The Supply Chain From Japan To Rwanda For Toyota

Dr. Reid E. Whitlock Rector

MBA Intake 6 16 March 2012

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Toyota Global brand with global reach reputation?

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Most production Is Centralized Parts feed into Japan

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Two-way Transport Parts flowing to Japan cars moving the other way

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Steps In Auto Manufacture and Distribution Assembly and design are closely-held

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Review: Coltan Coltan in Rwanda

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Toyota Production Assembly

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Toyota production Human and Robot

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The Finished Product Ready to leave the factory

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Toyotas At Port Ready for shipment

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Arrival in Rwanda Pickup

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Arrival in Rwanda FJ Cruiser

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Arrival in Rwanda Land Cruiser

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In Use In Rwanda Land Cruiser

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Toyota Supply Chain The planet to Japan to Rwanda

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Automobile Recall The manufacturers worst nightmare

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Automobile Recall It happens to even the best firms

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Manufacturer Views About Announcing A Recall Challenge on several levels

Wolf Hesitate be sure vs. cover-up Good guy becomes bad guy

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Automobile Recall The manufacturers worst nightmare

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Warranties How does a warranty work?

Wh pays? Who ? Who knows? Who listens? Who is liable? Wh does the work? Who d th k?

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Secret Warranties Little known. Little discussed.

1. Service advisories are posted on an automaker's internal computer network. They offer troubleshooting tips and allow the dealer to t bill th manufacturer f th repair. Thi the f t for the i This information is never divulged to the customer.

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Secret Warranties Little known. Little discussed.

2. If the defect grows into a more involved solution requiring upgraded parts, automakers then draw up a formal technical service bulletin (TSB) and distribute the bulletin to dealers and government agencies. The service bulletin is t i Th i b ll ti i only issued after the manufacturer has what it thinks is the solution for the defect. defect

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Secret Warranties Little known. Little discussed (continued)

3. As more & more customers hear about TSBs, and find that their base warranties are inadequate to deal with the scope of the problem, pressure on dealers builds. With customers pressing for after warranty help, the after-warranty dealers put pressure on the manufacturer. This can lead to a second TSB, sent only to dealers, extending the warranty coverage and leaving to the dealer's discretion the amount that will be covered or refunded to the customer. d f d d t th t
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Secret Warranties Little known. Little discussed (continued)

4. In some cases, the aggravation gets too great and the automaker decides to issue a press release followed by an owner notification letter (sent to first owners only, at their last known address) which clearly spells out what all owners will get and which vehicles are involved. A special bulletin or letter is also sent to dealers to ensure they follow the guidelines

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Automobile Recall & Customer Satisfaction Are they related?

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Automobile Recall & Customer Satisfaction Are they related?

Have

consumers come to accept recalls as a normal part of car ownership.(like software patches?) t f hi (lik ft t h ?) Are customers who have experienced a recall significantly less satisfied with their car than those who have not? Loyalty after a recall?

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Customer Behavior After A Recall Hostile or appreciative?

Fear

Relief ? Cooperation?

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Trade-Offs Safety versus Cost

Recalls are expensive and aggravating for all concerned car makers, car owners, th i car i k their insurance as a result lt of any accidents and the dealerships that have to face the problem firsthand.

Recalls are not issued lightly, but neither the government nor the auto companies want people getting hurt because of something that could have been fixed

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Biggest Recall Ford

The

biggest recall in auto history started in early 2008 with F d recall of 12 million vehicles f f l cruise i h Fords ll f illi hi l for faulty i control switches that could catch fire. The cost to Ford, to the government, to consumers was in the billions of dollars, and the repercussions are still being felt.

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Toyotas Biggest Recall 2009-10

MILLION VEHICLES

Toyota initiated. If suspicions proved correct the problem was in software or the electrical system system. From April 2010 an investigation lasted ten months. The investigation concluded that the problems were not electrical. Any damage to reputation?
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Toyotas Biggest Recall Aftermath

U.S.

sales dropped 16% in January 2010

Th company's stock surrendered $21 billion of value i The ' t k d d billi f l in a single week. The U.S. Department of Transportation (DOT) threatened the company with fines for being slow to react to th t the problems. bl

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Toyotas Change of Strategy Cautionary Tale Tortoise became a hare

Over decades, Toyota built its reputation and market share i tiny i h in i increments b way of i renowned by f its d continuous-improvement method. Quality was always first , because it led EVENTUALLY to lower costs, which would lead to higher market share.

In the 1990s, Toyota set out to become the world's top auto company. Being the best and being the biggest created a tension that Toyota couldn't resolve.

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You Are Toyota What do you do in your supply chain???

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Thank Th k you for your attention! f tt ti !

Dr. Dr Reid E. Whitlock E Rector, SFB rector@sfb.ac.rw

MBA Intake 6 16 March 2012

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