...Toyota Recall: Five Critical Lessons Posted by Michael Connor • January 31, 2010 • Printer-friendly by Michael Connor Toyota’s announcement of a technical fix for its sticky gas pedals – which can lead to sudden acceleration problems - is not likely to bring a quick end to the company’s current recall nightmare. Having already halted sales and production of eight of its top-selling cars in the U.S. - and recalled more than 9 million cars worldwide, in two separate recalls – Toyota faces the prospect of billions of dollars in charges and operating losses. The Toyota brand, once almost synonymous with top quality, has taken a heavy hit. While all the facts are not yet in, it’s clear that Toyota’s crisis didn’t emerge full-blown overnight. Fixing the problem and ensuring that something like it doesn’t happen again will require an all-out effort, from assembly line to the boardroom. Even then, there are no guarantees. Maintaining a good corporate reputation in the 21st century is tricky business indeed. Toyota’s case offers a number of valuable lessons for other business people and companies to consider. Here, for starters, are five: Aggressive growth can create unmanageable risk. Toyota’s desire to supplant General Motors as the world’s number-one car-maker pushed it to the outer limits of quality control. “The evidence that Toyota was expanding too much and too quickly started surfacing a couple of years ago. Not on the company's bottom line, but on its car-quality ratings...
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...The Mattel and the Toy Recalls integrative case poses six questions (four from the case and two from the professor) which will be addressed in this analysis. 1. What went wrong with Mattel’s recall strategy? The strategy used by Mattel in the toy recall was focused on passing the blame to China’s work practices and materials used. Mattel prematurely placed disproportionate blame on Chinese manufacturers and appeared defensive and somewhat fearful. In addition, the toy manufacture delayed reporting to the CPSC by a month and a half after they found out that the toys contained lead paint, even though the CPSC guidelines state that a re-call should be issued in 24 hours. 2. Who are Mattel’s stakeholders, who did Mattel cater to in the recall? Mattel’s stakeholders are the parents buying the toys, the retailers, the employees, the shareholders, management, China, business partners, CPSC, the government and third party contractors. The recall catered to the shareholders thus putting the bottom line ahead of the customer safety. 3. What values did Mattel exhibit during the recall? How did it affect Mattel? By waiting over a month to make a potential toy hazard public, Mattel evaded the truth. Even though a little late, Mattel did work with the CPSC to launch an external media blitz to alert the customers. Also the CEO of the company Robert Eckert apologized to parents in a video posted on website and expressed Mattel's emphasis on family when he spoke to parents from his perspective...
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...companies primarily outsource manufacturing, labor-intensive jobs to companies located in developing countries at a lower cost. If quality level is maintained, outsourcing can be a great value-added strategy. Through outsourcing, companies can achieve flexibility and are able to focus on their main business. Outsourcing may also enable companies to have access to resources and technology, which may be not have been available locally. Furthermore, expertise in risk management, financial management, and other fields can be contracted through outsourcing. As far as Mattel is concerned, the key motivation for outsourcing is to have access to cheap labor, reducing manufacturing cost significantly. Causes of Mattel’s Recall Problem There are three main causes for Mattel’s toy recall: manufacturing problems which refers to the use of lead paint by Chinese manufacturers; design problem as a result of increasing use of small, powerful magnets that have the risk to be swallowed by children if detached, and; product misuse by young creative children which may cause potential danger to them. Among those three reasons, only manufacturing problems are potentially the result of outsourcing. The design and product misuse issues were not the responsibility of contract manufacturers. Outsourcing Pitfalls While outsourcing can reduce costs for companies, it can also give rise to a series of problems if those companies fail to see a clear picture of their outsourcing partners and fail to identify...
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...Question 1: From the case, the characteristics of the toy industry: 1. Seasonal Demand Demand for toys is usually correlated with festive celebrations in a country. One close example is Christmas day which falls in December annually. Coincide with this celebration, significant portion of the toy’s annual sales usually happen towards the end of the year especially in those countries that are dominated by those that celebrate Christmas. The impacts of the seasonal pattern towards the industry are critical as most manufacturers have to consider several factors that lead to sales. The huge demand at certain period of time requires thoughtful planning and smooth execution as minor mistakes can lead to loss of millions of sales value. Just imagine within short period of time toy manufacturers have to produce millions of toys. This requires good management of supplies and synchronization between supplies and production as to minimize costs and ensuring efficiency. Not to forget issues of quality management and lastly the impacts or magnitude of logistic management to the toy manufacturers. 2. Stiff Competition Basically the toy industry consists of many players. As stated in the case, there are 880 companies operated in the industry in 2002. This is 10% lesser than 1997. There are few Key players in the industry such as Mattel, Hasbro, RC2, JAAKS Pacific, Marvel and Lego. In term of sales only two companies managed to register USD1 billion marks, the company are,...
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...The Fight against Child Labor International Business Tamara Ramsey May 9, 2012 Abstract Child labor has recently become a very touchy subject throughout the world. Well known corporations and clothing and sporting goods distributors that have for decades been taking advantage of cheap labor in third world countries are seeing their names and images tarnished by allegations of child labor practices and obscene working conditions. Child labor is nothing new to the world. It has been a part of almost every society in recorded history. From ancient times, children have been a part of the economic survival of their families, particularly in industries like the farming and crafting industries. Child labor is meant to define unfair, abusive work whereas work is an important part of the sculpting of most children. There is no question in society that some forms of labor are acceptable and some are not. Children may work without being abused and in many countries and even some American cultures; it is both necessary and integral that children perform some laborious duties. The line between work and child labor is most commonly drawn where normal tasks are replaced with exploitative tasks and children are expected to do things that go well beyond the borders of inhumane. When you think about children, chances are you think of them getting up in the morning, going to school, then coming home and going outside to play. Sadly this isn't always the case. In many countries...
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...plagued by a variety of setbacks, including slumping sales, under-utilized assembly lines and multibillion-dollar losses. But perhaps most worrisome of all are signs that the company’s flaunted quality has been slipping. Long hailed as the industry benchmark, some key Toyota products have suffered quality snags in recent years regarding the overall safety of their vehicles. The auto media seems to believe that Toyota’s reputation is ruined. Consumers, though, are still under the impression that Toyota’s quality is tops when compared to all other automakers. Toyota had a rough 2009, to put it mildly. Toyota didn’t have a much better 2010 since the company announced a voluntary recall of 2.3 million vehicles to correct “sticking accelerator pedals.” Oddly enough, that new recall has...
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...Running head: Total Recall the firestone company recall of tires Total Recall The Firestone Company’s Recall of Tires Seth Jackson Current Trends in Electronic Management ABSTRACT This paper discusses the recall of Firestone Tires in the United States .and the relative complicity of Firestone, Ford Motor Company and its consumers. Because of Firestone’s knowledge of the tire defects and lack of action, fatal and critical accidents resulted from tires used on the Ford Explorer. Firestone chose, instead, to blame Ford and its consumers for the tires defects. INTRODUCTION In 1906, Henry Ford purchased 8,000 tires from Harvey Firestone, who began producing tires at a small factory in Akron, Ohio in 1900. The sale initiated a long, growing relationship between two eventual leaders in their respective industries. In a matter of just a few short months in 2000, a very robust business-to-business relationship, 100 years in the making, had been destroyed by a lack of communication, poor quality management, and the disregard of consumer concern were the rules surrounding ethics used in the ethical decision made from Ford or Firestone? How did the recall affect how everyone viewed and interpreted the entire tire manufactures? These are just a few of the questions we will discuss throughout this paper. Webster Online defines ethics as the discipline dealing with what is good and bad and with moral duty and what really stands out is the idea how one company...
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...The 2007 Mattel Toy Recall RESEARCH About Mattel Mattel, “the world’s premiere toy company,” began in Southern California in a garage workshop that manufactured picture frames. When the company started selling dollhouse furniture made from picture frame scraps, they realized the market potential and decided switch to toy manufacturing. In 1959, Mattel created their most popular toy, the Barbie doll. Inspired by paper dolls, Barbie was a three dimensional doll with which “little girls could play out their dreams.” Throughout the decades Mattel has continued to create and market popular toys, (Hot Wheels and He-man) merge with successful manufacturers, (Fisher Price and Tyco) partner with children’s program companies, (Disney, Sesame Street, and Nickelodeon) obtain licenses and rights to manufacture popular lines (Cabbage Patch Dolls and Harry Potter merchandise) and acquire other companies (Pleasant Company). Since its conception, the Mattel Company has done a lot to make sure it is considered a trustworthy company for children and the community. The corporation established a children’s charity, called the Mattel Children’s Foundation. In 1997 the company created the Global Manufacturing Principles, making them the first company to create a framework to ensure manufacturing would be conducted through consistent standards on a global level. In 1998 they started a $25 million multi-year donation to the UCLA children’s hospital, which is now called the Mattel Children’s...
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...Business Research Project: Part IV Darby Bess, Roslyn Mason, Jessica Hardin, Jennifer Steimle, Stephen Yeager QNT/561 December 3, 2013 James Krause The purpose of this research paper is to identify and correct causes of Toyota’s seat belt recall of 310,000 of its vehicles (Eisenstein, 2013). Seat belt failures contribute to loss of income as well as lives. If the issue is extrapolated to the economy, the loss of income and lives equate to a moderate yet significant portion of lost GDP. Thousands of people that contribute to the nations production essentially disappear effecting economic growth. Seat belt legislation is goverened by the states. Twenty-five states and the District of Columbia require seat belts for all passengers. All vehicles including buses are required to be fitted with what the Federal Motor Vehicle Safety Standards and Regulations (FMVSR) call a type 2 seat belt assembly consisting of a combination pelvic and upper torso restraint (Insurance Institute for Highway Safety, 2013). Currently, states are expanding their seat-belt laws to cover rear-seat occupants (Copeland, 2010). It is prudent for any organization to understand the mechanics, processes, and products they use or create. If a product or process fails, it is important the same institution initiates sound research to generate dependable data derived by professionally conducted practices that can be used reliably for decision...
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...GM Recalls GM has once again recalled vehicles, but this time for a different problem. 2.4 million vehicles have been recalled in four separate recalls. The first recall, deals with 1.3 million Buick Enclaves, Chevy Traverse, and GMC Arcadia from the 2009–14 model year (MY) and Saturn Outlooks from 2009–10 MY for a front safety belt problem were the belts can wear down and eventually break. Dealers were told to not sell new or used models of these cars until the problem was fixed. The second recall effected 1.1 million Chevy Malibu from 2004–08 MY and Pontiac G6 sedans from 2005–08 MY because a shift cable in the may wear out over time causing problems with the transmission. The third and fourth recalls were much smaller, with the third encompassing 1,402 Cadillac Escalades from the 2015 MY because a faulty weld could cause the partial deployment of the front passenger airbag in a crash. Owners were told not to have anyone sit in the passenger seat, and all sales of the vehicle have been stopped until the problem has been fixed. The final recall effects 58 Chevy Silverado HD and GMC Sierra HD 2015 MY pickups due to retention clips attached to the generator fuse blocks may come loose and cause a fire. Recalls from GM have risen 13.6 million vehicles since the February recall of 2.6 million cars for an ignition switch difficulty. The company has racked up $1.7 billion in repair costs for the vehicles it has recalled. This new set of recalls could affect GMs sales, among other...
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...Report 1 Grade: ……. The effect of organisation of visual material on subsequent recall Abstract Fifteen participants were tested in a repeated measures experiment. They were shown two sheets of visual images, one of which was organised into categories, while the other one was uncategorised. Recall was significantly higher in the categorised condition. This supports the view that organised materials can provides cues, even when they do not appear obvious. The study suggests that cues are also available for visual material, not just verbal material. Introduction Memory is a very complex and interesting area of psychology. It can take several different forms and is made up of a variety of different cognitive and social processes. As memory is a regularly occurring phenomenon which an individual will use every day, it is important to carry out research into the different aspects of memory to gain a better understanding of it and to be able to manage and control it. There has been a lot of interest in improving memory through organisation. Miller (1956) showed that one way of improving recall from short-term memory is by ‘chunking’ the information as it comes in. This is the process of breaking a large object, such as a phone number down into several smaller sections to make it easier to remember. There has been more work carried out into recall from long-term memory, where items have recently been presented and/or learned. Mandler (1967...
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...Transcript * 1. TOYOTA MOTOR MANUFACTURING INC. U.S.A Prepared By – Ashwin Mehta – 313 Pratik Mehta – 314 Ishaan Parekh – 315 Ankit shah – 317 Dishank Shah – 318 Fenil Shah - 319 * 2. Agenda Current Scenario Problems Faced Analysis Suggestions and recommendations Risks and contingencies * 3. Current Scenario • Toyota Motors Manufacturing (TMM) faces increasing problems with its seat supply. • Kentucky Framed Seat (KFS), is a single seat supplier for TMM. • KFS is responsible for the material flaws and missing parts as the major encountered defects. • These problems are increasingly occurring with an increase in varieties and demand for the seats. * 4. Problems Faced • Product proliferation problems with defective seats. • Company’s deviation from its normal production plan and lack of a recovery system. • Run ratio dropped from 95% to 85%. • This means 45 less cars were being produced per shift. • This translated in overtime of workers. • Too many cars needed off-line operations of one type or the another before they could go on shipping. * 5. Questions Raised • Will the sales company get cars on time as promised? • What does it mean to implement JIT and Jidoka principles to this situation? • Is TMM handling seat defects correctly on the line? • Is the current routine for handling seat-defect cars really a legitimate exception to TPS, or could it be a dangerous deviation from TPS? • Is there a way to kaizen TMM’s off-line routine? * 6. Analysis...
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...reasons of Toyota’s recall issues Lately, people most concerned about the recall event which happened on the world’s largest vehicle manufacturers, Toyota. This event affect all over the world including China, USA, Europe. The incident makes the corporate brand image dropped and also loss the consumer confidence. Why this event did occur? During the research and analysis, the major cause of Toyota’s recall is the quality issues. For example the accelerator pedal problem, many different types of car were recalled, like RAV4, Corolla and Venza and even some very good quality cars, like Lexus. In this case, from suppliers to the manufactures all have quality problems. 1.1 Suppliers Because pursue the maximum benefits and cost minimization, suppliers pay more attention on how to reduce cost. This lead to them neglects the raw materials quality. On the other hand, due to the Toyota over-confidence suppliers, the supplier changed the components’ design without permission. Some information pointed out that one of the Toyota suppliers called Chicago Telephone Supply Co. (CTS) changed the pedal design that is one of the reasons leading to the pedal problem. (Bernard Simon, 2010) 1.2 Manufactures They used the problem components to product without quality check and after the production they also did not do better quality check. They design also have some problems, they did not do enough test of their design before they produced. All these result the recall incident. This kind of...
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...1982 John Doe Business Society September 30, 2015 Abstract In this paper I talked about the Johnson and Johnson Tylenol case of 1832. I explained the case and defended Johnson and Johnson’s ethical decision. I learned that this case paved the way for companies to start recalling their products if there is something wrong with them. Tylenol crisis of 1982 Johnson and Johnson’s Tylenol product had become one of the most successful over the counter product in the United States. Then mysterious deaths all around the US were being linked to Tylenol. Johnson and Johnson was faced with the ethical decision whether or not they should have a recall on their product or not. Many companies have been put in the ethical decision of right and wrong before. Johnson and Johnson decided that the best decision they could make was to recall their product from the market. Even though this decision may have set Johnson and Johnson back in the short term, eventually they were able to come back even stronger in the long term. Johnson and Johnson’s Tylenol was cashing in 19 percent of its profits. Tylenol was becoming one of the most successful products ever. The fall of 1982 comes around and there are reports of deaths that doctors are relating to Tylenol. Many Tylenol bottles were reported tampered with. Somebody had replaced the pills in a Tylenol bottle with cyanide-laced capsules. These pills were killing people. These deaths put the pressure on Johnson and Johnson to fix what had...
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...Title Page Benedictine University 8/4/2014 Abstract The following text examines the recall of the drug Vioxx and the pharmaceutical industry’s responsibilities when it comes to ethical testing and distribution of consumer medicines. The role of the Federal Drug Administration is examined. The text also contemplates the actions that Merck, the maker of Vioxx, took during the product’s recall and how we can improve the current drug testing system to protect consumers. INTRODUCTION Merck, one of the biggest pharmaceutical companies in the world, created Vioxx, a once best-selling painkiller. In 2004, the company learned that its drug increased the risk of stroke and heart attack. After a few different studies, Merck finally gave in and recalled the product. The company had to face troubling questions and allegations that Vioxx had caused many deaths even though it wasn’t proven to be completely safe. Do you believe that Merck acted in a socially responsible and ethical manner with regard to Vioxx? Why or why not? In your answer, please address the company’s drug development and testing, marketing and advertising, relationships with government regulators and policy makers, and handling of the recall. I don’t think that Vioxx acted in a socially responsible and ethical manner with regard to Vioxx. Even before the drug was approved and released into the market, there was evidence that Vioxx wasn’t 100% safe. Dr. Alise Reicin, one of the scientists that worked for...
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