Toyota has been lined up for a maximum fine of $16.4 million by US regulators for failing to report a fault within the statutory time. In the scheme of things the fine is a flea bite for Toyota, but the impact on the hard earned brand reputation of the current quality issues will be substantial.
It is paradoxical that Toyota is being fined for a quality failure, as the impact of Toyota in the quality of the auto industry over the last 30 years has been immense, Toyota has led the “Lean” revolution in manufacturing, and has been remarkably open and prepared to assist all comers, especially competitors.
Years ago, the US quality guru, W. Edwards Deming who was the primary architect of the quality revolution in Japan after the war, noted that as companies focus on increasing market share and profitability in the short term, customer service and quality will suffer in the long term. It would appear that this is what has happened to Toyota. As they consolidated as the largest auto manufacturer in the world, demand for their cars and light commercials outstripped supply, simply because of their superior quality and the way they met customer expectations in a range of areas. Under commercial pressure to meet demand, Toyotas increase in production capacity outran their increase in management capacity. I’m pretty sure that the fine will be an internal wake-up call, and the quality culture of Toyota will re-assert itself.
StrategyAudit 