Business Research on Toyota

This article discusses the organizational processes of Toyota during the accelerator crisis and the importance of addressing the supply chain. It also provides recommendations for improving supply chain monitoring.

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Business Research on Toyota
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1. 1st organizational process of Toyota
In 2009 the company was going through the crisis period caused by the accelerator issue
in the Toyota vehicles. The accelerator pedals of the Toyota cars started getting stuck
mysteriously and consequently many cars crashed tragically. The first organizational process at
the time of accelerator crisis is “creating unmanageable risk by aggressive growth”. It has been
noted that the crisis was not the result of a single day. Since 2005, Toyota started recalling more
cars than it sold. Gradually it went out of the quality control due to the desire to supplant General
Motors as topmost car –maker of the world. The aggressive growth Toyota was running after
was to win over the market rivals like Hyundai, Ford, BMW, Maruti Suzuki and others. The
growth process was considered to rise Toyota to become the leading car companies across the
globe. The parties involved in this process are investor, customers, the employees and
communities. It is assumed that if the board of directors of Toyota had exercised proper diligence
while accepting the aggressive growth plan of the management, growth could be achieved
without such franchise affectations.
2nd organizational process of Toyota
The second organizational process at the time of acceleration crisis in Toyota was having
a weak supply chain. The auto companies usually do not make their own parts. They just
assemble the parts of the car made by others. In this case, the gas pedal was delivered to Toyota
being manufactured by a company called CTS, Elkhardt, Indiana. However, the blame cannot
entirely be put on the suppliers as it has been found that the acceleration issues were there since
the year 1999. The importance of vehicle parts is unquestionable. Without parts Toyota cannot
manufacture cars. The parties involved in the process are mainly the suppliers of the parts as well

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as the riders who could be in danger due to defected auto parts. It is wondered, had the company
retained strict monitoring of the supply chain.
3rd Organizational process of Toyota
The third organizational process at the time of accelerator crisis was lean manufacturing.
The production system of Toyota is a living example of lean manufacturing. However, the
system is tailored to Toyota only and cannot be copied by other brands. The recall issues of
Toyota regarding the unintended acceleration had put the continuity of the famous TPS system
on stake. However, they did not disqualify their TPS but displayed a sign of TPS revival. What
Toyota did is it returned to the roots by reflecting deeply on self, listening to the customers’
voice and making the products increasingly better. They also generated the strategy to stop, think
and then make improvements.
In the due course of struggling to adjust with the rapidly increasing growth and
globalization with complexity, Toyota lost its way for sometimes. The goal of the lean
manufacturing is delivering the products timely and with fulfilling the needs of the customers
optimally. Since the customers want high quality products always, that too at lower costs, the
application of the improvement methods like Six Sigma, TPM, QRM, Lean will lead to the
reduction in defective products. A recall is a kind of lean terminology or a type of rework on the
existing products that must have been produced right the first time.
2.The Supply Chain of Toyota requires to be addressed because due to lack of proper
monitoring, the crisis of unintended accelerations most probably occurred. A regular follow up
of the supply chain of a company helps to increase customer satisfaction. It also reduces
inventory stock-outs, schedules the production effectively, lowers down the safety stock
requirements, decreases the product obsolescence costs and lastly improves on the pricing and

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promotion management. It is highly important for the Toyota company because the company is
solely dependent on the suppliers as it does not produce its own products.
The Toyota company can easily improve the monitoring of the supply chain by
increasing transparency, standardizing the imported parts, gaining data insight, generating real –
time inventory management, raising cost awareness and streamlining the accounting process.
The background and reputation of the suppliers have to be checked. The supplied materials have
to be individually assessed checked to maintain the quality standards.

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