresult,thereputationaswellascustomers’loyaltywasdecreasedatanamazingspeed.Fortunately,theattritionandserviceofToyotaautomobilechangedalotlater,whichenableToyotatowinitscustomersandreputationfinally.
Changeofthemanagementstrategy
Leaderapologizeforthecustomer
Helpthecustomerstoresolvetheproblems
Recoveryofthemarketshareandreputation.
First,Toyota’sattitudetothisqualitychangedalot.Intheyearof2010,thepresidentofToyotaorganizationapologizeforthecustomerwithasincerelyattitude.HefirstadmittedthetechniqueproblemsofToyota,andthenapologizeforthecustomersforwhattheyhavesuffer,thehepromisethatToyotawilltrytheirbesttheresolvetheproblemproperly(Whoriskey,2010).Thiskindofsincerelyattitudewillhelptheorganizationtorebuiltthecustomers’confidenttoToyota,andalsowillhelpretaintheloyaltyfromcustomers.
Despitethechangingoftheattitude,Toyotaalsotooksomeactiveactionstoresolvetheproblemsthatcustomershavebeensuffered.First,theorganizationsentsomelettersoremailstotheownersoftheautomobileswhicharesufferingtheproblemsofqualitytowarnthemthepotentialsafetyproblemtopreventsometragedieshappenedagaininthefuture.Second,Toyotachangedthedesigntheinternalinternetsystem.IfthecustomersinputtheirVehicleIdentificationNumber)online,theywillknowtheirwhethertheirautomobilesareinvolvedinthequalityproblemsornot(Toyota,2010).Ifthecustomersfoundtheirvehicledoinvolvedinthequalityproblemsandalsointherecalllist,theycanjustfillaformonline,thensomelocalToyotadealerswillcontactcustomersandmakeanappointmentintermsoftheirconcern.ToyotaalsoopenanewcustomersservicelineinToyotaCustomerExperienceCentretohelpanswercustomersenquiry.Allofthesekindsofactionbringmanyconveniencestothecustomer,whichhelptoretaincustomers’loyalty.
Moreover,Toyotaalsochangedthemanagementstrategy,whichhadproventobeverysuccessfullater.First,Toyotacarriedoutsomenewregulationstoimprovetheservicequalityoftheorganization.Ontheonehand,Toyotawillpunishthestaffsthatconcealthesituationonpurpose.Ontheotherhand,theorganizationsendsemailorlettertowarncustomersaboutthesafetyoftheautomobile.Furthermore,Toyotaalsoestablishedsomeneworganizationtodealwiththisaccident.First,theysetupnewSafetySupervisionCommitteetomeettherequirementsofthelocalcustomers.Thisnewdepartmentcanstrengthenorganization’scontroloverregioncontrolandalsoprovidequickerrespondentlocalcustomers’enquiries.Second,theyhiresomemoreengineerstoconstituteaspecialaccidentgroup.Alsotheytrainedandprovideequipmenttodistributorstoenhancetheirabilitytomodifytheproblemcars.
Allofthemeasuresareprovedveryusefulintheend.Accordingtothesurvey,boththereputationandsalesofToyotawererecoveryquicklyafterthecarriedoutofthersmeasures.Accordingtothesurvey,Toyota’spurchaseintendshasincreased
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