Thinking Thursday – Toyota’s Recall A Byproduct Of Lean?

My friend Mark Graban is on Karl Waddensten’s “Lean Nation” radio show toay February 11th at 4:00 pm – 5:00 pm EST for a live show to talk about Lean in hospitals an talk about his book “Lean Hospitals”. Please call in to the show 401-437-5000 or 888-345-0790.

Thank you to those who responded to yesterday’s wiki. If you didn’t get a chance or want to expand on your thoughts please post them to the comments.

Yesterday’s wiki post:

“Is Toyota’s Recall A Byproduct Of Lean?”

The wiki is a divergent wiki. A convergent wiki is looking for 1 “correct” response to a
question. A divergent wiki just asks give me all the answers you can think of for the question.

I’ve also launched a lean wiki site http://leanway.wikidot.com/ so please add articles and join in.

Responses:
1)I realize the question isn’t framed the best but this is honestly the way it is viewed in many circles. I say that Toyota got away from it’s lean principles of being close to the customers. I would argue that the same brake pedals across different product lines is not lean for the same reason we see now. The defects are not on one product line but several.

2)I wouldn’t call it a byproduct…
Pulling an andon cord is normal way of acting in Toyota. They pulled it late, that is the main problem. They didn’t react as expected from someone who teaches managerial practices, principles and culture in the last 30 years or so.
I think they are coming back to ground right now and back to their basics. They probably considered themselves a little bit above the others in the last years, when they had become the n.1 and expanding all over the globe. And they’ve lived on their laurels thinking that nobody can beat them.
Now they have understood their mistakes and I wouldn’t be surprised to see them dig very deep into themselves and come out much stronger then before, with new, updated, operating system in place which will teach us and give us advice in the next decades…

3)I don’t think so.
On the contrary, I would suggest that one major premise of lean is to make abnormality obvious in real time. That certainly didn’t happen given the scale of this problem across models and time.
Some people have suggested that there are value added function in the product development activities that didn’t happen. That would seem to be a fair criticism given the facts as they have presented themselves.
Finally, I would suggest that no ‘ideal paradigm’ or model would produce the result that we have seen. Therefore, if this IS a ‘by product’ of lean then the model needs to change in a way that puts in place countermeasures against this happening again. So if it was a by product of lean then the system will be changed and it won’t be a by product tomorrow and therefore can’t be used an arguement against lean. Lean by definition improves as new stuff is learned.

4)I wouldn’t call it a byproduct…either. Maybe, we are too infatuated with heroes, i.e Tiger Woods.

I think we put Toyota on a pedestal and gave way to much credit for everything good that happened from Lean. Like every methodology or even golf swings, they are modeled from the best in the world at the time. We forget that they are just models. These models need to be adjusted and/molded to our culture or as in golf our physical stature.

There will always be mistakes that are found after products are put into use. Though we have decreased these odds, it still will happen. When you are #1 in the world these mistakes are magnified and all areas will be overly scrutinized.

I think Bruce sums it up very nicely in his last paragraph. It may be a year or two before we know but if the TPS aka Lean is an effective methodology it will become stronger as a result.

5)No Toyota’s situation is no a result of Lean. I think many of us would agree that Toyota lost is way in recent years while pursuing the #1 market position. I am not sure that really has bearing on this either.

Lean Thinking is not an absolution. No management system guarantees no problems. Lean Thinking is really a problem solving strategy by engaging the entire workforce. This approach as we have experienced greatly reduces weaknesses with organizations by attacking problems. It has a strong backbone in customer focus.

There are no guarantees in life or business. I believe Lean Thinking has been proving help organizatin be more effective in terms of safety, quality, delivery, and profitability.

Lean Thinking certaintly is not the cause of a defect. Whether in one product line or not is really a question of risk and exposure. To reduce risk you must out more effort to reduce exposure.

Lean Thinking also does not eliminate 100% of all problems because as you solve problems new ones can surface. The key to success is to constantly learn to solve problems in a timely effective mannner. I am sure Toyota will learn the most they can from this situation and be better off for it in the long run.

6)No, I agree with Tim. Toyota’s problems are not a by-product of Lean. I believe, and this is only opinion since I’m not in any way an expert on Toyota or Lean, that Toyota’s problem is that they stopped being Toyota.

What I mean by that is Toyota seems to have strayed from a core principle – respect for humanity. Toyota seems to have become what they (or really, we) said they were not – a Detroit automaker who wanted more and more market share at the expense of quality.

When did this begin? Hard to say, but problems with Toyota vehicles – serious problems in appreciable numbers – started in the late 90’s and continue today. Not coincidentally, again in my opinion, is the fact that a Toyoda family member was not running Toyota from 1995 until this past June.

Are Toyota’s problems a failure in leadership under the collective watches of Hiroshi Okuda, Fujio Cho, and Katsuaki Watanabe? Again, I don’t know, but would they have run the company differently if there names were Toyoda?

7)Did you ever see the movie,, “Collateral Damage”? Toyota cared about safety when they were making a name for themselves, but when it became about being #1… it became a game about numbers. Sadly, I bellieve that they weighed their options, and few people dying, and a few lawsuits was decided to be the more fiscally responsible thing to do 🙁

8)Toyota was forced to cutback on costs as part of its growing orientation towards stock market performance – maintaining net earning/net income/profit performance especially considering severe drop in consumer sales that 2008-09 automotive industry absorbed in general…

Keep in mind – avg. seasonally adjusted FY sales for automotive was at 8 million units in 2008 (earlier) and fell down to lows averaging around 5 mill. units thats 37-40% drop in auto industry as whole. In securities – Toyota (NYSE:TM) held around $90-$100/share, in first half of 2009 that value fell down to $60 pps (33%-40% devaluation correlated to sales decline).
Find data here at WSJ:
http://online.wsj.com/mdc/public/page/2_3022-autosales.html?mod=mdc_h_econhl

http://www.google.com/finance?q=NYSE:TM
If you look at 1yr graph of Toyota- read the series of news feed company made in national media (cutback in production/ halting India’s 2nd Factory launch/Repurchasing Stocks/Issuing massive amounts of CDO (collat. debt obligtns.) & bonds (all debt issuances) to raise funding. I would bet this is key turning point where Toyota made cutbacks in TQM (quality mgmt.) and loosened quality controls to suppliers such as CTS Corp. that made pedals for recalled models. Basically supporting Laura’s theory – their huge fixed overhead costs and cost of maintaining massive infrastructure of 17% market share company was tumbling with economy (stock market) that was cut basically in half in less than a year.

We’ll never know, but we will know how a Toyoda reacts to this crisis. Akio Toyoda has a long road to hoe.