A quick quiz to test your knowledge of manufacturing excellence – When faced with a serious quality problem a company should:
A. Drastically increase the number of inspectors, establish a management committee to manage quality, add layers of management to establish greater control, and stretch out lead times to build in more time for all of these inspectors and management controls to check and control the quality of the work being done.
B. Reduce the number of inspectors to create a stronger culture of responsibility for quality at the lowest levels of the company, empower the people doing the work to make the best quality decisions, eliminate layers of management to get a shorter communications chain between the top managemers and the people doing the value-adding work, and tighten up cycle times to get the quickest feedback possible between the point at which defects are created and they are discovered in subsequent steps.
For most, perhaps even all, Evolving Excellence readers this was taken as a rhetorical question. Anyone who knows the first thing about quality knows that B is the clear path to follow, and that A reflects the thinking of old school managers who think that senior managers and quality experts are the source of quality, rather than the people actually doing the work. Answer A thinking is based on an assumption of a certain level of ignorance and incompetence at the front line that has to be controlled by a smarter, more dedicated higher level.
If there has been any doubt about just how far Toyota has fallen from the heady days of the 1970's, 80's and into the 90's the fact that they answered 'A' to these questions should put an end to it. They are solidly among the ranks of the mediocre.
"Toyota is extending the time it takes to develop new vehicles by about four weeks for more quality checks … Toyota now has 1,000 people devoted to quality control … an increase of about 50% … the company has created a 100-person committee devoted to incorporating customer feedback into vehicle development … It has also added a new layer of managers to help train and instruct engineers."
Kiichiro Toyoda and Taichi Ohno would never have even considered compounding a quality problem with so much pure waste. They would have known that, if the extra 500 quality experts, 100 committee members, and the new layer of management were that much smarter than the engineers they should replace the engineers with that enlightened horde – not put them in pace to do nothing of value but to spend their days looking over engineers' shoulders to keep them honest.
It used to be you had to go to Detroit to see such a litany of all the wrong moves. but Ford and (much to my surprise) even Chrysler/Fiat know better than to operate like this. I think that, in my future writing about lean, I am going to have to refer to 'Old Toyota' versus "New Toyota' because it is increasingly clear that they are two completely different companies. And it is increasingly clear that in their rush to take over from the old regime and globalize, modernize and maximize, the leadership of Toyota failed to take the time to learn from the people they were so bent on replacing. They have failed to respect what got them where they are today, and that does not bode well at all for the future.
david foster says
“100-person committee devoted to incorporating customer feedback into vehicle development”…even if it were an 8-person committee, it would still be a terrible idea. Don’t they have product managers at Toyota? Shouldn’t the job of a product manager include gathering all available information related to needs for the product development/evolution, whether from customers or from the competitive landscape?…and then establishing plans incorporating that information?
It seems to me that organizations throughout the world have, over the last couple of decades, been utterly forgetting the basic principles of management.
Mark Welch says
This is a real longshot and pure speculation on my part, but do you suppose Toyota is “crazy like a fox?” What I mean is that Toyota obviously should know that choosing “A” is a path to failure, but knowing the general public does NOT know this, and would SUPPORT throwing more people and hours at their problems, maybe Toyota is making it LOOK like that is what they are doing when in reality they are employing these extra people and hours to get back to developing their people as top problem-solvers, which Akio testified is the root cause of their current problems.
Yes, I know this speculation may be a stretch, but I also find it hard to accept that Toyota really is THAT foolish… If they are, Heaven help them.
Andy Wagner says
Product development and quality assurance are different animals. As I understand what I have read, they are restoring a layer of managers to the engineering ranks to act as mentors and teachers for their younger staff. This was a management layer *removed* to give them more engineering bodies during their quest to be bigger than GM.
Toyota is known, and respected, for having a short span of control on the shop floor because it allows them to solve problems quicker and train people better.
Why wouldn’t the same principle apply to those who design the product?
Toyota’s issues in recent times have had more to do with product engineering than traditional manufacturing quality. Young frontline design engineers need to be able to “pull the cord” and get help too. The design flaws that have emerged in recent years suggest that they weren’t able to do that.
Jim Fernandez says
I agree with Mark Welch’s comment above.
Give your two test questions to the US Congress and see if they pass the manufacturing excellence quiz. Now give your test questions to people on the streets of any city around the world and see if they pass the manufacturing excellence quiz. Toyota must respond to these people as to how they are attacking the quality problem. We can only hope that Toyota is advertising these kinds of changes to satisfy their customers. And that they are also working on the path outlined in answer B.
If you ran the company would you advertise that you are “reducing the number of inspectors to create a stronger culture of responsibility for quality at the lowest levels of the company”? You’d have to be pretty brave to do that. But then again it would certainly be the correct thing to do. And it would fuel a great world wide debate on manufacturing excellence!
Bill Waddell says
I appreciate you guys’ loyalty to Toyota, but if Toyota built the waste of 500 inspectors, a hundred person committee, added a layer of management, and extended their development times by 4% all as a PR move, then they need to seriously think about hiring a new PR firm.
Mark Welch says
Just a little interesting comparison and historical coincidence… When the Imperial Japanese Fleet attacked Pearl Harbor, they attacked from, and showed up on the radar as, a fleet approaching from the northeast, to APPEAR as a friendly fleet approaching from the U.S. mainland. We all know, as Paul Harvey used to say, “The rest of the story.” In this same way, maybe Toyota is making it look like they’re attacking their quality issues from an angle more acceptable to the general public, when in reality they’re getting after what they know are the true problems. Especially after Akio Toyoda’s testimony, knowing THEY KNOW what their true problems are, I can’t help but think they are showing what people WANT to see, but simultaneously fixing what NEEDS to be fixed. Yes, their PR efforts don’t look good to the LEAN community, but they likely do to the buying public. The public doesn’t know lean thinking. Heck, even manufacturing professionals who tour Toyota’s factories don’t get it. So, they get the public, the press, etc. off their backs and more confortable buying Toyotas while they fix their problems. Sounds like a strategy to me.
I struggle with accepting that they truly are “ditching the girl they brought to the dance” after decades of success. I’m not buying that just yet… Time and results will tell… But, Bill, if time proves me wrong you can hold me to this and I will write a guest post acknowledging my naivete’ and wrongly placed allegiance to Toyota. ;-)
Mark Graban says
If your current process sucks, you might need inspection in the short term. That’s not altogether unreasonable. Once you are ensuring quality at the source, only then can /should you remove inspection.
Your typical hospital — if you’re going in for surgery, their “timeout” before the procedure is nothing but an inspection to make sure you’re the right patient for the right surgery at the right spot and that everything they need is there.
You could be a purist and say “THAT’S WASTE!!” or you could realize that’s a necessary evil, that timeout, until there’s a better process in place that ensures the wrong patient isn’t brought in, that the x-ray isn’t reversed, that blood is ready, etc.
If you don’t have a perfect process, inspection isn’t the worst idea as a containment strategy.
I think you’re being a bit overly dogmatic on this one, Bill.
Bill Waddell says
Of course you are right Mark that, in the short term you have to do what you have to do to stop the flow of blood. Doubling the size of the quality control staff and adding a layer of management have a ring of permanence to them, however, that leads me to believe this is more than a temporary expendience to correct a process flaw.
Dirk Fischer says
I really enjoy reading your blog and agree mostly all the time. This time I disagree. I can´t and won´t believe, that Toyota is doing this without having a proper process in place, that actually delivers value to them. They have made their root cause analysis and have defined some first actions. Short term action is always needed as well as long term action to eliminate the root cause. In order to achive fast results, they have installed a firefighting team now, not just to stop bleeding, but also to learn und understand the situation much better. This team will observe very carefully, understand in depth and act effectively. Just wait !
Bill Waddell says
You guys sound like the teary-eyed kid who ran up to Shoeless Joe Jackson as he left the Black Sox grand jury hearing and said, “It ain’t true, is it, Joe?”
Toyota has been fumbling with this for almost a year now. At some point even the truest believers have to acknowledge that the mojo is gone. :)
Mark Graban says
OK, so you’re blogging to complain about what you’re guessing Toyota is doing (adding a permanent layer). None of us know that, Bill.
What’s the lesson learned for non-Toyota companies? I missed it… I’m not trying to sound snarky, I’m serious.
Lost in the Northeast says
When we discover our heroes have feet of clay, to whom are we to turn for inspiration and guidance? If Toyota has become “just another car company” where can we turn for our lean model? Ford? GM? Not likely.
Many would hold up Danaher as the model, but many would not–claiming they are primarily a growth-by-acquisition company with more interest in short-term gains from lean than with building true lean cultures.
Many of the old examples from the first lean texts are no longer viable. Donnely Corporation? Nope, bought by Magna and run like the rest of the Canadian mega-supplier’s plants, most of which have moved out of North America. Wiremold? Sold years ago to folks who did not care about this “lean” nonsense and dismantled it. Motorola? Not much left there to emulate.
So, it appears ALL of our heroes have feet of clay. There are NO examples of long-term lean success except for a few small-time operations scattered around. Does that say scrap lean? No, that says scrap your hero worship and blaze your own lean path. We used to admonish ourselves not to try to be Toyota because we never could be. What more powerful example could we ask for that this was the correct philosophy? Strike out on your own, learn for yourself, and make your own stand against the barbaric counters of beans. Be like Sinatra and do it your way.
Bill Waddell says
I believe the guessing – more like hoping – that the layer of management and the additional 500 quality control jobs is temporary is on your part. I merely reported what the article said – and it said they created a layer ansd added the jobs. You injected the assumption that because it might be temporary, it must be temporary. Making such an assumption allows people to hold onto the belief that Toyota still belongs up on a pedestal – that they have not had a fundamental change for the worse.
That said, you ask a good question. I think the important lesson is to acknowledge that Toyota has, in fact, changed. For whatever reasons that the business historians will uncover at some future date, when they changed the guard in the 1990’s the new management pursued a growth strategy that has undone some of their fundamental underlying business philosophies. What ‘leanies’ have to take from it is that Toyota is no longer the company to emulate lock, stock and barrel. Their slide in no way diminishes the validity of lean – it merely means that doing things the ‘Toyota Way’ is not necessarily the smart thing to do.
I guess one of my ulterior motives is to try to subtly steer those who look to us – you and me and the rest of the lean consulting community – away from some of the consultants who have invested heavily in Toyota and are already starting to skew the Toyota message to protect their reputations. As you well know, many lean experts base their claims to expertise almost entirely on their mastery of the Toyota Production System, or on career experience working for Toyota. I am concerned that some of these folks will rationalize things like adding layers of management, or reverting to inspection based quality (not temporary measures as you pointed out are sometimes an evil necessity, but doing so on a regular basis as I think Toyota is starting to do). They will attempt to change the lean message because to denounce multi-layer management and quality inspectors is to denounce Toyota; and they will fear that to denounce Toyota is to acknowledge that their Toyota based pedigree does not make them the keepers of the secrets to manufacturing perfection they claim to be.
Lost in the Northeast makes some good points, that I believe have been the right way to look at it all along – namely that each company has to find its own way based on sound, underlying principles, many of which Toyota taught us during their great run. We have almost all been guilty of an unhealthy and excessive Toyota worship. Doing things simply because that is what Toyota does has never been a good idea. I suppose the most important take-away from this blog post is to send the message that blind Toyota imitation should come to an end – and that companies should take from Toyota only that which is helpful to them based on a solid understanding of what they are taking from Toyota and why.
Mark Graban says
Thanks, Bill. I totally agree with you that Toyota worship or blind imitation or whatever people would call it is a bad thing.
Not everything Toyota does is worth emulating, far from it. It does seem that the “DNA” of Toyota has changed at the executive level even if it hasn’t at the factory level (or it seems not to have, although I hear some reports otherwise).
We’ll see how this plays out. Assuming their change is temporary is just as unknowable as assuming it’s permanent. But I think there’s complexity in the case beyond your A vs. B construct.
Dirk Fischer says
nobody denies, that Toyota has left the Toyota way as described by J. Liker.
But in this sepcific case, I think it is rather positiv what they are doing than negativ.
They have done well over so many years, they have put preople and processes in place, that were very successful. Now they have signficant problems and they do not know why. They still made all their testing, checklist engineering, they still follow their proven supplier development processes, and…and…and. All the things, that has made them the clear number one in the market. But now they see, that they are failing. So what the hell is going on? What has changed?
I think (and hope) that this is the main reason for doing this. Again: observe very carefully, understand all the details and the cause and effect relationships and then act.
Yes this kind of inspection and rework is a NVA. No doubt about it. But sometimes it is necessary in order to better understand a situation. If you are instable, you need to inspect and understand the situation, before you can stabilize. After stabilization you can remove the NVA activities, not before. Priority no. 1 in lean is serve/protect your customer and not eliminate NVA at the cost of your customer.
Just a general comment: We should be careful what time frame we look at, if we judge whether a company is still on the right way or whether it has lost it´s way. If we look over the long run, there is still no better performing company in this market. If we make the time frames too short we become more and more like private equity idiots.
And one final comment: If this could happen to Toyota….. I am very affraid of for many other companies….
Dirk Fischer says
and there is another one:
“There is the Toyota Way and there is Toyota´s Way”.
I still believe in the Toyota Way. For me, it is by far the best and most hollistic management system currently known. Please let me know, if you know something better.
And we see again how hard it is to realize it; even for a company called Toyota.
Toyota was also successful, because they kept things simpler than many others. With the Hybrid technology kicking in, that has maybe changed. I know, that there Lexus (levelled) production plan was kicked badly, due to many unplanned orders. Well this is heavily violating their systems, which are mainly based on stability. Having to change the production schedule big time is creating more instability. Yes, a situation, that many companies are used to, but Toyota mabe not.
Yes, they maybe grew too fast, yes they maybe got arrogent, yes it is the wrong strategy trying to be the biggest rather than being the best.
So let´s learn from it.