By James B. Kelleher - Analysis
February 8, 2010 1:32 PM EST
CHICAGO - The cascading crisis at Toyota Motor Corp stemming from the massive recall of some of its vehicles is prompting other manufacturers that adopted its production system to ask whether the incident reveals a fundamental flaw in the "Toyota Way."
The early consensus emerging from that re-examination is that the automaker's manufacturing philosophy remains the industry's gold standard, one that rivals reject at their peril.
Far from invalidating Toyota's approach, the Japanese company's current woes -- the thinking goes -- only show that it lost sight of its own core principle of "kaizen," or continuous improvement, when it responded to snowballing quality and safety concerns in Europe and North America.
"There's been a breakdown in a few processes but I just don't think overall that the model will be repudiated as a result," said Tom Murphy, head of the manufacturing consulting practice at RSM McGladrey.
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Jeff Liker, a professor of industrial and operations engineering at the University of Michigan and the author of several books about Toyota, agrees.
He says that problems with a single supplier -- like CTS, the Indiana-based company that made the gas pedals in question -- or with the Japanese software writers who may be behind the problems with the Prius's anti-lock braking system do not invalidate the company's production philosophy.
"Personally, I don't think it's a failure of the Toyota Way," said Liker, who also works as a consultant, helping other companies adopt Toyota's production and product development systems.
"I wouldn't damn the whole company because of something they didn't do any more than if a bomb fell on your house I'd blame you for it."
But that sanguine conclusion may come back to haunt Toyota's admirers in manufacturing.
That is because the automaker's woes -- like recent production issues at Boeing Co and Caterpillar Inc -- highlight an often overlooked problem with its obsessive focus on hyper efficient supply chains.
Sure, fewer parts and fewer suppliers can drive down material costs and radically simplify operations. But when a strategic supplier of a critical part encounters a hiccup, it can have crippling and costly implications for the enterprise.
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For decades now, top U.S. companies like jet-maker Boeing and machinery-maker Caterpillar have repeatedly rebuilt their plants -- and re-engineered their processes -- to make them more like those of Toyota, which was regarded as the paragon of efficient production and quality control.
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