October 12, 2011
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Review by Russell Purcell
It has been a turbulent couple of years for the auto industry, but no company experienced more turmoil than Toyota. In August 2009, a report of a case of unintended sudden acceleration that led to a number of fatalities kicked off a firestorm of accusations and finger pointing directed towards the company, and for a time, these claims threatened to bring the Japanese industrial giant to its knees.
In their new book, Toyota Under Fire, authors Jeffrey K. Liker and Timothy N. Ogden provide the reader with a comprehensive study of Toyota’s rise to the top of the automotive industry, and the effect that both a worldwide recession and a growing oil crisis were having on the company’s operations and growth. Add to this a thorough examination of the recall scandal that put into question the brand’s reputation for quality, safety and reliability, and you have a book that will open your eyes to the many trials and tribulations that come with being regarded as Number One.
Jeff Liker stresses that “this book is not intended to be a defence of Toyota or investigative journalism.” Instead, the authors sought “to provide the materials that are relevant to understanding the crisis and what others can learn from it.”
The authors are quick to point out that many of the accusations against Toyota had little basis in fact. Many of the media reports were inaccurate, based on the opinions of “experts” with little expertise, or instigated by law firms looking for a big payday from one of the world’s largest industrial enterprises. These factors helped the Japanese industrial giant to quickly find its feet again and regain its market share, reputation for quality, and of course, profitability.
The relatively quick turn-around was also possible due to the “Toyota Way,” Toyota’s long-held approach to leadership and operational excellence based on both Japanese philosophy and culture. “The Toyota Way demands that any problem be thoroughly investigated before any conclusions are reached.” Each team member is expected to “continuously improve what is within their control.” As a teacher, I wish my students would embrace this concept and take it as their own mantra for life.
The company that began as a maker of innovative “mistake-proof” looms in the late 1800s had revolutionized manufacturing for the textile industry, and many of its long-held production and business practices helped the company rise to prominence in the automobile sector over the past half-century.
An evolution of Toyota’s cultural foundation – the master-apprentice internship – saw this relationship reformed to ensure that product quality and worker training were improved. The recall(s) gave the company and its personnel (at all levels) the opportunity to learn from the actions and decisions made during this period, as well as going forward, so that Toyota could improve as a whole.
The recession ignited the pursuit of economies of scale to keep costs down, eliminate waste and production, while the recall forced Toyota’s decision makers to recognize that the customer was the next step in the production process, not just an end user. As a result, the company has more respect for the needs and wants of its staff, and looks to them to continue to improve the company’s products.
Toyota took responsibility for the perceived design and safety issues, and now puts its customers first when making both engineering and manufacturing decisions, as well as at the sales and service level of contact.
If anything, Toyota has proven how resilient it can be when faced with hardships of massive scale. The company still managed to maintain its record of profitability and its status as the number one automaker in auto sales despite the floundering economy and the high costs associated with the recall.
Toyota Under Fire: Lessons for Turning Crisis into Opportunity
By Jeffrey K. Liker and Timothy N. Ogden
Suggested retail price: CAN$ 23.95
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