Writing a new book on quality
Bob Vavra comments on Toyota crisis and the impact on manufacturers
They literally wrote the book on quality management - and more than 50 other books have been written about their quality system. Toyota and quality have been synonymous for three decades around the world - and it's been a sore subject for American-based automakers.
Then stories began to emerge in January and February about millions of recalled Toyota cars and trucks after problems with a gas pedal design flaw. Then there were the problems with the world's top-selling hybrid, the Toyota Prius. There were a few folks who probably took some small bit of pleasure in seeing an automaker who had become so identified with quality suffer from what, by any estimation, is a massive failure of quality control.
Let's be clear about a few things at the outset. First, this was a product design flaw, not a manufacturing flaw. The accelerator pedals were poorly installed, they were poorly designed. Yet it is the manufacturing plant that will bear a large weight from this issue, since most people wouldn't make that distinction.
Second, and perhaps most important to this discussion, is that the impact of the recalls and repairs will stretch far beyond Toyota in Tokyo. The recalls shut down Toyota plants in Indiana and Kentucky, idling American workers in the process. These are people who take justifiable pride in the quality of their work. These are American workers who lost wages and benefits through this work stoppage. No one ought to take any comfort in that.
A new book of quality needs to be written, and Toyota is going to be Chapter 1 in how quickly a culture of quality can crack. It ought to be required reading for everyone, because quality of products is by far the most important thing to your customers, according to findings in the 2010 Changing World of the Plant Engineer study we've been conducting for the past two months.
We asked readers around the world what was most important to their customers about the product they make. In the preliminary findings (the full study will be released next month in Plant Engineering) 74% of U.S. plant managers said quality was their customer's top priority. Only 23% said price and just 3% said where it was made mattered. The numbers from international manufacturers were almost identical - 80% cited quality, just 15% said price.
What the numbers tell us is that quality should always be at the forefront of any plant's operation. Quality design, quality manufacturing, quality maintenance and quality-inspired management produce quality products. They also produce products at a lower cost to the company, and it produces those products with a lower energy usage and less waste. All of those production costs are today considered intrinsic parts of quality.
That's because however you measure and manage those production costs, if your end product isn't a quality product, you have in effect wasted the time, materials and energy it took to make that product. From children's toys to pharmaceuticals to food, we have seen many examples product recalls that have followed illness, injury and death. Some cases were criminal; many were the results of poor design. Many were the result of poor quality management practices on the plant floor. The victims of those product failures don't much care why. Their lives were altered as a result - sometimes permanently.
The deaths and injuries being attributed to the Toyota recall put a more human face on this business of quality - both its importance when it is followed and its cost when it is not. The issues still to be sorted out will drag out for years as courts and legislators have their say.
But for those in America who manufacture the world's products and those around the world who manufacture products for us, the question we are faced with is more immediate. What did we learn this time?
The cynic might find that Toyota, for all its posturing about quality and "The Toyota Way," was, in the end, no better at quality than anyone else.
That is what ought to really scare us.
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2012 Salary Survey
In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.
Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.