Wednesday, February 03, 2010

Toyota problems with unattended acceleration - because of or in spite of lean?

Feb 03, 2010

In an article titled "How Lean Manufacturing Can Backfire" Daisuke Wakabayashi at WSJ seems to imply that the unattended acceleration problem in Toyota vehicles, that caused the recall and suspension of production, is because of Lean Manufacturing. I beg to differ. It is in spite of lean manufacturing. One major recall like this can be bad for a company's reputation. But the alternative is a bunch of small recalls which is a lot worse - death by a thousand nicks. Let me explain.

The most commonly accepted definition of Lean Manufacturing is that it "is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination." As is explained in the article, "lean implementation results in using common parts and designs across multiple product lines and reducing the number of suppliers to procure parts in greater scale and at lower cost."

Toyota used CTS's gas pedals for eight models and had to suspend sales of all of them in the U.S. due to safety concerns. The premise of the article is that the risks are magnified as companies offer their products globally (single platform) in greater volume. The article quotes David Meier, co-author of "The Toyota Way Fieldbook" and founder of a consulting firm on lean manufacturing, "There is a trade-off with standardizing parts across the company. The cost may be decreased in the short term, but the risk is increased."

Automotive parts have become technologically complex. Having multiple sources for each of the parts just means that the chance of quality issues is that much higher because there are more points of failure. Of course, when things go wrong, the number of cars recalled is lower. Lower number of cars recalled but more frequent recalls.  Each recall just adds to the negative brand image. 

Fewer sources of parts, allows the company to have better eye on quality and decreases the chance of recalls. Of course, when recalls happen, more cars are going to be recalled but the chance of that happening goes down significantly because there are fewer points of failure. Also in a lean environment, because of lower inventory, the defects are caught earlier and hence the cost is lower. 

Toyota seems to have messed up their sensing loop on customer issues and seems to have done a poor job of the public relations, but I don't agree with blaming this episode on lean. 

Thoughts? 

Karthik

1 comment:

  1. I feel, it's more of a design & Testing issue. Sure, 'lean manufacturing' reduces chances of failure.

    But Cars from other kind of management practice are considered top quality in their respective class. Yes, your own Quality Mechanism becomes tedious. Also more variants can lead to more complex and time taking operations.

    But Toyota is Toyota as it delivers what normal population needed, and so they are hit with MASS PRODUCTION and Standardization.

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