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(Toru Hanai/Toru Hanai/REUTERS)
(Toru Hanai/Toru Hanai/REUTERS)

Barrie McKenna

How Toyota strayed from the quality-control path and lost its way Add to ...

Before there was a Toyota Way, there was the W. Edwards Deming way.

If there is an enduring lesson in Toyota Motor Corp.'s recall fiasco, it is that the Japanese auto maker strayed far from the core teachings of Mr. Deming, the influential American statistician and quality-control guru.

Mr. Deming's genius was applying statistics to quality control. He would painstakingly record product defects, figure out why they happened, work diligently to fix them, track how quality improved, and then keep refining the process until it was done right.

It is a production model that would not have tolerated for long the spike in complaints from Toyota owners about sudden acceleration that began in 2002.

Mr. Deming refined his ideas into what he called "total quality management," which later became the foundation of Toyota's now famous Toyota Production System of just-in-time manufacturing. TPS emphasizes consistently high quality, a relentless drive to eliminate waste and continuous improvement.

Mr. Deming, who died in 1993, played a key role in moulding U.S. manufacturers into a powerful weapons-production machine during the Second World War.

But it was in Japan that he made his mark. In the booming postwar years, U.S. manufacturers were far more interested in mass production than quality. So Mr. Deming took his ideas to war-ravaged Japan, where he found a receptive audience among Japanese manufacturers. Japan already had a tradition of hard work and attention to detail, and with shortages endemic, eliminating waste quickly became a national mantra.

Mr. Deming spent extended stints in Japan in the 1940s and 1950s, initially working for the Allied command in Tokyo, and later as a consultant, teaching Japanese executives, managers and engineers about quality control.

Even today, he's better known in Japan than in his home country. The Union of Japanese Scientists and Engineers still awards an annual Deming Prize to Japanese companies and individuals who make significant contributions to quality in manufacturing.

Toyota executives might be wise to recommit themselves to those same ideals.

And they could start by reading Mr. Deming's seminal 1986 book, Out of the Crisis. His 14 points of management - a handful of which are summarized here - remain as relevant today as they were when he penned them:

Get away from mass inspections by building quality into a product.

Stop awarding business based solely on price, and instead focus on minimizing total costs, choosing suppliers based on quality and trust over the long term.

Constantly improve production and service.

Help people and machines and gadgets to do a better job.

Drive out fear, so that everyone works effectively for the company.

Break down barriers between departments so that people in research, design, sales, and production work as a team, enabling them to better foresee problems.

Poor quality and low productivity can't be beaten with zero-defect slogans and targets because the solution lies in the system, not the work force.

Remove barriers that rob hourly workers of their right to pride of workmanship by focusing on quality rather than sheer numbers.

Remove barriers that rob managers and engineers of their right to pride of workmanship by abolishing objectives-based merit ratings.

Toyota now acknowledges that it lost its way, focusing too much on growing big rather than building high-quality cars.

Toyota unabashedly set a goal of overtaking General Motors as the world's largest vehicle manufacturer, and it succeeded. Last year, it produced nearly 10 million cars, up from 5.2 million in 2000. Over that period, Toyota added 17 new plants around the world.

But when the first inkling of a problem emerged, Toyota executives apparently weren't listening or didn't hear. Mr. Deming's teachings had apparently given way to other less-helpful traits, including a reluctance of lower-level managers to deliver bad news up the command chain. The company's notorious flexibility had slipped into a reluctance to acknowledge failure.

Toyota isn't alone in this. Managers everywhere could learn a thing or two, or 14, from the man who helped Japan become a global manufacturing powerhouse.

The lesson of the Toyota recalls is not that Mr. Deming's Japanese model is an anachronism. It may be more relevant than ever.


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Follow on Twitter: @barriemckenna

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