Thursday, March 02, 2006

Quality Plateau or Quality Ceiling?

There is an interesting quality article in today's issue of USA Today. The article is written by James R. Healey titled "Consumer Reports sees quality plateau". In the latest Consumer Reports testing and car owner surveys, the top reliability awards all go to Asian brands. In fact there are no Detroit models in the top 10. The top 10 are all Japanese brands.

That really did not come as a surprise to me based on past reports. But what surprised me the most were the comments by several individuals including Anne Stevens, COO of Ford Motors North and South American operations. These comment lead me to the conclusion that domestic car manufacturers, namely Ford, have already lost the battle against the Japanese manufacturers!

The biggest problem I have is the mental attitude that we are as good as we can get and that "it's impossible to manufacture a product as complex as a car or truck with zero defects". With this attitude at the top how the heck can they improve? I see the words of Ms. Stevens that despite the fact that they (Ford) "have reached a difficult level to break but that doesn't mean don't keep trying", but I sense that even she does not believe they can really get any better.

On top of that, Consumer Reports adds their opinion based on the results that "It could indicate that the most reliable new cars have reached a practical limit as to how trouble free they can become". Another opinion from Jim Hossacks, AutoPacific consultant, states that "the cost benefit ratio might have maxed out and improving much more would cost the manufacturer more that its worth. It might not be a technical issue but a practical, economic limit".

I believe that they are collectively selling out to the notion that we-are-as-good-as-we-can-get. They must not truly understand the power of continuous improvement and lean principles along with poka-yoke! Do you really think that Toyota is saying that they can not improve?

I love data so let look at some of the facts presented in this article. In 2002, the Japanese car manufacturers on average posted 15 problems per 100 new vehicles. In 2006, they improved to 12 problems per 100 new vehicles. That is a whopping 20% improvement! Over the same period, Detroit car manufacturers were stuck at 17 or 18 problems per 100 new vehicles. No improvement. WOW!

Sounds like Ford could reasonable expect to meet at minimum the Japanese level of four years ago (15 problems) for a roughly 16% improvement. It is possible! Mentally, you must accept the possibility to make it happen. That should be Ford's first target. No excuses, just make it happen.

As for zero defects, it is possible! Just like breaking the four minute mile barrier, for years it was universally believed that it was humanly impossible. After the barrier was broke, other runners started to run the mile in under four minutes soon after. The same goes for zero defects, the barrier will be broke and most likely by a Japanese car manufacturer.

2 comments:

curiouscat said...

I agree with your concept but not the idea that zero defects is really achievable. Though I do believe it would be possible in a system when defect was operationally defined and did not change over time (and that operation definition did not include opinions of customers).

I think aiming for continuous, never ending improvement is better than aiming for zero defects. And I think even Toyota still has quite a long way to go to be what I would consider defect free (the whole car ownership process is within what I consider not just the manufacture of the car).

I believe expectations rise as the delivered goods and services have fewer defects and then things that would not have been called a defect will be.

Chet Frame said...

This is a great post, Mike.
Elephants are trained when they are young that they can't break the chain that holds them to the tree, and when they get older they are tethered by a rope and a stake in the ground. Perhaps that is what has happened to the U.S. Auto Manufacturers. They haven't pulled on the rope, or pushed on any of their perceived barriers.