Daisy Escobar. Professor. IE Business School
29 April 2010
Toyota has been shaken to its very foundations by the mechanical faults detected in some of its models, but it has managed to react fast, with improvements that are reminiscent of its just-in-time breakthrough.
A company with faulty products is nothing new. Situations in which the fault affects its products en masse are not quite so common, but the business annals now contain several notorious cases, some of which have been solved more successfully than others.
The problem is therefore not a new one. The difference lies in that it is happening to Toyota, the company renowned for manufacturing fault-free products, that demonstrated the cost of ´no quality´ and that continuously works to eliminate any kind of wastefulness. Indeed, the concept of faulty product is what the company focuses on most in order to eliminate it from its plants. Toyota invented the famous poka-yokes, the alarms and controls that warn of errors so that they can be corrected before they become faults, in other words, before they are found by customers.
The mechanical problem affecting the accelerator pedals on some of its models and the brake pedals on others has struck the very heart of Toyota´s ideology: its commitment to quality. The company has not had long to wait to feel the effects of the problem: more than ten million cars recalled for a service; around two million dollars in costs (estimated figure); and a somewhat tarnished image as far as its customers are concerned.
However, Toyota has also shown more commitment to learning than any other company, with continuous improvement (Kaizen) and, above all, problem-solving. Consequently, it has taken decisions that will help it recover its customers´ trust. To eliminate the mechanical problem affecting the pedals, it plans to fit all its new cars with a new braking system that will stop the vehicle even if the accelerator gets stuck. And, to learn even more about its customers´ opinions, it is to create a special committee for global quality.
Akio Yoshida, the president of Toyota Motor Co., has expressed the need for a return to the basics of the just-in-time production system spirit. But if that spirit goes beyond the factories and spreads to activities with a customer focus, such as after-sales, customer service, i.e. the services the company provides, society as a whole will have learned from the experience.
Let´s welcome Toyota to the service economy. If once it turned the just-in-time concept into the modern paradigm of production, it now has a golden opportunity to turn the same concept into the paradigm of service. That would be the greatest legacy of its faulty pedals. Long live just-in-time!