Kiley Sorensen

Operations And Supply Chain Management

Toyota Case Study
October 3rd, 2023
Toyota’s Crisis
In 2004 Toyota faced a big problem. The car company that has been credited for their excellence
and quality cars have run into an issue for their new model. Although the relationship between
Toyota and ChassisCo started out positive, with ChassisCo successfully handling the production
of rear suspension cradles for Toyota's vehicles. As the complexity of their responsibilities
increased, capability gaps became evident, posing challenges for the launch of the 2003 Suprima
model. Toyota recognized these issues late in the process, emphasizing the importance of
aligning supplier capabilities with the demands of the production process.
ChassisCo was tasked with the manufacturing of the rear suspension cradles for the 2003
Suprima model. This was a critical component of the vehicle's assembly. Toyota agreed to give
ChassisCo ownership of project management for the components' parts during the launch. This
included aspects like sourcing, logistics, and inventory management. This involved efficiently
managing the supply chain, coordinating with suppliers, and ensuring timely and accurate
delivery of parts. ChassisCo was also expected to learn from Toyota's engineering and
manufacturing processes, particularly the Toyota Production System (TPS) or "The Toyota
Way." Toyota encouraged ChassisCo to adopt TPS principles and apply them to improve their
operations in order meet high-quality standards and manufacturing specifications set by Toyota
for the rear suspension cradles. This included adherence to technical requirements, defect
control, and quality assurance throughout the production process, and to make it easier, they
were encouraged to collaborate closely with Toyota's engineering teams, learn from their
expertise, and work together to ensure that the rear suspension cradles met the required standards
and specifications.
In summary, Toyota wanted ChassisCo to be a proactive, capable partner in the
manufacturing process, ensuring high-quality production, adherence to standards, and a
commitment to continuous improvement while embracing the principles of TPS.
Toyota had the responsibility to ensure that ChassisCo had the necessary support,
guidance, and resources to produce the rear suspension cradles to the desired quality and
specifications. They played a vital role in setting the standards, providing technical support, and
fostering a collaborative relationship with ChassisCo to achieve mutual success in the production
of the Suprima model. Since Toyota chose ChassisCo for the project they also took on all of the
resposibilities that would come when things went wrong, like they did. Toyota had the
responsibility of monitoring ChassisCo's performance, progress, and adherence to quality and
manufacturing standards throughout the production process but failed to do so in a timely
manner.

There are many things that ChassisCo could do to help resolve the crisis, these include:
 • Invest in additional resources, machinery, or personnel to increase production and meet
the demand for the Suprima rear suspension cradles. This could help the issue of low
output and potential burnout of existing employees.
• Implement better quality control measures, including inspection processes and defect
tracking systems, to ensure that the rear suspension cradles meet the required quality
standards before they reach Toyota. Addressing quality issues is crucial.
• Strengthen the relationship with suppliers and ensure they meet the necessary standards
and deadlines. Collaborate with suppliers to improve processes, quality, and delivery
schedules.
• Invest in training the workforce to improve their skills and understanding of the
production processes. A well-trained workforce can contribute to higher efficiency and
quality output.
• Maintain open communication with Toyota no matter the challenges.
• Consider using advanced technologies and automation to enhance precision, speed, and
quality in the production process. Automated systems can help minimize errors and
increase output.

If I were in charge, I would put my main focus on investing in quality machinery and
resources and invest in training and high-quality employees. If the company is already starting
with stellar employees that have the drive to train and want to improve their skills, and then
couple it with top-of-the-line machinery the rest will fall into place. The quality of the pieces will
be great, the rate of efficiency will be high, and a positive work environment will encourage
communication with partner companies and may even bring in future business.

Toyota, as a key stakeholder and recipient of the rear suspension cradles from ChassisCo,
had several options to help in resolving the crisis and ensuring the production of high-quality,
defect-free components. They should have had a set plan before the crisis became a crisis, but
now that it is too late, Toyota can do a few of these things to help resolve the issue:
• Focus on stabilizing production by addressing critical defects and reducing downtime.
• Implement quality measures to prevent further defective machines from reaching
Toyota's production line.
• Engage in joint problem-solving workshops with ChassisCo to identify and prioritize
critical issues that need immediate resolution.
• Provide technical experts from Toyota to work closely with ChassisCo's teams, offering
expertise in quality control, manufacturing processes, and lean practices.
• Implement a real-time monitoring system to track production, defects, and progress in
addressing issues. Use data analytics to identify patterns and areas for improvement. This
will encourage the production team to work effectively because they now know they are
being monitored, discouraging poor work ethics.

If Toyota were to name me CEO today, I would do the same as outlined above. Find the
source of the issue, correct it immediately to avoid future mishaps. I would also find out who
was in charge at ChassisCo, fire them, and find a suitable replacement, because I would not
allow employees with power to work and oversee production if they allowed subpar work to be
produced. Great leaders encourage great employees. By implementing these strategies
collaboratively and proactively, Toyota can effectively address the crisis at ChassisCo's Athens
plant, minimize financial losses, and establish a stronger, more resilient partnership for the
future.