Saving Too Much
Right now it is easy to take shots at Toyota. GM and Ford are taking pains not to, as they know what it feels like to be in the spotlight. But that doesn't mean that we can't have a look at what went wrong at Toyota. Now, we can point, look at the facts, and, realize that we aren't getting the whole story. Here's the story we're getting from BusinessWeek: Jim Press warned the Toyota brass in Japan in 2006 that there were quality issues with Toyota autos (Ohnsman, 34). Earlier, the company president "boasted of saving $10 billion in the previous six years by reducing operating costs (Ohnsman, 34)." Now, so you know, we have a Toyota. We like it for all sorts of reasons. And, so you know, I have stood back and tried to decide if I would recommend that we buy another Toyota. If you listen to the ads of satisfied new customers, Toyota is hoping that my decision - and lots of other folks' decision - will be to buy another Toyota. I guess the way I'll look at it is to try to figure, with all the problems we're hearing about, the Toyota I might want to buy someday is as good as or better than other autos on the market. That's how I'll make up my mind.
There are issues that apply to a well-run company that we all have to recognize. Continual focus on the bottom-line can ultimately have serious implications. Continuous improvement has to focus on improvement, not continuous cost-cutting. There is a difference. Sometimes it is hard to ascertain. The step that is missing is to realize the difference and act upon it. Just following along and removing every iota of quality to save money isn't what continuous improvement is all about. Reducing production time saves money. Reducing the number of parts in an auto, done correctly, can save money. Saving money is good. Ultimately, folks will notice if the quality isn't there. Toyota has gotten caught in a spiral. With effort they'll do fine. The real benefit is to notice what happened and make sure it doesn't happen to your company.
Reference
Ohnsman, Alan, Jeff Green and Kae Inoue. The Humbling of Toyota. Bloomberg Businessweek. 22 & 29 March 2010. 33. http://www.businessweek.com/magazine/content/10_12/b4171032583967.htm