TQM

The Top 5 Automotive Quality Management Failures of All Time

According to J. D. Powers and Associates, the initial quality of new vehicles improved five percent in 2012 over last year’s numbers. But that doesn’t mean that quality issues are a thing of the past for automakers.

You only need look no further back than the recent woes of Toyota to realize that although overall automotive industry quality continues to improve, internal failures of automotive quality management systems within an organization can still drastically affect a brand’s reputation and thus its sales.

The industry has been plagued over the years with quality management system shortfalls that have lead to the deaths of hundreds of people and the recall of millions of vehicles for safety-related issued. In many cases, profits have been the driver behind quality failures in the industry.

Since quality is a driver of safety, it stands to reason then that in order to improve safety and reduce the number of recalls mandated by the NHTSA and thus the reputation of the industry, auto industry leaders must re-evaluate their commitment to quality, and look back at the industry to find similar failures and avoid repeating them.

The Top 5 Automotive Quality Management System Failures

1. Ford Pinto and Mercury Bobcat (Model Years 1971 to 1976)

In order to compete with burgeoning Japanese imports, Ford Motor Company mandated the production of a car that would cost no more than $2000 and weigh no more than 2000 pounds. The result was the Ford Pinto and its cousin the Mercury Bobcat. As the car neared production, engineers discovered that it failed rear end collision tests miserably due to the location of its fuel tank between the rear bumper and rear axle. Despite being made aware of the problem, Ford management decided to leave the car as is, electing to bear the cost of any lawsuits versus spend the $11 per car to fix the problem. In 1978, after over 100 deaths caused by fuel tank fires were reported due to rear end collisions, the NHTSA recalled 1.4 million Pintos and Bobcats to modify the fuel tank. Ford’s reputation suffered terribly, being seen as the company that put profit ahead of safety, and drove even more buyers to imported cars, the purpose for creating the Pinto from the start.

2. Various General Motors Models (Model Years 1997 to 2003)

Although it had been producing and heavily utilizing its 3.8L V-6 engine for decades, General Motors was forced to recall 1.5 million vehicles due to engine fires that could ignite when oil dripped onto the exhaust manifold during hard braking conditions. An oil leak in the engine could catch fire when exposed to the hot manifold, melting a plastic spark plug wire retainer located directly overhead. The plastic can ignite, resulting in a full-blown engine compartment fire. The NHTSA issued the recall in 2009, six years after the last model was produced. Ironically, General Motors is recently recalled almost half a million Chevrolet Cruze’s for a very similar problem.

3. Ford Explorer (Model Years 1991 to 2001)

Ford owed much of its profitability in the 1990s to the popularity of it’s SUV icon, the Ford Explorer. But it was quickly discovered that the Explorer was top-heavy, tending to roll over during emergency handling maneuvers. The problem was not enough of an issue in and of itself to cause Ford to re-evaluate the Explorer. However, many were outfitted with Firestone tires, which had their own tread separation issues. When combined, the unstable vehicle and faulty tires lead to the deaths of over 200 people. Ford recalled Explorers in 2001 to replace more than 6.5 million faulty tires. Despite the fact that the Explorer was redesigned in 2002, it never regained its dominance in the SUV marketplace.

4. Ford Various Models (1988 to 1993)

In 2002, Ford was court-ordered to recall 7.9 million cars and trucks due to a faulty ignition module. The module’s location on top of the distributor would cause it to overheat and fail, causing cars to stall and lose control of steering and braking. Ford was aware of the problem, but rather than relocating the module to a cooler location at the urging of their engineers, they chose instead to beef up the module to make it last just long enough to exceed the warranty period, forcing owners to bear the cost of replacement. The module had been installed on over 22 million Ford cars and trucks, but by the time the recall was issued, only about one-third of them remained.

5. Toyota Various Models (2005 to 2010)

Removable floor mats were identified as the cause of Toyota’s recall of 9 million cars in the U.S. The floor mats were found to move and wedge the accelerator in position, causing it to stick and lead to a potential crash. When the recall was announced, 52 deaths had been attributed to the issue. Despite proactively cancelling the sales and production of the recalled models, Toyota’s reputation as a quality leader was damaged.

There have been many other image-damaging recalls over the years that did not make the list but deserve some notation.

The Runner Ups

General Motors’ X-cars were recalled 13 different times over the course of their short two year life for a variety of safety and mechanical issues.

The Plymouth Volare / Dodge Aspen were recalled a total of 8 times, and were notorious for premature body rusting and mechanical failures.

And the Audi 5000, despite much lower total recall numbers, suffered the same flaw as Toyota with a faulty floor mat causing the accelerator to stick. The drop in sales due to bad press from the “unexpected acceleration issue” almost caused Audi to close its doors.

In all of these cases as well, the reputation of the manufacturer suffered, and it has taken them years to recover from their shortcomings.

 

Building Quality Management into Your Systems

Total quality management is a formalized system for constantly improving customer satisfaction by uniformly reducing defects and improving the quality of the products you make.

TQM capitalizes on the involvement of management, workforce, suppliers, and even customers, in order to meet or exceed customer expectations through your quality management system. By reviewing the fourteen points made famous by Deming, it’s easy to see what total quality management entails:

  1. Create constancy of purpose for improving products and services.
  2. Adopt the new philosophy.
  3. Cease dependence on inspection to achieve quality.
  4. End the practice of awarding business on price alone; instead, minimize total cost by working with a single supplier.
  5. Improve constantly and forever every process for planning, production and service.
  6. Institute training on the job.
  7. Adopt and institute leadership.
  8. Drive out fear.
  9. Break down barriers between staff areas.
  10. Eliminate slogans, exhortations and targets for the workforce.
  11. Eliminate numerical quotas for the workforce and numerical goals for management.
  12. Remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit system.
  13. Institute a vigorous program of education and self-improvement for everyone.
  14. Put everybody in the company to work accomplishing the transformation.

Using these principles as a standard of measurement against your existing processes within the business can help you then build quality management into your work systems as well.

The areas to focus on when building TQM practices into your existing systems can be broken out as follows:

  • Customer Focus – Make sure all of your methodologies, changes, and improvements are focused on enhancing the customer experience. If the customer does not benefit in some way from a change you’re about to make or a process you’re considering improving, don’t do it. If it adds no value to the customer, it adds no value to the business.
  • Tools and Methodology – Develop and implement tools within your business that enable employees to quickly find and isolate non-conforming materials. Ensure that there are procedures in place to find and fix the source of the defects permanently to remove future failures from the process.
  • Continuous Improvement – Quality procedures and manufacturing processes should undergo a process of continuous review and improvement. This could be measured by the number of defective products made, the number of products made within a percentage of the control limits, or some other similar metric based on your company’s standard. Before this can begin, however, a benchmark must be established against which future improvement is measured, with the mark continuing to increase as quality is improved.
  • Employee Involvement – Your company must empower employees to find and correct quality issues as they arise on the production floor or in the test lab. This should be a formalized system to provide feedback to the employee once changes are made. Any employee in your organization should have the ability to address immediate issues as they arise without fear of reprimand or backlash.
  • Company Culture – You must establish a culture within your company that improves the ability of employees work together to solve quality issues. This can be in the form of regular team meetings to seek input, formation of a quality improvement oversight committee or task group, or having a quality leader identified within each group of your organization to get and share quality-related issues with others.
  • Executive Management – Top management owns the total quality management process. You must believe in it, and make sure all of those around you believe in it as well. Quality is driven from the top down, and if employees see that their management is not committed to quality, they will not commit to it either. The environment within your company should breathe quality to ensure success.
  • Training – Your employees should constantly receive training as it relates to quality. This also includes refresher training on job-related tasks and procedures, as they tie directly back into quality production as well.
  • Decision Making – To thrive in a quality environment, decisions about quality should be made based only on measurements. There should be no gray areas existing within the company. If it is within the written specifications, it is acceptable, if it is outside of the specifications, no matter how slight, it is non-conforming. Only when quality is handled in this way can the continuous improvement process work and be effective as you tighten your control limits.

How Can TQM Make Your Business More Successful?

Why should you implement a Total Quality Management (TQM) program to achieve quality assurance?  There is one simple answer; when properly planned and implemented TQM will provide substantive financial benefits to your business and add to the bottom line.  Let’s consider just two examples of how using Total Quality Management can help your business. 

Use TQM to Improve Customer Satisfaction

A primary focus of TQM and most Quality Management Systems is to improve customer satisfaction by having a customer focus and consistently meeting customer expectations.  Customers are almost always satisfied when their expectations are met. When they expect a certain product or service, and you delivere it without problems and at a fair price, you’ve built a solid customer relationship.  Happy, satisfied customers become repeat customers and they provide word-of-mouth marketing – the most powerful kind. 

There are three Total Quality Management components that work toward achieving customer satisfaction:

  1. it requires that your business understand what customers typically expect in a field, industry, or product line,
  2. it ensures your business has the expertise and the resources to consistently deliver the expected product or service, and 
  3. it emphasizes the need for your business to clearly communicate to the customers exactly what you will deliver to avoid misunderstandings. 

TQM provides the quality assurance that customers will get what they expect, as well as a process for managing unsatisfied customers, make needed corrections and prevent similar reoccurrences.

Every business owner and manager knows the importance of satisfied customers, and how expensive it is to find new customers compared to keeping current customers.  Business research clearly shows that there is a direct correlation between satisfied customers and revenue.  If your business doesn’t have a clear path to creating satisfied customers, then it can benefit from TQM.

TQM Improves Business Efficiency and Effectiveness

While focusing on the customer is critical to success, it isn’t the only factor.  A business can go broke sparing no expense to make customers happy.  So not only does a business need to satisfy customers, but it needs to do it in a way that is.  A business also has to look within and understand its own operations, another important role of a quality management system.

Total Quality Management places a focus on internal processes, including

  • How processes align to produce desired outcomes to satisfy customers
  • How consistently processes deliver desired outcomes (effectiveness)
  • The productivity of a process compared the resources used (efficiency)

Being able to consistently produce desired outcomes without wasting resources like time, material, and money is critical for a business to make it over the long haul.

TQM Provides Long Term Competitiveness

Being able to satisfy customers while operating effectively and efficiency is truly the recipe for financial success and stability. If you achieve these quality assurance goals that are part of Total Quality Management, then you will likely be in business for a long time to come.

Notice that with TQM, quality is not just about a product or service meeting (somewhat arbitrary) requirements.  It is about how the whole organization operates to understand customer expectations and competitively deliver customer satisfaction.  

No Easy Task

It is important to remember, however, that TQM takes full commitment from management.  Simply tossing the concept down to employees and saying “do this” just adds an extra burden on workers without much benefit from their efforts.  Organizational members take their cue about what is important from management.

Only through top management commitment and involvement does TQM take hold and become part of the organization’s culture.  Once ingrained as the way of doing things, the business can reap the benefits of TQM – including a healthier bottom line.

Why Bother with Total Quality Management?

With so many other issues to deal with in this slow economy, why should a company bother implementing Total Quality Management (TQM)?  Isn’t TQM an old idea that has outlived its usefulness?

Why bother breaking down each process and creating a lot of documentation?  With virtual offices, webinars and go-to-meetings, why bother learning retro quality management tools like brainstorming, fishbone diagrams and statistical process control (SPC)?

A Brief History

The history of Total Quality Management goes back to the 1920’s and the creation of the first statistical chart and sampling vs. 100% inspection.    In the late 1940’s, Dr. Edwards Deming brought his knowledge as a statistician to the Japanese.  He was first invited to help with their census tracts and in 1949 taught them statistical methods.  The Japanese were interested in product improvement to gain a greater share of the export market.  In addition to statistical process control, he introduced a new management style, with emphasis on teamwork and redirecting blame for poor quality from the worker to the process.

Joseph Juran also traveled to Japan in the mid 1950’s.  He expanded on Demings’ work by focusing on the cost of quality with identification and cost of quality measurements.  Philip Crosby followed in the 1960’s with his “zero defects” philosophy, which emphasized employee involvement and awareness in the quality process.  All these early quality initiatives brought workers from the production lines to the table with management to participate in quality planning and improvement.

TQM was embraced by industry and service organizations alike in the ‘70’s and ‘80’s to improve product and service quality, involve employees in the process and improves quality and job satisfaction.  Like the Japanese in the 1940’s, the American automotive industry embraced TQM in the 1980’s and 1990’s to regain their quality reputation and market share.

Still Relevant Today?

TQM may be an old idea, but the processes and results are just as valid today as they were in the 1920’s.  In an uncertain economy, companies can’t afford product defects, downtime, lost opportunities, lost customers and revenue due to poor quality and service.  With high unemployment and job uncertainty, employees are disengaged and morale is low.  The principles of TQM are evergreen.  They apply and are as effective today as they were years ago.

  1. TQM focuses on the customer.  Total quality management’s goal is to meet and exceed customer expectations.  They involve the customer to define expectations and quality standards.  Every person and department in the company is focused on its part in the customer service process.
  2. TQM emphasizes employee involvement at every level, working in quality teams using a defined process to solve problems.  Employees are empowered and motivated to participate in the planning, implementation and review of the quality process.  They have a stake in the outcomes.
  3. While there is an initial cost in training, process development, controls and measurement standards, the return on the investment can far exceed the investment.   Improved customer satisfaction, defect and cost reduction, increased revenues and improved employee morale are the results of an effective TQM culture.

The digital workplace needs TQM principles more than ever. 

With a global market and e-commerce, there is an increased need to establish quality standards and processes to deliver a consistent, high-quality product or service to customers around the world.  The Internet, with cloud computing, online and Skype meeting capabilities has brought the world into the conference room, allowing team members and stakeholders to work in virtual teams to improve processes.

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