Putting Toyota in perspective : the causes, the consequences and the meaning of the present crisis

The aim of this paper will be to put into perspective the present crisis of Toyota, taking into account both the evolution of its productive model and its historical trajectory.

 

First, it will important to identify the nature and the scope of the present crisis. It is indeed possible to talk about multiple crises – profitability crisis, quality crisis, management crisis, brand image crisis... What are therefore the actual elements that in each of these domains justify or not the use of the term "crisis" ? More precisely, is Toyota confronted with a temporary or with a structural crisis ?

 

Second, we will try to make some hypotheses concerning the causes of these crises. It is clear in fact that these crises are the result of a complex chain of factors, but it is too early to be able to identify them. Nevertheless, on the basis of the past trajectory of Toyota, and with the knowledge of how its productive model functions, it is possible to advance some hypotheses. Notably, by stressing the hidden fragility of the Toyota Production System, and the constraints that the fast paced internationalization of the company in these last ten years have placed on its viability conditions.

 

Third, we will identify which are at present the consequences of these crises, and also what they might be in the near and more distant future. Again, the understanding of the fragility of TPS leads us to believe that the crisis that Toyota is undergoing today will be deeper and longer than it is generally expected, and we will provide some explanations and evidences on why we do believe so.

 

Finally, we will discuss the meaning of this crisis, not only for Toyota, but for the whole sector as well. Since the late 1980s the TPS has been indeed the template that the sector has used to transform itself in a more efficient and flexible system of production. The results are by all standards very poor as the present structural crisis of the sector emphasis only too well. Now, even some advocates of Lean Production were stressing already in the middle of the 1990s most of its limits. The Gerpisa works have gone further in deconstructing this managerial panacea. Yet, the success of Toyota in the late 1990s and 2000s after a more difficult period in the early 1990s, had restored the general faith in Lean Production. Hopefully, this faith will be shattered by the present crisis, and the search for new ways of generating value in the sector will finally begin.