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Author Archives: cebrianpablo

A five-stage framework on “How the Mighty Fall”

…“Even so, a staged framework of how the mighty fall did emerge from the data. It’s not the definitive framework of corporate decline –companies clearly can fall without following this framework exactly (from factors like fraud, catastrophic bad luck, scandal, and so forth)—but it is an accurate description of the cases we studied for this effort…”

…”The model consists of five stages that proceed in sequence. Let me summarize the five stages here and then provide a more detailed description of each stage in the following pages.”

…“Stage 1: Hubris born of success. Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success (“We’re successful because we do these specific things”) replaces penetrating understanding and insight (“We’re successful because we understand why we do these specific things and under what conditions they would no longer work”), decline will follow…”

…“Stage 2: Undisciplined pursuit of more. Hubris from Stage 1 (“We’re so great, we can do anything”) leads right into Stage 2, the Undisciplined Pursuit of More—more scale, more growth, more acclaim, more of whatever those in power see as “success”. Companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence, or both. …”

…“Stage 3: Denial of risk and peril. As companies move into Stage 3, internal warning signs begin to mount, yet external results remain strong enough to “explain away” disturbing data or to suggest that the difficulties are “temporary” or “cyclic” or “not that bad”… In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility…”

…“Stage 4: Grasping for salvation. The cumulative peril and/or risks-gone-bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. The critical question is, How does its leadership respond? By lurching for a quick salvation… Those who grasp for salvation have fallen into Stage 4. Common “saviors” include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution … or any number of other silverbullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.”

…“Stage 5: Capitulation to irrelevance or death. The longer a company remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future … and in the most extreme cases, the enterprise simply dies outright”

Jim Collins (2009) HOW THE MIGHTY FALL and some companies never give in; Pp 19-23; Ed. The Random House Business Books; London; UK.

Check Jim Collins book page here. Buy the book from here.

 
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Posted by on January 20, 2011 in Management, Uncategorized

 

Toyota’s in house development

“SATOSHI OGISO was 32 in 1993 when he took on the task of building what Toyota, his employer, vaguely thought of as the car of the future. The deadline was the start of the 21st century. In America at that time car designers were sketching gas-guzzlers or sport-utility vehicles. But Mr Ogiso’s team, mostly in their early 30s, wanted to create something that would “do the Earth good”, as he puts it. Within two years they had come up with Toyota’s hybrid technology, in which a battery powers the car for short distances and a petrol engine kicks in at higher speeds, recharging the battery. Within four years they had their first Prius on the road.

Now there are 2m of them and Toyota has a prototype plug-in version that can be charged at home, like other electric vehicles, but has a petrol engine for long distances. In Toyota’s more distant vision, the home (built, of course, by Toyota’s housing division) will be solar-powered, which will cut emissions even further. And at night, when demand is low, the home may even be plugged into the hybrid car, which will have recharged its battery from the engine.

This is the kind of thing you would expect from Japanese manufacturing, with its focus on craftsmanship, or monozukuri. Mr Ogiso’s project exemplifies some of the strongest traits: teamwork, in-house development and a desire to earn glory for the company. What was different was the engineers’ ages. All young, they were given the freedom to follow their instincts, with no middle managers to second-guess them. “The senior engineers could not understand the hybrid engineering,” chuckles Mr Ogiso.

The tradition of in-house innovation runs deep in Japan, and some of the resulting products may help the country to adapt to an ageing society. Bill Hall at Synovate, a market-research company, reels off a list of new products that are already available, or will be soon: the Toto intelligent toilet that can detect the level of sugar in urine; Panasonic’s robotic bed that turns into a wheelchair; Toyota’s battery-powered individual three-wheeler, with built-in sensors to avoid collisions.”

The Economist Nov 18th 2010 | from PRINT EDITION Pp.10; Read full article here

 
 

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Good to Great (or why Good is the enemy of Great)

…“Here, then is an overview of the framework of concepts and a preview of what’s to come in the rest of the book…”

“Level 5 Leadership. We were surprised, shocked really, to discover the type of leadership required for turning a good company into a great one. Compared to high-profile leaders with big personalities who make headlines and become celebrities, the good-to-great leaders seem to have come from Mars. Self-effacing, quiet, reserved, even shy—these leaders are a paradoxical blend of personal humility and professional will. They are more like Lincoln and Socrates than Patton or Caesar.”

“First Who … Then What. We expected that good-to-great leaders would begin by setting a new vision and strategy. We found instead that they first got the right people on the bus, the wrong people off the bus, and the right people on the right seats—and then they figured out where to drive it. The old adage “People are your most important asset” turns out to be wrong. People are not your most important asset. The right people are.”

“Confront the Brutal Facts (Yet Never Lose Faith). We learned that a former prisoner of war had more to teach us about what it takes to find a path to greatness than most books on corporate strategy. Every good-to-great company embraced what we came to call the Stockdale Paradox: You must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, AND at the same time have the discipline to confront the brutal facts of your current reality, whatever they might be.”

The Hedgehog Concept (Simplicity within the Three Circles). To go from good to great requires transcending the curse of competence. Just because something is your core business—just because you’ve been doing it for years or perhaps even decades—does not necessarily mean you can be the best in the world at it. And if you cannot be the best in the world at your core business, then your core business absolutely cannot form the basis of a great company…”

A Culture of Discipline. All companies have a culture, some companies have discipline, but few companies have a culture of discipline. When you have disciplined people, you don’t need hierarchy. When you have disciplined thought, you don’t need bureaucracy. When you have disciplined action, you don’t need excessive controls. When you have disciplined action, you don’t need excessive controls. When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance”

Technology Accelerators. Good-to-great companies think differently about the role of technology. They never use technology as the primary means of igniting a transformation. Yet, paradoxically, they are pioneers in the application of carefully selected technologies. We learned that technology by itself is never a primary, root cause of either greatness or decline.”

Jim Collins (2001) Good to Great; Pp 12-14; Ed. The Random House Business Books; London; UK. Jim Collins Book Page here. Buy it from here.

 
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Posted by on January 4, 2011 in Management

 

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Yo, emprendedor

Mi objetivo con estas líneas es desmontar el mito exclusivista del emprendedor. Me resisto a las teorías de fórmulas mágicas de cómo emprender y a los argumentos que afirman que  “emprendedor se nace y no se hace”. Todos nacemos siendo emprendedores. Emprender es vivir. Todos, cuando empezamos a andar, elegimos nuestra carrera, cambiamos de trabajo, empezamos una nueva relación o decidimos hacer un máster, estamos de alguna manera emprendiendo. Si sabemos identificar y entender las razones que nos llevan a cambiar, a crecer o a crear, encontraremos los secretos que para cada uno de nosotros significa emprender. No escuches a los gurús del emprendimiento. Busca dentro de ti, encuentra la fuerza para hacerlo y lánzate; el camino de la aventura de emprender es el mejor maestro y tú eres el gurú.

Creo que son tres los elementos fundamentales de esta aventura personal de emprender. Tres elementos a los que todos tenemos acceso, y que con la necesaria dedicación uno puede dominar construyendo unos sólidos cimientos sobre los que emprender. Los tres elementos son la ambición, la creatividad y el miedo.

La ambición alberga nuestras ganas de cambiar y de crecer. Se asienta en una curiosidad intelectual que nos lleva a preguntarnos el por qué de las cosas y nos anima a cambiar lo que no nos gusta. La ambición sana es muy poderosa. Las ganas todo lo pueden. En la aventura de emprender te encontrarás seguro con muchas dificultades, y es importante tener el buen ánimo de quererlas superar. No se trata de saber si habrá o no problemas; los habrá seguro y es importante recordar qué te animó a hacer lo que quieres hacer, y, desde la fuerza de la motivación, enfrentarse a los infortunios.

Lo más importante que nos da la ambición es determinación y dirección. No hay buen viento para el que no sabe dónde va. Si sabes lo que quieres es fácil poner todas las fuerzas en ese objetivo. La ambición nos orienta y nos centra…

El segundo elemento fundamental de la aventura de emprender es la creatividad. La creatividad es una consecuencia derivada de la ambición: cuando quieres cambiar algo que no te gusta, cuando quieres conseguir algo que deseas, es necesario crear. Crear implica acción, y la acción es siempre buena… No es necesario ser el primero, pero sí lo es hacerlo de forma distinta y ser más eficiente, crear valor…

El tercer componente de la aventura de emprender es el miedo, la superación de los miedos para ser más exacto. El miedo es algo intrínseco al ser humano como especie biológica. El miedo nos protege y nos hace prudentes. De otra forma hubiésemos desaparecido devorados por leones o estrellados en precipicios. Sentir miedo nos alerta y nos pone en situación de defensa. Todo esto nos ha protegido durante decenas de miles de años y es una parte muy íntima de quienes somos.

El problema es que en los tiempos que vivimos, los acechos del entorno ya no necesitan del miedo que nos ha protegido en nuestra evolución: no hay leones que nos puedan atacar por la noche, ni fuegos de los que tengamos que salir corriendo. Nuestras vidas son más seguras, pero el miedo sigue presente en nuestro ADN como lo hacía hace 10.000 años. Es importante entender que este útil compañero de viaje es muchas veces un estorbo más que una ayuda en las dinámicas de la sociedad desarrollada del siglo XXI. Este miedo que nos protege y nos hace prudentes, también nos agarrota y nos inmoviliza; nos hace complacientes y cómodos; nos convence de no aventurarnos a emprender.

Es importante ser consciente de estos miedos; reconocerlos, identificarlos y separarlos  del proceso normal de razonamiento a la hora de tomar decisiones. Los miedos se disfrazan de convincentes razones que generalmente nos retienen en el inmovilismo.

En mi experiencia, la mejor forma de enfrentarse a la superación de los miedos es primero reconocer el miedo y segundo entender de qué está hacho: si es miedo al fracaso, miedo a la inseguridad económica, miedo a dejar el trabajo actual o miedo a liderar y tomar decisiones. El miedo es la parte más complicada de emprender porque es la que se disfraza, la que se esconde y encuentra mil razones para no cambiar.

La aventura de emprender es apasionante y todos deberíamos explorarla de alguna manera. Al margen de los suculentos beneficios económicos que se pueden derivar existe una tremenda recompensa de satisfacción y crecimiento personal. Se aprovecha mucho más la vida cuando los sueños se intentan, los miedos se vencen y se prueba la suerte.

Hernández, Bernardo. Desmontando el mito exclusivista del emprendedor in Consejos de inversores a iniciadores. Ed. Bubok Publishing S.L.  Spain 2010

 
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Posted by on May 16, 2010 in Uncategorized

 

The Beer Game as explained in Lean Thinking; How to promote flow

“The Beer Game or JIT Game is a simple exercise in which 5 people take roles in a four-stage production process folding and packing three colors of paper boxes. (See figure below)

Beer Game or JIT MIT game

The first person is asked to bundle up and deliver quantities of unfolded boxes in three colors to the two pre-assembly stations. The quantities are in response to a customer order. One pre-assembly station folds the large boxes while the other pre-assembly station folds the small boxes and both stations secure their boxes with a rubber band. The boxes are then passed ahead to the assembly station where the fourth player opens the large box and places the small box inside. The player writes out a ticket, folds it, places it on topof the small box, and then closes the large box and secures it with a rubber band. The box is then passed to quality control/dispatch where the fifth player opens the large box and checks to see that the ticket is present and properly written. This player signs and stamps the ticket before placing it back on top of the small box. The large box is then closed, secured with a rubber band, and delivered to the customer.

The players are told to work at their own pace to produce the three colors of box in response to the customer order. Soon every player is trying furiously to complete his tasks, first for one color of box, then for the next. However, a huge mountain of boxes quickly builds up in front of the fourth player, who has a bigger job than the others. In addition, the customer announces that he wants to change his order, to receive first whichever color of box the team has left till last. This quickly produces even more of a pile-up as the wrong color boxes are pushed to the side so the right color can get through.

The team of five is then asked what’s wrong and what could be done about it. The answer is always the same: “The fourth player is the bottleneck so we need to add another worker to the assembly step and build a storage area between steps two and three”.

The game coordinator then suggests that instead the five players should try a pull system by making only five boxes at a time and only when asked (pulled) by the next player downstream. To the player’s amazement, the whole activity proceeds smoothly, with oly a tiny buildup of boxes between steps two and three. They then play two more rounds, reducing the lot size to three and then to one, eventually achieving perfectly smooth flow and no buildup of boxes at all.

Next the game coordinator says the customer is going to vary his orders at random between the three colors of boxes and asks what will happen. The supplier executives recognize this situation as the key headache in their lives and predict chaos. But, of course, with no boxes piled up in inventory, it’s a simple matter to switch from one color to the next.

As the supplier’s managers are scratching their heads, the team moves from games to reality by suggesting that the exact same techniques should be introduced in the shop floor activities.”

Womack, James P. and Jones, Daniel T. Lean Thinking. Banish waste and create wealth in your corporation. Pp 208-209. Ed Simon & Schuster UK, Ltd. 2003. London, UK.

More resources on the beer game:

The Beer Distribution Game:    http://www.beergame.lim.ethz.ch/

The BeerGame Portal:    http://www.beergame.org

 

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Yes, #HootSuite is working now. I will t

Yes, #HootSuite is working now. I will try not to manage my social media from here until the lads from #GoogleWave make some integration

 
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Posted by on April 16, 2010 in Uncategorized

 

Lean programming (the fridge vs the radiator)

Lean programming (the fridge vs the radiator) – Jason Yip

by ignitesydney on February 23, 2010
 
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Posted by on March 20, 2010 in Lean Manufacturing

 

This post is for Kike, my faithful university class mate

[Today] the challenges that so many companies are making are more than a response to “globalization”. They denote nothing less than the obsolence of the corporate model many of us have grown up with. For some pople it won’t be easy to let go of old concepts, old hierarchies, old sources of power-but it’s mandatory to think anew.

-Vernon R. Loucks, Jr. Chairman and CEO

Baxter International, in Review, 1990.

Taylorism and Professional Education.

“Objective observers are becoming increasingly aware of the need to consider the manufacturing process as a whole rather than as an object for piecewise suboptimizaition. This holistic, or system viewpoint must include manufacturer’s relations with subcontractors and suppliers as well as customers… If manufacturing engineers and manufacturing operations managers are to contribute effectively to the redesign of the workplace, it seems obvious that their professional training must include a recognition of the new integrated manufacturing system reality and how to deal with it effectively…

The American manufacturing environment is now in a rapid state of change. Yet, our business schools and engineering schools have not yet begun to provide the leadership that this restructuring of the American manufacturing environment demands. Some observers believe that American manufacturing managers have been late coming to the party, that they have been slow to recognize the advantages of Japanese and, to a lesser degree, European developments… As I see the situation, American business leaders are now well in advance of engineering and business schools in recognizing and practicing total quality principles, participative management, worker empowerment, and the like. If this perception is correct, why is it so? My answer will be that American professional school faculties have not abandoned Taylorism.”

Taylorism

Frederick Winston Taylor is high in the pantheon of American engineering heroes (Copley, 1923). In his obsessive optimization of individual rigid separation of thinking from doing, Taylor is the paradigmatic manufacturing engineer. Taylor is important, not merely because he made revolutionary contributions to the manufacturing canon, but also because the general style he set became the universal paradigm for American engineering practice and for engineering education, and remains so even today.

I intend in this paper to focus on how the elements of Taylorism are applied in the workplace and in the engineering classroom and why this environment is no longer right for modern America. I hold that Taylorism continues to be a major obstacle in our path to manufacturing efficiency and that it must be replaced as the central element of our engineering educational philosophy as well.”

The essential elements of Taylorism

“What are the essential elements of “Tayloristic” engineering practice that currently inhibit technical progress? I suggest that the following seven are critical:

  1. Analytic bottom-up approach, where analytic here is used in the classical sense of “breaking into components parts or elements.”
  2. The absence of goal-definition phase in normal engineering design practice.
  3. Engineering practice in a vacuum, without regard to human factors.
  4. The hierarchical, nonprofessional style of current American engineering practice.
  5. The fantasy of “value-free design”.
  6. The traditional Taylor practice of separating thinking from doing
  7. Strong emphasis on individual reward for individual effort.

Analogous to Taylor’s procedure of breaking down the manufacturing process into elemental steps, the first step in the engineering design process is the careful division of the overall task into simple sub elements and assigning these parts to individuals or teams for detailed design. This is so simple and obvious, and it works so well in certain practical design tasks and in engineering design education, that we may fail to understand the deeper implications of this step.

But these are only a few of the more obvious implications of the analytic “bottom-up” Tayloristic approach to engineering. One other implication may be somewhat less obvious. The classically trained engineering “bottom-upper” accepts the goals of a project as given. Such engineering goals are embodied in the “specification sheet”. How could it be otherwise? The classically trained engineer may ask. How can one design or manufacture something without a specification sheet or a blueprint? This question may be perfectly logical when applied to a conventional, well understood object but irrational when we face the unknown. By insisting on a well developed and complete set of specifications before one can begin the design and production of a new and untried object, the engineer removes himself from the most exciting, creative step; helping to set the specifications in the first place. But this is exactly the way we currently tech engineers to think and to design.

In engineering education, the Tayloristic approach seems so obvious that it is universal. We begin with the simplest mechanisms and equations, then proceed step-by-step to more complex devices and mathematics, in a bottom-up manner. Thus, the budding engineer is taught without words to accept engineering reality as susceptible to decomposition into simpler sub-units best handled in isolation, a hierarchical management approach with professors as “bosses” who “think” and students as “workers” who “do,” and an absence of discussion of goals, except for questions that are meant to elicit what the boss wants.

If engineering educators inculcate reverence for inviolate specifications, as we continue to do, we are also implying that goals are external to the design process and are to be set by someone else. This absence of the goal-definition phase is the second major distinguishing feature of conventional Tayloristic engineering practice that is crippling our national attempt to regain manufacturing leadership in world markets.

The third crippling attribute is the engineering practice in a mechanistic vacuum, without regard to human factors. Human factors must enter into the design, production, use, and especially product retirement. Yet, none of these essential steps is considered currently in engineering education. Humans will use the objects we design and build, but we engineers easily divorce ourselves from responsibility to these human users if we can.

A fourth debilitating attribute of current American engineering practice is its hierarchical, nonprofessional attitude. Conventionally trained engineers accept that they do not have a say in setting specifications for the design object, or in how the product may be manufactured, or in providing graceful retirement from service. They accept that they are not professionals with an overarching professional responsibility to society for their work. They accept the fact that they are employees and thus should be told what to do. And we engineering educators seem to agree. For the mots part, we are not registered professional engineers, and we do not encourage our students to look upon themselves as professionals in training, with professional registration as the confirmation of professional status.

The fifth element in current American engineering practice that gives me concern may grow out of the dehumanizing attitude mentioned as number three above. It is the fantasy that engineers are engaged in value-free design. This can lead to the belief that designers and builders have no responsibility for the use to which our products are put.

One of the primary features of Taylorism is insistence on a rigid separation of thinking from doing. Taylor prohibited participation by production workers in the organization, planning and direction of the manufacturing process. Taylor required his workers to do exactly as they were told to do and no more. This authoritarian stance is carried over into engineering education through its rigid exclusion of students from participation in the planning, organization, and direction of the education process. We all learn by example, and this is one of those debilitating attitudes engineers learn without being conscious of it.

Individual reward for individual effort in the marketplace implies an emphasis on piecework, separate post production quality inspection, and a resistance to the team concept. For example, auto factory line foremen long waged war on any sort of worker interaction on the line. Even talking was forbidden in the early days, and this clash with the traditional American value of mutual support no doubt hastened unionization. IN engineering education, this attribute causes us currently to focus excessively on individual student performance and active discouragement of student team formation. As a result engineering graduates have little or no experience in team building or cooperative effort. Thus, when they do run into the need for team effort, many engineers exhibit resistance, discomfort, and clumsiness at interpersonal professional relationships. Engineers feel the “need” to know who is the boss and for a strong management structure. The “leaderless group” leaves them distinctly uncomfortable (Gibson, 1981). Engineering faculty members often carry this individualism even further. I have been present at a number of faculty promotion and tenure committee meetings at which it was seriously proposed to discount publications according to the number of authors on the paper. Under this concept a two author paper would find each author awarded half a publication, and so on. Unconscious Taylorism in engineer is, I believe, responsible for the sabotage of many participative management programs”

This text has been extracted from John E. Gibson (1992) Manufacturing Systems; foundations of world-class practice. Pp 149-157.  National Academy Press; Washinton, 1992.

 
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Posted by on February 25, 2010 in efficiency, Management, Manufacturing

 

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Market will decide on Toyota recall

The company’s proactive and unprecedented recall and sales halt, while expensive in the short term, may protect its image.

As in any good relationship, open communication is vital and Toyota Motor Corp., which recently suspended production and sales of eight models suspected of having sticky accelerator pedal problems, now has the perfect chance to show the world how healthy a relationship it has with its customers.

The recall and sales halt, which most industry observers agree was the right move, has generated different discussions about the company’s renowned quality expertise.

“Toyota has built this reputation on quality and reliability and safety and being a practical choice. When consumers start questioning that, it really can damage them in terms of reputation, especially when Hyundai, Ford, Honda, Subaru, and Nissan offer great choices and are coming up in quality ratings,” Jake Fisher, an automotive engineer for Consumer Reports, told Reuters.

floormat

However, Toyota could minimize the adverse effects of the recall and sales halt depending on how well the company communicates with its customers, according to Dave Sargent, vice president of the global automotive division at J.D. Power and Associates.

“We feel that Toyota is taking the right steps here,” says Sargent. “It is critical that they also focus on communications with customers and dealers. There appears to be some uncertainty right now. This is understandable, but Toyota needs to be as clear as possible around what consumers should do, what dealers should say to customers and potential customers, and (when they know) when sales and production will restart. This is obviously a hugely complex challenge. Action is critical, but clear communication is also important.”

As far as the impact on overall customer satisfaction of the Toyota brand is concerned, Sargent isn’t convinced Toyota will take that big a hit.

“Historically, vehicle recalls have minimal effect [as far as customer satisfaction ratings go] as only a very tiny percentage of owners actually experience the problem,” Sargent explains. “For the majority of owners, the most significant impact will be the inconvenience of taking their vehicle in to the dealer to be fixed. The high volume of recall work is also likely to affect other owners trying to get a dealer service appointment. The effect will be largely dependent on how well Toyota and the dealers manage this process. There may also be an indirect effect coming from some consumers’ residual concerns about the general reliability of their vehicle and potential effect on the resale value. Overall the impact is likely to be less profound than might be expected.”

floormat2

It’s still unclear what Toyota is going to do as a definite measure to fix the problem, but Sargent is certain that Toyota is not going to risk it’s highly valued reputation by releasing the affected vehicles before the problem has been clearly identified and fixed.

“The actions that Toyota have taken this week are clearly designed to fix the problem (and the perception of a problem) once and for all,” says Sargent. “It is highly unlikely that they will move forward without being completely satisfied that the problem is fixed. Their long-term reputation is more important to them than losing a few weeks of sales, however painful that is in the short term.”

Meanwhile, The National Automobile Dealers Association (NADA) is encouraging Toyota dealers to verify whether or not they have business interruption insurance that might help them endure this crisis.

“This is creating a very difficult situation for dealers, in an already tough market. NADA is working with Toyota to identify a plan to help get dealers through this,” the association said in a statement.

Last year, the Japanese automaker issued a recall of vehicles to reduce the risk of pedal entrapment by incorrect or out of place accessory floor mats, according to a company statement. Approximately 1.7 million Toyota Division vehicles are subject to both separate recall actions.

Toyota’s accelerator pedal recall and suspension of sales is confined to the following Toyota Division vehicles: 2009-2010 RAV4, 2009-2010 Corolla, 2009-2010 Matrix, 2005-2010 Avalon, Certain 2007-2010 Camry, 2010 Highlander, 2007-2010 Tundra, 2008-2010 Sequoia.

From Quality Digest

 
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Posted by on February 1, 2010 in Toyota

 

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Is it time for TPS II?

What the world’s biggest carmakers can learn from other corporate turnarounds.

“Less than two years ago Toyota swept past an ailing General Motors (GM) to become the world’s biggest carmaker. Now its newly installed boss, Akio Toyoda, the 53 year old grandson of the founder, says that the firm could be locked in a spiral of decline. Toyota is still a hugely formidable company, and some within the industry (and inside Toyota itself) believe that Mr Toyoda may be overstating the case. Yet there is no shortage of signs that all is not well.

Toyota’s story has implications beyond the motor industry, for it is not just a car company; it is the model for manufacturing excellence whose “lean” techniques have been copied by countless firms. How it slipped up –and how it may right itself –carries lessons for others.

Falling giants.

Althought some of its rivals, notably Volkswagen of Germany and Hyunday of South Korea, have come through the terrible past year relatively unscathed. Toyota’s market-share has either fallen or been flat in every region in which it operates except Japan—a market that was shrinking well before the crisis struck.

In America, its biggest and normally most profitable market, Toyota has been plagued by highly publicised recalls that have raised embarrassing questions about the safety of its vehicles. In China, India and Brazil, the big emerging markets that will provide nearly all the industry’s future growth, Toyota has been slow of the mark. Its lead in hybrid technology is under threat as other big carmakers scramble to bring low –and zero –emission vehicles to market before low –carbon legislation bites. Astonishingly, in the first three months of 2009 it made an even bigger loss than GM, which was then on the verge of bankruptcy. Underlying all these problems is an uncomfortable truth: Toyota’s rivals have now caught up. They now offer cars that are just as reliable but far more exciting than the rather dull vehicles Toyota has concentrated on producing in ever –larger numbers.

A bit of vroom needed.

Toyota can also learn from the woes of other carmakers. A decade ago Ford thought it had found a saviour in the dynamic Jac Nasser, who declared his intention to transform the firm from an old –economy carmaker into a nimble, internet-savvy, consumer powerhouse that managed brands and sold services. He also went on a wild acquisition spree, paying huge sums for Volvo and Land Rover. Unfortunately, amid Mr Nasser’s cultural revolution, Ford lost sight of its main purpose: building decent vehicles as efficiently and profitably as possible. That is what Ford is reaping the rewards for doing now, under the less exciting but steadier leadership of Alan Mulally.

Toyota, too, has a good chance of putting things right. It is no GM, which had far deeper structural problems before it used bankruptcy to off-load some of them. It has a boss who understands what has gone wrong –namely, that it has jeopardized its formerly stellar reputation for quality by pursuing volume at all costs and by failing to put the needs of its customers first. It has started to sort out some of its problems. Quality and reliability are getting back up to the mark. Now it needs to make more exciting and innovative cars.

Mr Toyoda’s approach is not visionary. It is simple, incremental and requires painstaking attention to what the customers want. That is its virtue.”

Extracted from: The Economist December 12th-18th 2009. Pp 69-71. The Economist Print Edition

 
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Posted by on December 16, 2009 in Lean Manufacturing, Toyota

 

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