Assignment:
Instructions
Create a 1 to 2 pages long for each of the four scenarios. References are mandatory. APA format is required.
1. Case: Quality Management-Toyota
Toyota-Under-the-Radar Recall Responses
After a bruising series of recalls in 2010, Toyota Motor Corp. has quietly implemented a number of new quality and safety-related reforms to its operations, even as it denies its vehicles are prone to defective parts or engineering flaws. Toyota admits that its number of recalls has increased but insists that it is because the company now tags vehicles even for issues that it had not previously considered problematic as part of its new effort to appease customers. It claims this improvement contrasts with its slow response in the past, which had hurt its reputation.
Executives admit they were lax in instituting companywide programs to police repairs at dealerships and didn't grasp how some car owners were driving their cars in potentially hazardous ways, such as using after-market floor mats piled up under the gas pedal. Company engineers never envisioned that kind of problem when they designed and produced cars, and mechanics at dealers didn't bother to report it up the chain of command.
"We had a top-down, bureaucratic system with lots of checklists that weren't taken seriously by regular employees because their hearts weren't in it," said Shinzo Kobuki, a Toyota senior managing director in charge of overseeing advanced research and safety. "Even with our suppliers, we rated their ability to meet strict scheduling deadlines ahead of their ability to meet strict quality and safety guidelines. Now the opposite is true."
Toru Sakuragi, chief executive of SC-Abeam Automotive Consulting, a Tokyo-based automotive research/consulting firm, says Toyota has been caught between a need to cut costs to overcome the strong yen and the need to improve quality to prevent recalls. "They are now pursuing both strategies, but they are essentially at odds with one another," said Mr. Sakuragi. It remains to be seen if Toyota's actions are sufficient to prevent a recurrence of the missteps that tarnished its image as it recalled some 10 million vehicles worldwide. Importantly, the company's soul searching has amounted to a mere slap on the wrist for its senior-most officials, in the form of a 20 percent pay cut for just three months summer 2010. And Toyota denies any culpability for structural defects or systematic cover-ups.
To some extent, the Japanese automaker was vindicated by the announcement by the U.S. National Highway Traffic Safety Board that many of the reported accidents involving Toyota models resulted not from gremlins in electronic control systems, but "pedal misapplication"-or driver error. Yet the company still faces hundreds of lawsuits stemming from unintended acceleration-related accidents, including some from seven major insurers who filed separate but identical complaints in Los Angeles County Superior Court blaming defects in Toyota vehicles for the crashes.
For its part, Toyota says it has found no defects or safety issues with new model cars that have undergone enhanced checks ahead of their debut to the marketplace. In the final stage of its recent Camry review, Toyota concentrated on fine-tuning things such as the level of vibration in the steering wheel to ease perceived quality gaps. These changes forced a delay in the car's debut by several weeks.
A recalled Toyota gas pedal is posed next to a recalled Toyota Avalon. Toyota issued the parts to fix sticky gas pedals, but the 4.2 million customers affected had to wait until technicians were trained.
New Initiatives
The Japanese automaker has launched, unannounced, several low-profile initiatives, including a global computer database to track vehicle repairs and cut reporting times about customer complaints from months to days. It also has extended deployment of rapid-response teams to determine the causes of accidents beyond the United States and Japan to other major markets, including China and Europe.
These initiatives include a multimillion-dollar, multilingual computer system staffed by a dedicated unit of 20 employees who compile repair reports from Toyota dealerships worldwide, along with complaints on the Internet and safety concern information gathered by governments; then they mine those data to spot trends. Known internally as TAQIC, or Toyota Advanced Quality Information Center, this system will be made accessible to most employees on an as-needed basis.
The company also has named a managing director to oversee all safety-related issues. This official works on the research and engineering side of the business but collaborates with a separate quality-focused task force. Another initiative involves the so-called Swift Market Analysis Response Teams, known as Smart, set up to troubleshoot in the United States. These are now being rolled out globally in markets such as Europe, India, Southeast Asia, and China at a total annual cost to Toyota of some five billion yen ($60.4 million). The teams are responsible for tracking down what company insiders dub "S-ketten," a hybrid of an abbreviation for the English word "safety" and the Japanese term for defects. While these troubleshooting squads are new to the United States and other markets, Toyota revealed that it has maintained similar teams in Japan for years as a result of Japanese regulators' demands for quarterly reports following recalls. Since United States authorities didn't require Toyota to isolate the root cause of problems leading to recalls like their Japanese counterparts, the Smart groups weren't deployed outside Japan.
Toyota says the renewed focus on quality and safety will form an early-warning system of sorts to get a handle on potential problems before they can snowball. Toyota assigned 1,000 engineers to spot-check quality, setting up troubleshooting teams in the United States and adding at least four weeks to its new-car development schedules. It also has lowered its bar for requiring recalls.
At a new Toyota group factory opened in northern Japan to export its Yaris subcompacts to the United States and the Middle East, the company stressed its commitment to the highest levels of quality and safety. "We are at ground zero in the sense [that] the things we make here go directly to the customers, so we have a responsibility to get it right from the earliest stage of the manufacturing process," said Atsushi Niimi, executive vice president in charge of production engineering. However, Toyota has not instituted drastic changes to its assembly lines as a result of the recall, even at the new plant in Miyagi, which replaces an older factory in Sagamihara outside Tokyo. "We haven't done anything radically different in terms of quality checks," said Kenji Kinoshita, an assembly-line production engineer at Miyagi who was seconded from Kanto Auto Works Ltd. "We're just doing our normal everyday work to improve things little by little."
Questions
• Evaluate the statement in the case made by Toru Sakuragi that "... Toyota has been caught between a need to cut costs to overcome the strong yen and the need to improve quality to prevent recalls," and that "[t]hey are now pursuing both strategies, but they are essentially at odds with one another." Is this a realistic strategy? Do you have suggestions for how the strategy might be improved?
• Suggest improvements that you feel could be made to Toyota's quality program. Also, what might Toyota do to improve its image to the consumer relative to quality?
2. Case: Pro Fishing Boats-A Value Stream Mapping Exercise
A fishing boat manufacturer, Pro Fishing Boats, is having many problems with critical globally sourced parts. Pro Fishing has two manufacturing facilities in the United States. The firm's reliance on efficient global supply chain operations is increasing as the manufacturer is sourcing more and more parts overseas, including critical components. Recent problems with a number of these critical parts have caused line shutdowns. In response, Pro Fishing has mandated a six-week inventory on all globally sourced parts. Management has asked you to evaluate whether this is the right decision.
First, you must understand Pro Fishing's supply chain. Currently, there is very little visibility (knowledge of the current status) of inventory in the supply chain, and communication with the supply base is minimal. In fact, the boat manufacturer does not have any visibility past the Tier I suppliers. Adding to the complexity of this problem, each part of the supply chain is handled by different departments within the company.
In order to understand the supply chain, Pro Fishing has asked you to map its supply chain. To do so, it has identified a critical component to follow in the supply chain. After having the opportunity to interview supply chain participants, including suppliers, you have collected the following information.
The component is manufactured overseas in China by the Tier I supplier, Manufacturing Inc. The Manufacturing Inc. production schedule is based on orders sent via fax from the Pro Fishing warehouse. It operates on a 90-60-30 day forecast along with a weekly order. Upon completion of the component, Manufacturing Inc. sends the component via truck to the Shanghai Port, where it is loaded onto a ship heading to the United States. Loading at the port takes 1 week, and truck transport takes 3 days. Manufacturing Inc. holds a 9-week finished goods buffer inventory. Manufacturing time for each component is only about 3 days. The ship bound to the United States takes about 14 days to travel overseas. Upon arrival in the United States the component is unloaded at the Los Angeles port. This takes about 5 days and customs inspects in Los Angeles. The goods travel by train to Chicago, which takes about 7 days. Goods are held in Chicago for about half a week. From there, the component is trucked to a Pro Fishing warehouse where the 6-week inventory buffer has been mandated. Shipment to the Pro Fishing warehouse takes 2 days. From the warehouse, the components are trucked to plants in the United States triggered by electronic orders from each of the Pro Fishing plants.
In talking to Manufacturing Inc., Pro Fishing has learned that its component is made up of two main raw materials: one from China and the other from the United States. Due to the risk of running out of these raw materials, Manufacturing Inc. maintains a 4-week buffer of the China-based raw materials and a 12-week buffer of the U.S.-based raw material. These Tier II supplier orders are by formal purchase order only. It is interesting to note that Manufacturing Inc. uses these suppliers due to Pro Fishing's strict supplier qualification requirements.
Question
• Create a value stream map (VSM) of this supply chain. What other information is needed?
• Where is there risk for supply chain disruptions or stoppages to the flow of materials?
3. Pappas has decided to open a new restaurant. They want to open two more stores in Maryland. Develop a list of important factors (choose 8 and you aren't limited to what is in the textbook) to consider in selecting the sites. Then based on your criteria, find the best 2 sites in Maryland. Make sure you do some research and support your thinking with facts.
4. Sometimes Walmart may need to purchase goods or services that are unique, very complex, and/or extremely expensive. These would not be routine purchases, but there may be a number of vendors that could supply what is needed. Do some research and discuss how Walmart selects their vendors here in the United States and Globally. What are their differences? What would you improve? Make sure you explain your thinking with facts and supporting details.