The price tag for Toyota’s recent recall campaigns is estimated to be more than $2 Billion and the loss in share holder value is likely many times more than this. Yet we remain optimistic and anticipate that Toyota will make it through this crisis. We can only imagine what this kind of money could buy if wasn’t spent on repairing vehicles.
In our previous posts we differentiated between design and process failures. Today we learned of yet another Toyota recall issued yesterday. This time 8,000 0f the 2010 four-wheel drive Toyota Tacoma pickup trucks are being recalled for possible cracks in the front drive shaft. In this case the supplier, Dana Corporation, discovered a problem with their manufacturing process that may also have affected parts supplied to Nissan and Ford as well. Click here to read the full story.
We are reminded of the book titled “Quality is Free” written by the late Philip B. Crosby. Many manufacturers around the world have learned that the cost of failure knows no bounds. While it is possible to calculate the costs to repair defective products, the losses incurred due to lost sales, law suits, pending investigations, public relations, and reduced consumer confidence in general will never be known.
Because businesses are not charities, we can only expect that the price of future product offerings will include a portion of the company’s latest financial liabilities. Naturally, if every product sold performed as expected or better and without flaw or incident, we could continue to focus on improving the quality of both products and processes.
It has been said that success breeds failure. Success creates contentment, giving rise to complacency, and in turn results in lost focus. So, what is the value of a process that yields perfect products? In today’s global economy quality isn’t just a given – quality is priceless.
Until Next Time – STAY lean!