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Why We Should Still Admire Toyota

We’ve all sent the news of Toyota’s recall problems, including the latest decision to pull the andon as it were and halt production until the defect is sorted out. Suddenly the company, and its venerable Toyota Production System do not appear to be as infallible as it has in the past. Indeed, some analysts are predicting big problems for the company as it recovers from these highly visible quality problems, with many customers defecting to other brands.

 

I for one, am impressed by the speed and scope of the actions Toyota is taking to address the problem. Toyota will likely look at all of the causes of this, not just a faulty design or part that was used, but questioning conditions at the highest level. According to this morning’s New York Times, “Toyota’s president, Akio Toyoda, has himself berated the company for excessive confidence, which he said had set the company up for a painful fall in the global economic crisis.”

 

While the number of actual occurrences related to the defective parts may not be significant, Toyota is doing the right thing here.

 

Contrast this with the banking industry. Goldman Sachs created and sold products to investors, that it later bet against and made enormous profits when these products failed to perform. It’s like a car company selling cars known to be defective, and then buying insurance policies that paid off when the cars broke down. The best Goldman Sachs’ Lloyd Blankfein could muster up was a lame admission that this behavior may have been improper. Meanwhile, there is no evidence of efforts to correct this, or prevent it in the future.

 

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Toyota is taking the responsible action in addressing this crisis – for that they should be admired.

Comments 9

  1. Steve Ahlers

    If "SIX SIGMA" is really a fine quality tool I’d like to know why Toyota is having so many safety problems at the moment ?

  2. JConsidine

    "Six Sigma" is not something that Toyota employs. In fact, "Lean" is a term that originates outside of Toyota. What Toyota does is "Toyota Production System" which consists of a variety of tools and approaches, as well as a specific culture.

    I’m not excusing escaping defects, especially where saftey is concerned. Clearly Toyota has issues in their processes, resulting in the quality problems that they are experiencing now.

    What I’m saying is that Toyota is not acting like a company that is taking a calculated risk that the cost of lawsuits is less than the cost to recall the products, and stop the line until they figure out what’s wrong and how to fix it.

    That takes courage, and is what I continue to admire about the company and its leadership.

  3. Dave

    Let’s see now:

    CNN Money (2/4/2010): "Toyota has known about brake problems in its popular Prius cars for some time, going so far as to fix it in new production vehicles, but has kept Prius drivers in the dark about the problem until the Japanese government called for an investigation."

    Then there’s this gem:

    NPR.Org (2/4/2010): "Transportation Secretary Ray LaHood has defended NHTSAs performance, telling a congressional panel yesterday that it were it not for the agency, Toyota would not have recalled more than five million vehicles because of problems with sudden acceleration."

    …and we’re supposed to look at Toyota as "courageous?" HAHAHAHAHAHA

  4. JConsidine

    Such are the risks of blogging about a topic before all the facts are known. That said, is it really that surprising to hear a politician say "if it wasn’t for me, this would be (better, worse, insert appropriate claim here)" ?

    I’m still not sure all the facts are known…

  5. Bill Woodward

    I have had Six Sigma , Lean, Kaizen jammed down my throat at work as a method to cut jobs, reduce costs . Toyota was held up as the example.

    Well does it work??? Lets just hope they do the recall and fix the safety problems a bit more efficiently than they make cars.

  6. Amitabh Saxena

    Toyota will definitely learn from this crisis as it has done earlier and come out with new improved set of tools. Let us not see why it is under crisis despite following Toyota Way. The tools and techniques need to evolve and they would, with the new challenges being encountered. So, wait for the new Toyota Way!

  7. Cesar

    Like Bill I was forced by my ex-company to use Six Sigma.
    I get the idea that we should improve the process, but when a bunch of people that know nothing about the product start to become the masters of the universe because they are Black Belts that is when hell break lose.
    I think James Considine is trying to excuse Six Sigma and Toyota.. James if lives were lost then Toyota and Six Sigma are responsible and there are not excuses for that.
    I think James rushed his posting. He does not know the facts and it is very likely that Toyota will have to pay millions.
    James we are not talking about 1 or 2 escapes. We are talking about MILLIONS of defects. There are not enough standard deviations to justify a life.
    James do you drive a Toyota? Would you let your kids drive one?
    I wouldn’t!

    I am rejoicing that finally we see the real face of Toyota and Six Sigma and these people are going to be eaten alive in congress

    BTW: I was going to take my Black Belt test in March good thing I did not pay yet

  8. Jamie Flinchbaugh

    I think the answer is yes. If Michael Jordan missed a basket, would we think he wasn’t a great player? Nothing is perfect.

    I have been resisting writing about the Toyota case because so little is actually know about the defect itself, and cause and effect isn’t clear. But I have been getting enough questions about it. I don’t think this changes anything about Toyota’s success. They still have dramatically fewer recalls than others. And of course no one that knows lean would say they were anything close to perfect.

    I did write up some of my thoughts and lessons in observing the story on my blog here: http://jamieflinchbaugh.com/2010/02/the-fall-of-the-mighty-toyota/

  9. Ed Larmore

    As James said above, Toyota doesn’t practice Six Sigma, so Six Sigma couldn’t be to blame. They mostly rely on poka yoke devices to catch or prevent defects. Shigeo Shingo, one of the fathers of the Toyota Production System, spends several pages in his book "Zero Quality Control: Source Inspections and the Poka Yoke System" saying that Statistical Quality Control is not as effective as ZQC (though he does say SQC is helpful when first setting up a manufacturing line).

    Shingo cautions against going overboard setting up poka-yoke devices, and to try not to predict what could go wrong. He advises to only install one to counter-measure a defect that is actually observed. So if they never tested for the accelerator problem, they would have never observed it. So they wouldn’t have had a poka-yoke device to catch it. But there’s a good chance they have one now.

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