Essay on Toyota Recall Crisis

6829 Words Mar 15th, 2014 28 Pages
Proceedings of the 2012 International Conference on Industrial Engineering and Operations Management Istanbul, Turkey, July 3 – 6, 2012

Car Recalls: A Problem Unique to Toyota or For All Car Makers?
Kamrul Ahsan School of Management and Information Systems, Faculty of Business and Law Victoria University Australia Abstract
Often automobile recalls are drawing media and public attention. Influenced by Toyota’s recent automobile recalls 2009-2010 this research conducts an empirical study on historical car recalls. The research uses secondary data from recall websites maintained by public and private organizations. For different car model year and manufacturer the study looks at frequency of recalls, recorded customer complaints, and
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Recalls are a part of reverse logistics where recalled products, information, and cash flow are in the opposite direction of the normal supply chain. The process of product recall is cumbersome; no one likes the pain of recalls. Members of the entire supply chain are directly or indirectly affected by recalls. Recalls are for a product lot or batch, whereas the recalled product collection or repair process is discrete. Now-a-days customers not only buy the product itself, they also buy or expect after sales services related to the product. Recall operations are mostly service oriented and often as difficult as the forward supply chain. Usually, the manufacturer needs to organize and support logistics, and technical, financial, and legal issues related to recalled products. Recall operations can also be compared to emergency management. It is a complex process to track affected customers and locations. A quick response to customer complaints and quick resolution of the problem is vital. Mishandling or late handling of recalls can seriously affect customer goodwill related to certain products or brands or manufacturers and that consequently can erode company profit to a large extent. The recent increase in product recall has shifted attention from why products are recalled to why it takes so long to recall a defective product that poses a safety

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