April 6, 2010
by Joe Terrett
The owner of a beloved 17-year old Saturn was in the market for a new vehicle. The car was still road worthy but some expensive repairs were on the horizon. It was time to move on, but to what?
Our driver would have liked another Saturn but the brand has been dumped by General Motors (so much for loyalty), so he conducted some rudimentary research to check out what the other guys have to offer. He’s a cautious fellow. Only after months of online trolling and plenty of networking did our nervous customer give several compacts a look-see, but decided to focus on trusted Japanese brands, specifically Toyota. The reason: perceived value thanks to great engineering, high quality and a well-earned reputation for trustworthiness.
What a time for Toyota to meltdown. Massive recalls, including its trusted Corolla. Floor mats, sticking accelerator pedals, brake issues, eight models affected in one way or another. Oh my, says the spooked car buyer who headed for the nearest General Motors dealership to sign an incentive-loaded deal on a Chevrolet Cobalt.
So what happened to the world’s greatest automaker?
Some are quick to blame Toyota’s religious devotion to lean manufacturing. The Wall Street Journal suggested eliminating waste by using common parts and platforms and making heavy cuts to the supplier base to achieve cost savings also introduces risk.
Various lean experts cite Toyota’s preoccupation with becoming the world’s biggest automaker, which resulted in too much expansion, too fast and for a goal that’s of no interest or value to the customer.
And crisis management consultants have weighed in, saying Toyota’s growth outpaced its management structure: the mechanisms weren’t in place to identify and deal with the problems before they blew up into a worldwide debacle.
Should manufacturers be leery of lean production? Certainly not.
The lesson manufacturers must glean from Toyota’s misfortune is to ensure management and sustainable process improvements are aligned.
Lean guru James Womack of the Lean Enterprise Institute said modern managers are focussed on accountability, setting goals for results and providing incentives to meet them or punishments for failing. This is adverse to sustainable process improvement.
He recommends a dialogue about how to merge the management systems with sustainable process improvement. Points to cover include:
• How does the system engage and align people to determine which problems are most important?