Toyota in trouble

Last week Toyota announced their unprecedented worldwide recall of millions of cars. What does this mean? Is this a sign that the Toyota Production System does not function well after all? Should we be more critical of lean thinking?

I think that Toyota is indeed in trouble and suffers a fundamental problem in their quality system. This can also be deducted from the statements Toyota itself makes. Aiko Toyoda, grandson of the founder of Toyota and CEO since 2009, stated recently:

"Toyota is no longer a winner"

What happened? What can we learn from this? Recently Takeshi Uchiyamada, vice-president of Toyota and responsible for research and development recently, stated that Toyota has been:

"thinking of market share first and only then of the development of products"

Earlier, in October, Aiko Toyoda went even further in an interview. He stated:

"Toyota is a step away from capitulation to irrelevance or death. The company is grasping for salvation."

Until the end of the last century Toyota was known for the extraordinary way they were able to think from the customers point of view. Somewhere in the beginning of this century this has shifted towards becoming  the biggest car manufacturer in the world. In 2008 they achieved this (they sold more cars then any other car manufacturer), but now it seems at the expense of the quality system. A conclusion could be that the principles and instruments only work if your main focus is not market share or profit. They only work if you truly think from the point of view of the customer (or in healthcare from the point of view of the patient) en really focus on quality from a long term perspective.

As noted by John Shook, it' makes sense to distinguish between the Toyota Production System (TPS) and Toyota's production system. TPS are the principles and methods that Toyota developed over the years and until recently Toyota has been world class in applying them. Toyota's production system however has declined recently because of loosing the core values that made the company special. That does not make TPS less powerful, but it does mean that we should look differently towards current Toyota for inspiration.

The statements of Toyota give confidence that the top level acknowledges the extend of the problems and that they are already working on going back to the core values. If they manage to achieve this, it will certainly be interesting to study and learn from how they become world class again.