From Japan with love (Memories of Visit to Toyota)

This is quite an interesting story, with roots going back to the 1950s. Edward Deming was an American industrial engineer and statistician, and his research found, in short, that anyplace you can make a quality improvement to a manufacturing process or part, you should do so, no matter how small or seemingly inconsequential (assuming the cost is not prohibitive). For example, if you find that using a different kind of rubber would extend the life of a bushing by 5%, you do so. Similarly, if you can change a manufacturing process such that when a problem is detected on the line, you stop the line and fix it right then and there, rather than letting the car continue and hoping that the testers at the end of the assembly line catch it. Repeat that thousands of times with the thousands of parts that go into a car, and eventually you have a much more reliable car, since you’ve built quality in at the most granular level. This applies to all parts suppliers as well as the auto manufacturers themselves.

When he brought his ideas to the American Big Three automakers, they basically laughed him out of Detroit. They preferred to seek out the big, glamorous, highly visible “improvements,” such as stuffing a bigger engine into a car rather than preventing the wrong front end being installed in the first place, or a bolt not being torqued properly, etc., etc. Only a supervisor or above had the authority to halt the assembly line for any reason, and if they did they risked being terminated on the spot. Acceptable reasons might include severe personal injury, but little else. In contrast, virtually anyone on the assembly floor at Toyota was empowered - and expected - to halt the line if they detected a problem with a part, an assembly, or whatever. This overall philosophy became known in Japan as Kaizan - continuous improvement.

After Deming left Detroit, he went to Japan, where the manufacturing base was still largely bombed out from WW2 and struggling to rebuild itself. The Japanese understood the power of his ideas and embraced them wholeheartedly. While I am only discussing the automotive industry, his ideas were adopted across Japanese industry. To this day he is revered as a manufacturing pioneer in Japan, while few in the US have any idea who he was.

By the mid-1970s the quality/reliability gap between US and Japanese manufacturers was apparent and widening. GM partnered with Toyota to build cars in Fremont, CA, and this was known as the NUMMI project. GM thought that they could buy the secrets to Toyota’s manufacturing prowess, and Toyota would get better access to US markets by building some of their cars in the US, using American workers.

For a wide variety of reasons, largely involving GM’s corporate arrogance, abysmal supply chain management, and workers’ distrust of management, it was a dismal failure for GM. They learned the techniques just fine, but they could not implement them successfully because of their overall toxic culture and management practices. Toyota, on the other hand, got exactly what they wanted. So, while the American carmakers continued to build craptastic cars that would start to fall apart from the moment they left the dealer’s lot for decades to come, Toyota and Honda were building cars that would easily last 100k miles or more, with minimal mechanical issues.

There is a lot more to this story, but that’s the basic outline.-Jayadeva de Silva