March 2010 | Commentary | In Perspective

I Brake for Quality

Tags: Manufacturing

When a network news anchor said Toyota's problems were good news for U.S. automakers, it was irresponsible. And it missed the point.

It's reassuring to hear Toyota President Akio Toyoda explain to the U.S. Congress that maintaining high quality standards is not easy. The important part of the message coming from the company that has served as the benchmark of true quality for decades is this: not only does continuous improvement require continuous effort, so does maintaining the status quo.

Whether the result of growth, contraction, or inattention, any slip in quality—real or perceived—can condemn you in the market, overshadowing repeated cases of uncommon valor that exceeded expectations or overcame obstacles. Today's supply chains not only depend on consistent high quality, they wouldn't be possible if quality wasn't the rule rather than the exception.

In addition to being a moving target, quality lives in many houses. Your end customer typically sees the result, not the supply chain that delivered it. Toyota customers probably don't care whether sudden acceleration comes from their car's computer, a component in the accelerator pedal, or a floor mat. They just want a car that is safe to drive.

In the same way, your customer doesn't care that a shipment was late because someone at a loading dock in Vietnam smeared an entry on a form and a customs official down the line held the shipment for two days while new paperwork was forwarded. Nor does your customer care that the carrier had a mechanical problem with a trailer and had to wait 16 hours for a repair.

If reasonable best practice dictates electronic data entry at an origin terminal to avoid illegible entries on critical customs forms, that sounds like a good baseline requirement for all partners in that supply chain. And if carriers are required to submit basic insurance and safety records, and report on key performance indicators (KPIs) such as on-time pickups and deliveries, part of the due diligence in reviewing bids and contracts should be actually reading those reports. And if the KPIs don't already include a reason for a service failure, it might be time to add that to the request for proposal. When maintenance keeps appearing as a cause for a missed appointment, it's well past time to visit that carrier and have a look at its equipment and facilities.

That's on the logistics side. Every company from Boeing to Toyota knows that flawless delivery of faulty parts still spells supply chain failure. To avoid adding inbound inspections (and the time, space, and personnel in the distribution center to perform them), all members of the supply chain management team need to commit to quality and share data. When a logistics executive sees on-time performance slipping or damage claims increasing, it could be a sign the supplier is cutting corners. That could be an early warning that materials or assembly compromises might be coming.

It's time to commit to total quality and zero defects. Where have I heard that before? Oh, that's right. It was at Toyota.