Toyota (TM) moved from making most of its cars in Japan to opening plants all over the world as it marched to become the No.1 car company. The process took nearly two decades and there was an aspect of it that worried Toyota management.
In Japan, quality control was not an issue. Factories were with a few hundreds miles of the headquarters. Executives could go to sites to help train workers and impart the firm’s values for building vehicles were were nearly free of defaults.
As Toyota expanded it factory network along with sales, it ran into what should have been expected. Quality started to drop. Keeping a facility in South America operating using the same level of quality management that the firm could impose in Japan was impossible
Toyota began to slip in consumer satisfaction surveys and it began a series of large vehicle recalls cue to defects.
According to Reuters, Toyota recalled 1.3 million vehicles worldwide. The action will be embarrassing and costly. And, it comes with a dose of irony. Toyota will cut global production by 20% this year because the demand for cars is dropping in every major country.
Toyota now has the worst of both worlds–falling sales and quality problems from chasing sales which are no longer there.
Douglas A. McIntyre
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