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What Really Happened At Toyota? Business Thought Leaders Segment

  • Broadcast in Business
Jon Hansen

Jon Hansen

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Could better intelligence have prevented the massive recall woes of the once revered Toyota Supply Chain? According to one industry analyst, “better analytics tools, including software-as-a-service products, could help Toyota and other companies crunch the numbers,” and thereby avoid the problems which led to a massive recall due to safety concerns with acceleration. There are of course many theories on what actually transpired with regard to the recent Toyota recall, as well as what could have prevented the accelerator problem from occurring in the first place. One of the most interesting was offered by Joe Barkai, practice director at marketing intelligence and advisory firm IDC. Specifically, Barkai’s suggestion that Toyota could have fallen victim to its own design in process in that they “may have been too efficient for the company’s own good.” Citing the similarity of design across its product line, in which the company uses the same parts and the same suppliers, Barkai pointed out the fact that a single part failure has the potential to have a broader impact across all models. The fact that even a minor parts-related issue could easily affect millions of cars at once brings to mind the proverbial rhyme “For Want of a Nail” which illustrates that small actions can result in large consequences. For Toyota, this then may actually be a case of deja vu. Referencing a July 20th, 2007 Wall Street Journal article titled “A Key Strategy of Japan’s Car Makers Backfires,” the shortage of a piston ring costing a mere $1.50 temporarily paralyzed 70 percent of Japan’s auto production for one week. Shouldn’t Toyota have learned something from this earlier experience? Joining me today to talk about Toyota is Six Sigma Lean expert author Forrest Breyfogle III, from whom we will learn more about the chain of events that led to the current problems, as well as what needs to be done to prevent a similar incident in the future.

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