The Toyota Recall: In Defense of Lean

 

Why Lean needs defending

In case you haven't heard, Toyota recently had a really big issue requiring a massive recall. Since Toyota is closely associated with the Lean process, some pretty reputable folks are taking it a little too far and hinting that Lean could be part of the failure. This is a mistake for many reasons, but most importantly misses several key points of what Lean is and what it isn't. It also touches on a few of my favorite methodological pet peeves. Before we get to that, let's start with the basics:

Toyota doesn't use Lean

Toyota uses TPS: the Toyota Production System. It significantly predates Lean, which was coined in the late 80s, derived from a graduate thesis recognizing the unique Toyota processes. The TPS has much in common with Lean (since Lean was based on TPS), but they're not the same thing. Early Lean literature was focused primarily on systematic improvement to reduce waste at the same level of quality; quality was not explicitly a Lean goal even though Toyota included Deming's Total Quality Control techniques into TPS in the 1960s. TPS includes a number of things that Lean doesn't and for a very simple reason -- TPS has been custom fit to the Toyota corporate strategy over the last 50+ years. Lean can help pretty much anyone do anything so you're going to run into lots of edge cases where it simply has no opinion. TPS is pretty specific about building cars, and it *does* include quality control measures, so what happened?

Processes only work when you use them

According to an Economist article several months ago, "People inside the company believe [earlier] quality problems were caused by the strain put on the fabled Toyota Production System by the headlong pursuit of growth." In the same article, the Economist points out that Toyota sales were down nearly 24% in 2009; it does not take much imagination to guess how much management and the folks on the line want you pulling the andon cord for something less than obvious.

But assuming that the all-too-easy-to-believe executive pressure or line laziness isn't fair to Toyota. Given that the National Highway Traffic Safety Administration (NHTSA) conducted 6 separate investigations which failed to find the issue, the issue is clearly more complex than a simple assembly line issue.

Quality control can't end once the product has been delivered

One pet peeve of mine is that it is very difficult to tell how good something is until after you own it for a while. We need something that provides a broader view of quality than narrowly defined, short-term surveys that can't tell the difference between bad cupholders and cars that break down. There are parts of the car that matter a lot more than others, and to optimize your quality spend, you must target these areas appropriately. Catastophies are sure to occur, and to resolve them we do not need public apologies, noise in the press and mass speculation, we need systematic increased focus on the areas that matter and methods of measuring accountability.

The very worst thing that Toyota can do -- and I doubt they will -- is what quality expert and statistician George Box calls "Management by Disaster" where one disaster leads to a chain of inefficiency without addressing the core problem. Accoring to Box, this overreaction to unlikely events happens when:

• Systems are changed in response to occasional disasters,
  
• by people with little direct knowledge of the problem, and
  
• never checked to see whether or not they solve the issue
  

Luckily, most data driven organizations avoid such mistakes, and having a well established process like TPS provides a foundation for enacting effective change and improved measurement to provide meaningful accountability. Processes like Lean, TPS, Six Sigma and others were designed to use defects as input to improve the process. While the tragic deaths of the past months provide a very public and painful lesson for us, it should also remind us of why we have process in the first place. To be sure, someone (probably lots of people) screwed up, but terminating them won't stop this from happening again. Improvement for anything complicated happens only with careful and systematic change and we should not limit our scope just to Toyota. We must demand more precise and meaningful measures across the industry rather than meaningless apologies and finger pointing between Toyota and its suppliers.

Oh, and...

If you're wondering what happened to the guy that wrote the graduate thesis that coined lean... he was recently named President of Hyundai America, one of the only car companies that saw positive sales growth in the 2009 recession. This and his prior role as VP of Product Development and Strategic Planning should remind us that lessons of effective systematic thinking apply to a lot more than just building cars and writing code.