UNIVERSITI UTARA MALAYSIA

COLLEGE OF BUSINESS

BJTP 3013

RESEARCH METHOD FOR OPERATIONS MANAGEMENT

GROUP A

GROUP ASSIGNMENT

TOYOTA RECALL’S PROBLEM

LECTURER: DR. RUSLAN BIN ROMLI

HENG HUI PING 197037

NG MEI YI 197857

SUMMIT DATE: 4/10/2011

1.0 Introduction / Background

1.1 Toyota

Toyota Motor commonly known simply as Toyota and abbreviated as TMC. It is a

multinational automaker headquartered in Toyota, Aichi, Japan. In 2009, Toyota

Motor Corporation employed 71, 116 people worldwide (total Toyota 320, 808).

TMC is the world's largest automobile manufacturer by sales and production.

The company was founded by Kiichiro Toyoda in 1937 as a spinoff from

his father's company Toyota Industries to create automobiles. Three years earlier, in

1934, while still a department of Toyota Industries, it created its first product, the

Type A engine and in 1936, its first passenger car, the Toyota AA. Toyota Motor

Corporation group companies are Toyota (including the Scion brand), Lexus,

Daihatsu and Hino Motors, along with several “on-automotive” companies. TMC is

part of the Toyota Group, one of the largest conglomerates in the world.

Toyota Motor Corporation is headquartered in Toyota City, Aichi and in

Tokyo. In addition to manufacturing automobiles, Toyota provides financial

services through its Toyota Financial Services division and also builds robots.

In May 2009, Toyota announced a record yearly net loss of £2.9 billion for

the previous year as a consequence of the global downturn in vehicle sales caused

by the 2007 until 2009 financial cries and the company predicted it would lose £3.7

billion in the current financial year.

Most recent the Toyota brand has suffered due to the company announcing

the recall of the vehicles across its main markets namely China, Europe and the

United States. Toyota’s brand image of creating reliable and efficient cars is under

threat due to accelerator pedals getting caught on floor mats. Toyota is recalling

over 1.1 million cars and had to suspend sales of eight models.

1.2 Problem Statement

(a) Sudden Unintended Acceleration (SUA) investigated that the problem was caused

in front of a mechanic. These causes led to a bad performance. There’s some design flaw

in the entire concept of electronic throttle control. Some are questioning whether

electromagnetic interference from devices like cell phones could be contributing to the

acceleration problems.

“Our investigation indicates that there is a possibility that certain accelerator

pedal mechanisms may, in rare instances, mechanically stick in a partially

depressed position or return slowly to the idle position,” said Irv Miller, a group

vice president of Toyota Motors Sales U.S.A.

Figure 1.2 (a) Toyota Motor Corp. said it will recall 3.8 million vehicles in the

United States, the company's largest-ever U.S. recall, to address problems with a

removable floor mat that could cause accelerators to get stuck and lead to a crash.

(b) Supply chain is strongly affect these problem occur. The reality is that auto

companies make hardly any of their parts.  They assemble cars from parts made by

others.  In this case, the offending gas pedal assembly was made for Toyota by a

company called CTS of Elkhart, Indiana.

It’s far from certain how much blame the parts supplier deserves.  In fact, CTS

says Toyota’s acceleration problems date back to 1999, years before CTS began

supplying parts to Toyota. The replacement gas pedal parts Toyota has announced as a

fix for the problem will be made by CTS, suggesting a degree of confidence in the

supplier.

Nonetheless, if you are outsourcing for your entire vehicle line, [and] the

outsourced component is defective, the recall and the embarrassment are much greater,

iconic car company critic Ralph Nader told Toronto’s Globe and Mail last week. “The

overall message is that quality control [means] daily vigilance,” Nader said. “You can't

coast on your reputation because it can fail very quickly.”

Supply chain monitoring is a critical factor for companies that rely on third-party

suppliers. That’s increasingly true for a broad variety of industries, not just automobiles,

as business grows ever more global.  Smart companies will know their suppliers and their

respective strengths and weaknesses.

1.3 Research Question

(a) Are poor designs or mechanisms of Toyota’s system brings effect on reputation

and accident? Is emerging from the recession and had already suffered from a resultant

decrease in sales?

(b) Is supply chain giving highly impact on production’s performance?

1.4 Research Objective

(a) After occurring the problem of mechanism, Toyota’s engineers have developed

and rigorously tested a solution that is both effective and simple. A precision-cut steel

reinforcement bar will be installed into the accelerator pedal assembly, thereby

eliminating the excess friction that has caused pedals

to stick in rare instances.

Engineers have cooked up “a precision-cut steel reinforcement bar” that will fix

the sticking gas pedal problem that forced the company to suspend sales of a bevy of

popular vehicles.

In a statement, Toyota said it has “developed and rigorously tested a solution that

involves reinforcing the pedal assembly in a manner that eliminates the excess friction

that has caused the pedals to stick in rare instances.”

Besides that, The Toyota computers must record an error code and they must not

activate the "fail safe" system designed to shut down the power and put the car in the

"limp home" mode. Design changes to address sudden acceleration have focused until

now on placing the accelerator pedal farther to the right relative to the steering wheel, so

that drivers are less likely to depress it by mistake during an emergency.

(b) Supply chain brings big impact to a company’s production. In the case of recall

Toyota, the offending gas pedal assembly was made for Toyota by a company called CTS

of Elkhart, Indiana. In this accelerator pedal problem, we can obviously see that the effect

brings from supply is seriously affect the reputation of Toyota company.

With its reputation on the line, Toyota’s fix is fairly simple on the surface, but

now the company has to deploy the solution in the field. Toyota’s recall issue comes at

the intersection of numerous business issues ranging from tracking a global supply chain

to customer communications to managing partners.

One of the biggest lessons, First, choose your partners carefully, however difficult

a process that may be. Supply chain monitoring is a critical factor for companies that rely

on third-party suppliers.

At the very least, supplier executives say Toyota may be ready to reevaluate its

method of early involvement and close, long-term partnerships with individual suppliers,

as well as single-sourcing, in the wake of plans to modify or replace millions of faulty

accelerator pedals around the world.

Toyota's recent problems certainly underscore how certain elements of its

approach, designs across multiple product lines, and reducing the number of suppliers to

procure parts in greater scale can backfire when quality-control issues arise.

Life has changed to one degree or another for Toyota suppliers in the past year.

Production is down, Toyota has asked for price reductions and a new supplier quality

offensive is sure to emerge from within the company. The next crop of supplier surveys

that grade relations with the OEMs should be fascinating.

Reference

2009–2011 Toyota vehicle recalls. Retrieve 23 September, 2011. From

http://en.wikipedia.org/wiki/2009%E2%80%932011_Toyota_vehicle_recalls

The Solution for Sticking Accelerator Pedals. Retrieve 2 October, 2011. From

http://www.toyota.com/recall/pedal.html

Engineers come up with pedal fix. Retrieve 2 October, 2011. From

http://www.smartplanet.com/blog/smart-takes/toyota-recall-engineers-come-up-

with-pedal-fix/3746

Mechanism problem of Toyota. Retrieve 1 October, 2011. From

http://www.toyota-lawsuit.com/news/2011/06/02/faulty-steering-mechanism-

prompts-toyota-prius-recall/

Supply chain management and the crisis. Retrieve 1 October, 2011. From

http://www.just-auto.com/comment/supply-chain-management-and-the-crisis-at-

toyota_id102995.aspx