Toyota’s sterling reputation for quality took a major hit in 2009-2010 with the recall of 5 million vehicles for unintended acceleration and braking issues. The auto maker was also slow to tell federal regulators about sticky accelerator pedals and was fined a record $16.4 million…not exactly the quality image the firm had built up over the past 4 decades! These quality problems led to a temporary shutdown of all US plants and a halt in the sales of 8 popular models.
Toyota’s situation would likely cause my mentor Phil Crosby to turn over in his grave. “There is absolutely no reason for having errors or defects in any product or service”, he wrote in his 1979 book Quality is Free.
Quality, it turns out, is not to be taken for granted, even when one is the leader in the field. Mercedes faced this same recall issue in 2004-2005, when its suppliers cut corners on quality in response to Mercedes’ desire to pump up corporate profits. Its recall was 1.3 million cars, costing $600 million. You may recall seeing a photo in Ch.6 of our book’s 9th ed. of an E -Class Mercedes setting itself on fire in Tokyo.
Companies that take their eye off the quality ball find that “quality is not free”, and that it may take several years to rebuild a reputation.
Discussion questions:
1.What was Toyota’s initial response to the “floor mat problem” (which it claimed caused the accelerator to stick)?
2.What is Toyota doing today to deal with customer complaints?
3. Name some other recent major recalls of cunsumer items. How were they handled?
For all of Toyota’s quality problems and world-wide headlines illustrating the problems, I see that they are back as the number 1 selling vehicle in the U.S. There is a Toyota commercial running now touting that they invest a million dollars every hour to improve technology and safety in plants and vehicles. Some question whether this is a truthful commercial. You may wish to read a response to this question written by the automotive editor of the Orlando Sentinel (newspaper), Steve Cole Smith. LINK: http://www.philly.com/philly/classifieds/cars/QA_Is_Toyota_really_spending_1_million_per_hour_on_safety.html
Professor Render’s comment on Toyota quality may need some deep thinking. He writes, “Companies that take their eye off the quality ball find that “quality is not free”, and that it may take several years to rebuild a reputation.”
I certainly agree that rebuilding a lost quality reputation is very difficult. The old addage that “perception is reality” certainly applies here.
I am concerned with the “quality is not free” suggestion as this gets to one of the key priciples of Philip Crosby. Crosby tells us that the balance of costs (prevention, appraisal, internal and external failure costs) will–over time–lead to profits, that is, “Quality is Free.” I certainly subscribe to Crosby’s counsel: “It is much less expensive to prevent errors than to rework, scrap, or service them.”
As students of quality I think we need to remember that anything that is caused may be prevented. If we prevent defects at the source of work, costs will go down, quality will go up, and the marketplace has the opportunity to reward us with a reputation for quality and dollars spend on our products and services.
I liked Jim Gilbert’s comments about Toyota. But as I was reading today’s New York Times (Oct.22,2010,page B3), I see that the quality problems continue. The firm just announced a another 1.53 million car recall because of brake and fuel pump problems. Packaging the recall as well as possible, Toyota stated “Every time we announce a recall, that is a step toward increasing quality”. Toyota is still racing to fix cars affected by its gas pedal and floor mat recall, with 3.5 million out of 6 million vehicles that were affected repaired as of this date.