What is wrong with Toyota

What is wrong with Toyota? Isn’t the Toyota Production System flawed, after everything the news has written in about the accidents resulting from unintended acceleration?

If one wants to make sense from the current crisis (or, even better, learn for the future), it is important to separate the hype from the facts. First, one should not confuse Toyota with the Toyota Production System. Toyota might have failed, but this says nothing about the Toyota Production System itself. If you see your doctor smoke, does this mean what he told you about lung cancer was not true?

Second, as operations experts, we have to look at the numbers. True, every life lost is tragic, and so the 50+ fatalities currently associated with unintended acceleration are not to be taken lightly. But, let’s keep in mind that:
(a) in the US 30,000 people die in car accidents every year (of which 5 to 10 per year were a result of unintended acceleration). This is less than 0.1%.
(b) the number of reported incidents has sky rocketed after the story was in the news, and many of the stories that now appear on television are highly questionable
(c) Experts estimate that every year, >50,000 people die in the US because of infections they acquired in the hospital (nosocomial infections). The main reason: doctors and nurses don’t wash their hands often enough.
Thus, it appears that if you are concerned about your life or the life of others, there might be better opportunities of making this country safer. And, as we explained in this blog before, hospitals are turning to the Toyota Production System as a way to improve patient safety.

Finally, it is helpful to contemplate the question “Why did Toyota not react to all of this?”. There are two reasons for this:
(a) Cars have become increasingly complex and the number of failure opportunities has grown dramatically, especially at the interface between electronics (modern gas pedals basically are like a computer mouse that translate mechanical movements into electronic signals)
(b) There are about 20 Million Toyotas on the road in the US. Everyone is correctly
accelerating some 10,000 times per year. We have about 2,000 defects (a conservative estimate).
So the probability of a defect is 2,000 : 10,000 * 20,000,000, which is a 1:100,000,000
Thus, one is more likely to win the lottery jack-pot than to observe a failure in a Toyota gas pedal, which makes it very hard for the Toyota employees to fix this type of problems.

So, is everything good? No. Toyota has been growing too quickly and their ratings in many of the global consumer satisfaction reports / defect reports have decreased (well before the current crisis).

For more insider details on the causes of the Toyota problems:

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2462

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