Articles

Toyota Pay the Price for “Not Connecting the Dots”27/02/10

In April 2001, the Toyota Motor Corporation adopted the “Toyota Way 2001”, an expression of values and conduct lines that all Toyota employees were to embrace. One of the main ideas was to have a process for solving problems and recognising that continuously solving the root cause of problems drive organisational learning.

Principle 14 – “Become a learning organisation through relentless reflection (hansei) and continuous improvement (kaizen)”.

The process of becoming a learning organisation involves criticising every aspect of what one does. The general problem solving technique to determine the root cause of a problem includes:

  1. 1. Initial problem perception
  2. 2. Clarify the problem
  3. 3. Locate are/point of cause
  4. 4. Investigate root cause (5 whys)
  5. 5. Countermeasure
  6. 6. Evaluate
  7. 7. Standardise

This sounds excellent best practice and aligned with that contained within ITIL.

What could go wrong?

On August 28 2009, a 911 call was received from a car that was speeding out of control on Highway 125 near San Diego. The caller, a male voice, was panic-stricken: “We’re in a Lexus…we’re going north on 125 and our accelerator is stuck…we’re in trouble…there’s no brakes…we’re approaching the intersection…hold on…hold on and pray…pray….”

The call ended with the sound of a crash.

The Lexus ES350 sedan made by Toyota had hit a sport utility vehicle, careened through a fence, rolled over and burst into flames. All four people inside where killed: the driver, Mark Saylor, an off-duty California Highway Patrol Officer, and his wife, daughter and brother-in-law. (Source: The New York Times February 1, 2010).

It was this event that forced Toyota, which had already received more than 2,000 complaints of unintended acceleration, to step up its own inquiry, after going through multiple government investigations since 2002.

In the U.S., the National Highway Traffic Safety Administration has reported received complaints on 34 fatalities connected to the problem since 2000.

Toyota is now subject to an ongoing investigation by the U.S. House of Representatives Oversight and Government Reform Committee. The outputs from that investigation so far make it clear that a lack of Problem Management has had devastating effects not only on Toyota the company, its management and employees but also on the family and friends of those related to the deceased.

The cause of the problems with the vehicles has been attributed to loose floor mats, sticky accelerator pedals and faulting breaking. These in turn have been attributed to software glitches and design errors.

Toyota president, Akio Toyoda, announced a press conference this week “we failed to connect the dots” with accelerator problems in the U.S. and Europe. He said that the company needed to improve “sharing important quality and safety information across our global operations”.

Apparently, the failure to connect the dots between problems in Europe and problems in U.S was because the European problem related primarily to right-hand-drive vehicles!

As of this week, Toyota has recalled more than 8.5 million cars. – the biggest recall in its seven-decade history. Sales in U.S in January are expected to fall by 11% from the previous year. Its market in the U.S. is likely to fall to its lowest point since 2006 according to Edmunds.com, an automotive research website.

So what did go wrong?

According the Associated Press (Yari Kageyama), the very principles of efficiency and flawlessness that earned Toyota a near perfect reputation, couldn’t prevent problems cropping up in areas outside the factory, areas just as crucial these days in industry – design development, crisis management and software programming.

The Toyota Way worked well inside the factory with each worker empowered to stop the assembly line if something is wrong. The principle being to fix a small problem before it becomes a big one.

Toyota management simply failed to practice what they had preached to their employees. Anand Sharma, chief executive of TBM Consulting said, “Toyota managers did not respond to the early signals. That’s when they should have identified the root causes”.

The defects were not manufacturing errors – the sort that workers at the plants would have been trained to pick out such as a piece that doesn’t fit, a crack in a part or something that diverges from the design.

The complaints from customers communicated via headquarters for checks in other regions were not linked. Toyota responded in a piecemeal fashion with three limited recalls to replace floor mats and a change to an interior part that could catch on accelerator pedals. The fatal crash in August forced Toyota to – in its words – “take a closer look”.

Toyota now believes that the trouble with the cars is twofold – a combination of loose floor mats that can interfere with accelerator pedals and a pedal that itself can stick when a driver depresses it. Faulty breaking has been linked to a software glitch.

Lessons Learnt

Problem Management is not limited to errors detected within the workplace. The principles apply in everything that an organisation does.

Customer complaints should be recorded as Incidents and trends monitored and reported upon to ensure that Problems are detected and root causes analysis is undertaken at the earliest opportunity.

Problem Management applies to any process, any system, any project, any service, any asset etc. and has to be addressed as soon as it is reported – regardless of source.

The Incidents need to be analysed to ensure that they are not part of a bigger Problem.

Mubbisher Ahmed in IT Service Management Forum suggests that a lesson for CIOs is to listen, listen and listen again. He suggests using social media such as LinkedIn, Facebook, and Twitter to monitor the user/customer community to proactively listen to what is being said about your products and services and therefore be able to anticipate problems before they get out of control.

Maybe this is time for Problem Management to start utilising social media as well as Incidents reported to the Service Desk or generated by events to detect issues arising.

The Toyota saga will continue to unravel as investigations continue but regardless of the cause of the problems it is clear that this was a case of too little too late.

MACANTA can help you implement best practice processes with our Process Development service.