Remembering Lessons of How Quality Management Revolutionized the Auto Industry

Have recent headlines about vehicle recalls and Boeing's 737 MAX debacle left you wondering if the manufacturing world has lost its grip on quality? Buckle up as we navigate the complexity of quality control and dissect the consequences automakers like Tesla, Ford, and Stellantis are facing due to lapses in their systems. We'll explore the fundamental principles of a proactive quality assurance approach, the significance of rigorous product testing, and the undying necessity of continuous monitoring to safeguard the pinnacle of safety and reliability. With an eye on the past, we scrutinize whether the wisdom imparted by quality gurus of yore is gathering dust on the shelves of today's fast-paced industrial environment.

Step into the realm of Total Quality Management (TQM), where the promise of zero-defect products isn't a utopian dream but a tangible goal. In this episode, we dissect how TQM can cut the excess, streamline processes, and pivot the focus towards what truly adds value for the customer. The conversation also celebrates how this philosophy can skyrocket productivity, amplify customer contentment, and boost the morale of the workforce. Toyota's relentless quest for perfection is put under the microscope as we examine how their commitment to TQM has not only set the benchmark for the industry but also propelled them towards cutting-edge innovations such as solid-state battery technology. Join us as we argue for a renewed emphasis on TQM, underscoring the pivotal role of leadership in nurturing a culture where continuous improvement isn't just a strategy, but a way of life.

Transcript

Tony Hines: 0:00

Hi, tony Hines, here you're listening to the Chain Reaction Podcast, all about supply chain advantage, and it's great to be here. Well, this week it struck me that in the past few weeks, months, we've had a number of incidents for recalls of vehicles Tesla in the United States, Ford, stellantis and so in the car industry, lots of recalls all to do with quality issues on the vehicle. And in the last week or two we've had the Boeing MAX 739 aircraft, which is also experiencing quality issues with the bolts on a door where that door fell off on the Alaska Airlines plane. But on follow up checks there are other instances of loose bolts on the plane. Now that doesn't sound good and it struck me we haven't done a program about quality for some time, but it might be worth reminding people about the importance of quality and what we learned in the past about how to improve quality. It seems timely to do that and perhaps the folks at Boeing want to take a listen and perhaps the folks at the car companies Stellantis, tesla and others also want to take a listen. But no one should be complacent when it comes to quality, and that's the message. So let's relearn the past.

Tony Hines: 1:42

The number of recalls on vehicles has grown over the past 20 years more than a thousand vehicle recalls for the first time in 2016, but there are now a lot more. With the latest episode, the report from McKinsey says that the complexity and reach of quality issues has increased, with half of all recalls today affecting more than one model and 14% affecting more than one brand, and that's borne out by the latest examples of vehicle recalls. They're in the news far more regularly and they're in greater numbers, and the problems don't seem to be going away. So this leads us to think has quality control diminished? Have the lessons of the quality gurus not been learned by the new generations of manufacturing organisations? Have they lost what was once central to the making of any products or services?

Tony Hines: 2:38

Manufacturers have to take a proactive approach to quality control and safety and to invest in the necessary resources to ensure that products are safe and reliable, and this includes rigorous testing, quality assurance processes and monitoring and maintenance of products out in the field. The case of the Boeing 737-9 demonstrates the importance of safety when it comes to quality control. The Federal Aviation Authority issued an air worthiness directive requiring inspections of affected doors and the replacement of any loose or missing bolts. This situation seems to be a basic requirement, but it's a basic requirement that's absent in the production process. If this sort of thing is happening and it's very important that companies like Boeing learn from incidents like this there are far too many incidents occurring in aircraft manufacture at that company in the past few years, it's as though the whole quality control system has just been pulled out.

Tony Hines: 3:41

From what's happening Now I may be doing a great injustice to the company, but the evidence is there for all to see. So is it time that they were taking steps to invest in safety and quality? Yes, I think it is. When you think of all the effort that went in during the 1980s and 1990s and earlier, of course into building quality systems that integrated with company processes that determined that products were safe and fit for purpose. Many companies seem to have lost the ability to do that. They've taken the eye off the ball and, of course, quality is something that's easy to ignore, overlook or indeed cut costs. In times which are difficult, very easy to move away from quality and once you do. Of course, reputation and brand can be damaged severely, and that's what's happened to Boeing. Boeing's a first class manufacturer. It was one of the best aircraft manufacturers in the world and it still may be, but there's something wrong with the quality processes If things like what's happened in the Alaska Airlines case has actually occurred Now.

Tony Hines: 5:06

There are various things you can look at. You can look at functional processes. You can firefight these things. You can simply be reactive to what's happening. Or you can focus on a single quality issue, which might be to do with organization and governance and lots of paperwork, to say that everything's okay when actually it may not be but the paperwork says it's okay.

Tony Hines: 5:30

I remember a lot of the criticisms on the British Standard 5.750 when it first came out, on the Quality Standard, and people complaining that if you specified you could make a tin can with holes in it. Providing you did that and you did it to specification, that would pass the quality test. And of course, the obvious flaw in the quality process there is that who wants a tin can with lots of holes in it? So the specification was wrong in the first place. So if you put the wrong specification in, that's going to be quite an issue.

Tony Hines: 6:04

You need to integrate quality systems. They need to be embedded in everything you do. You need key performance indicators to tell you what's happening and you need to make sure that quality is contributing significantly to your business performance, to make things better. And, of course, all the excellence movement remember Peters and Waterman all about excellence. Well, some of that stemmed from, obviously, the times when quality was being significantly improved in lots of organizations around the world and the ideas of continuous improvement, kaizen, all that kind of earlier development and all the work that was done by Toyota, the leading automobile manufacturer in the world, which was very significant to improve quality in manufacture. Has it been forgotten? And quality has to be in everything that the organization does. So it's time to return to quality Now. A good starting point here.

Tony Hines: 7:04

In the next section I'm going to look at what quality developments were most significant in the 20th and 21st century. Supply chains, of course, have been littered with three-letter acronyms for as long as I can remember, just in time business process, re-engineering, mrp2, erp, tqm, but none of these are quick fixes. But the TQM is one that we need to revisit here and we can think back to the history of what's become known as the quality movement. The idea of being world class is generally associated with Hayes and Wheelwright back in 1984, when they looked at best practices of German and Japanese firms that competed in world markets. And then along came Schoenberger in 1986 and he used the term best practice to describe manufacturers making continuous improvements at scale and fast. In the 1990s we had lean Womack, and Jones and Roos, and we had all the best practice work that carried on with Fry, et. a etel., harrison and others.

Tony Hines: 8:23

But here specifically I want to take a look at the total quality movement and what it means to have total quality management. It began in Japan In the 1960s. They went through a quality revolution and prior to that, made in Japan meant it was cheap or even, by some standards, could be declared shoddy when it comes to consumer goods. But it all changed with total quality management. And, of course, W. Edwards, Deming and Deming's philosophy was to establish the best current practice within an organization and establish the best practice as standard procedure, train the workers in the best way to do things and in a manner that everybody would understand, and it relied, of course, on having quick hits, quick results, so that they could see the benefits of what they were actually doing. So Deming emphasized that people could only be convinced if they had trust in the processes, and that's what he set out to do. If we take a look at Deming's tools or his toolkit. One of the key things that Deming introduced was the Plan Do Check Act, the PDCA. It was an improvement cycle plan something, do it check act.

Tony Hines: 9:40

And Six Sigma has pursued Deming's lead with a Define, measure, analyze, improve Control process. So Six Sigma has the DMAIC process. It provides rigor and it's a very useful tool to follow. You define something, you measure it, you analyze it, you improve it and then you control it and you repeat the cycle, and it's a cycle that is continuous and that's the key to any quality improvement. It's a continuous process and that was all started by Deming, of course, in Japan.

Tony Hines: 10:28

Now, when I look back to the way in which I solved problems when I was working as a consultant to organisations looking to improve the quality in supply chains, I can remember going away and drawing pictures of what was going on, mapping things out using mind maps, gathering data, producing Gantt charts, looking at the Pareto impact, looking at the 80-20 relationships of what was happening where we could concentrate our effort better to make improvement, sitting down with people in what became known as quality circles where we would listen to what the issues that were coming out of the production line or the particular situation were and gathering evidence on which to act. So we'd sit down, we'd plan, we'd do, we'd check and we'd act. But the DMAIC process was very close to our hearts, although it wasn't called DMAIC back in the time when I started. It was really kind of a process of defining the problem, measuring it, analysing it, implementing something and then controlling it. So we did actually follow those steps, but in a looser connection probably.

Tony Hines: 11:47

DMAIC is a data-driven improvement cycle and it's designed to be applied to a business process to discover inefficiency or flaws in the system. It often finds results in output defects and it gives indications of what needs to be done to put them right. So the whole aim and purpose of DMAIC is to improve, optimise and control existing processes. Although it's credited to Motorola, it was further developed by the Toyota Automobile Manufacturer. Toyota employed the process to improve the quality of the vehicles and of course it has its roots in Deming's work and DMAIC of course became part of the move towards Six Sigma, central to it. In fact, as we've already said, motorola was one of the first companies to implement total quality management back in the 1950s. But TQM as a management philosophy developed over time leading figures such as W Edwards Deming, Juran M and Armand V Feigenbaum were instrumental in establishing TQM. Deming, for example, developed methods for statistical analysis and control of quality to Japanese engineers and executives in the 1950s, and they were the original roots of TQM.

Tony Hines: 13:18

Juran taught the concepts of controlling quality and managerial breakthrough, and Feigenbaum published his book Total Quality Control, which was the forerunner of understanding TQM. So that's how they individually contributed to the development of TQM. Juran was was an American engineer and management consultant, and he was known for his work in the field of quality control. He developed what became known as the Juran Trilogy, which consisted of quality planning, quality control and quality improvement, and he also introduced the concept of fitness for use, which emphasized the importance of meeting customer needs and expectations. Feigenbaum was a quality control expert, American again, who was known for his work in the field of total quality control, and he emphasized the importance of quality in all aspects of an organization, including design, production and service. He introduced the concept of total quality cost, and by that he included quality planning, quality control and quality improvement.

Tony Hines: 14:24

Several companies were instrumental in using and adopting TQM to improve their business processes and reduce losses due to wasteful practices, and some of the companies that benefited. Of course, toyota was one of the first to establish TQM in its organization and we'll come back to them a little bit later. Exxon used TQM to rebrand itself as a trusted fuel provider after the Exxon Valdez oil spill back in 1989. They analyzed customer needs and once and used TQM to establish and implement those quality processes, the idea being to avoid such a disaster as Exxon Valdez in the future. They looked at four areas of the end user and consumer confidence, including high quality products, efficient and easy to use services and products, and to better explain the warranties and guarantees.

Tony Hines: 15:17

Xerox used TQM to regain market share after losing 40% of its market share to foreign competition between 1960 and 1990. It established TQM at its Palo Alto research center, known as PARC, and focused on ways to emerge as a leader in the print copy fax market. They also focused on benchmarking and leadership, and they reconfigured how their suppliers would be able to establish quality products so that they could compete globally. Xerox later went on and won the Baldrige Award for their TQM efforts. The Baldrige Award, of course, is the TQM badge of achievement in this area. The Ford Motor Corporation, too, adopted TQM, and they saw what the Toyota company had achieved by following TQM processors. They had a new slogan quality people, quality products which emerged after poor, after Ford partnered with Chemfil, the paint supplier. As with many automakers, the emergence of customer surveys was vast and from survey responses came more quality based actions.

Tony Hines: 16:26

The history of TQM dates back to the principles established by Frederick Taylor in his book on the principles of scientific management, and that was done back in the 1920s and they began applying the concept of statistical process controls. Taylor was a great believer in using the numbers to establish the facts. The time itself. Tqm Total Quality Management was coined by the Naval Air System Command in the 1950s to describe its Japanese style management approach to quality improvement, and it's a method of continuous improvement to establish quality. So let's turn our attention now towards some of the benefits that Total Quality Management can bring to the organisation.

Tony Hines: 17:08

It can bring a number of benefits. We began the episode talking about the failures of some companies, with the numbers of recalls and, of course, Boeing with its bolt problems on the Alaskan Air line flight, which resulted in the door blowing out on the plane. But the benefits go beyond that to improving quality per se. It can also reduce cost, improve profitability, because if you start to look at processors and examine them carefully, you might realise that some of those processors are not required and actually add cost but not value to the customer. So basically, it aims to manufacture zero defect products or services and it will, through the processors of employing TQM, no doubt find ways to reduce cost and improve profitability.

Tony Hines: 17:59

It also facilitates productivity. Cost reduction means increased productivity. Productivity implies that maximum output with minimum input is achievable. You can look at wastage, rework and scrap and how they're being handled, and you can think of ways to stop waste, reduce the amount of rework and limit the amount of scrap materials. Tqm also improves customer satisfaction. Customers have more trust if they know that the business they're dealing with is keen on quality and takes steps and measures to achieve consistent quality. So if you know what your customer needs and expects from you, you can establish quality processors that ensure every time that that happens. It also gives an opportunity to employees in the organisation where TQM is applied, because TQM lifts morale and it motivates people, and the communication processors involved have to improve to do that so that people understand what's required of them inside the organisation. So it brings with it many benefits.

Tony Hines: 19:07

So what can you do if you want to set about the task of becoming this quality organisation, employing TQM in your organisation. Well, you have to begin with the vision. What do you want to achieve? What values do you operate by and have a clear purpose for what this organisation is about and what you want to achieve with your total quality management processes? Some people also talk about critical success factors and they say the critical success factors can help organisations focus on the things that help them meet those objectives. To move closer, to achieve the mission, the vision, the purpose, you need to develop measures, metrics that can understand what's going on in the organisation. And once you have the critical success factors, you can begin to think about what those measures ought to be and you can monitor and evaluate progress. It's important to establish a TQM team that has the responsibility for TQM and can set the goals. They can be the champions for the program, spreading the word and inculcating a culture of TQM in the organization. Tqm ought to become self-managing throughout the organization once you begin to establish it, train the employees and create a culture of quality. That's important. It needs senior management to be behind the process of TQM for it to succeed and focus on this continuous improvement model to establish what the situation is, identify and eliminate waste, reduce cost and improve quality, and keep tweaking, continuously adjust as you find out more, and so that's really what it's about.

Tony Hines: 20:53

Toyota was a pioneer in implementing TQM in the automobile industry. Toyota's TQM system is based on the principle of continuous improvement and customer satisfaction. They encourage their employees to identify opportunities for improvement and change, to become more efficient and reduce waste, and this focus on continuous improvement use tools such as the Plan Do Check Act, which we've mentioned, which was the Deming cycle. It's a four-step process for continuous improvement and it was successful in improving the quality of its products and services over a number of years. Toyota's a special case, so they're worthy of considerable discussion.

Tony Hines: 21:39

In the development of TQM and if we look at what the company did back in 1949, the Toyota Motor Corporation began the journey into TQM with its adoption of statistical quality control. The company won the Deming Prize in 1965 and the Japan Quality Control Award in 1970. They refer to it as an unchanging principle of customer first, and the term KAIZEN was used by the corporation to identify continuous improvement. It required total participation. They introduced the Creative Idea Suggestion System in 1951. This is a kind of suggestion box but goes beyond the suggestion box, encouraging employees to take part in what they refer to as mono-zaguri, conscientious manufacturing, and they made substantial contributions to the company's development during that period.

Tony Hines: 22:36

The basic concepts of TQM and problem solving using the KAIZEN process, the continuous improvement, became rooted in everything they did at Toyota, and so they established quality circles or the predecessor, at least, of quality circles back in November 1962, where team members would sit around in a circle to discuss developments and issues in the process of manufacture, and that way they could identify faults, problems and put them right. In 1968 they launched the Zero Defect Campaign. So this is the beginning of Six Sigma, and they established the Toyota Quality Management Award in 1969. Throughout the 1970s this work continued and they had a very keen management team led by Executive Vice President Shochiro Toyoda, now the honorary chairman, and he won the Deming Prize for Individuals in 1980. The quality circle, toyota rewards, was established in 1980 and so it's Right throughout the company.

Tony Hines: 23:41

It's in the company's DNA this idea of quality. Toyota is all about quality and it continues to this day and Toyota is a very innovative company and you have to believe, I think, that the innovation stems from the notion of this embedded quality. In 2000 they established management quality advanced system to raise workplace management quality. This is known as mast. They've got TQM committees. They still have the quality circles in place. They do everything they can to establish quality.

Tony Hines: 24:17

And when we think of innovations, one of the current innovations is the establishment of the solid-state battery technology, which in the next few years is likely to change and revolutionize the electric car industry. And so, right from those early days, focused on quality, led to innovation, led to more quality, continuous improvement. It's at the center, it's at the spine of the organization. So if companies want to get back to the quality in the business, they really need to put investment in and time in and follow the established principles that successful companies in the past have followed. This may be a case of relearning the past in some of those companies experiencing problems right now with defects and below par products and services. So I hope this reminder has helped you revisit some of the ideas and in the notes to the episode I'll put some further reading in case you want to follow up on some of the ideas discussed. Well, that's it for this particular episode on quality Revisited. I'm Tony Hines. You've been listening to the chain reaction podcast and I'll see you next time. So bye for now.