Repost: Toyota vs Ford
Reposted from Dr. Tony Burns on LinkedIn
TOYOTA ( Deming ) vs FORD ( Six Sigma )
Toyota is widely regarded as the pinnacle of quality, while Ford is left in their wake. Last year (2020), Toyota made a gross profit of USD 45,242M. Ford trailed behind somewhat with a USD 14,392M gross profit.
Despite Ford’s 34 year head start on Toyota, the latter is now three times the size of Ford and makes twice as many vehicles.
Ford’s Six Sigma program focuses on cost savings at the expense of Quality. The result is a collapse of both Quality and profitability.
Toyota focuses on Quality. Their great profitability is a consequence of their great Quality.
The Japanese learned Quality from Deming in the 50’s. The classic Ford transmission study showed that Ford was aware in the 70’s that their focus on the specification and defects, produced inferior product. Ford knew the Japanese focus on the process and reducing variation, produced superior Quality.
Ford was rescued from disaster in 1982 by Professor Deming. Between 1979 and 1982, Ford had incurred $3 billion in losses. Deming helped return Ford to profitability in just 4 years. Sadly, Professor Deming’s contribution was forgotten. If Ford had continued with Professor Deming’s methods, they may have pulled ahead of Toyota.
Instead, in 1999 Ford bought Mikel Harry’s Six Sigma Snake Oil and went back to counting defects.
If Ford had bothered to investigate, they would have discovered that Harry’s hype was laughably based on the height of a stack of discs! It was blatant fraud from the outset. Like many other companies, it cost Ford dearly.
Ford had plenty of defects upon which to focus. An 8 year study of Ford’s 3,277 “successful” DMAIC projects showed an average of 220,296 dpm AFTER “improvement”. Yes, that’s worse than 1 in 5, with a total of 722,000,000 defects AFTER improvement.
By contrast, Toyota has used Professor Deming’s methods since the 1950’s:
“There is not a day I don’t think about what Dr. Deming meant to us. Deming is the core of our management.”
– Shoichiro Toyoda, Chairman and director of Toyota
Rather than spending months in “rudderless” DMAIC projects, as Bhote described them, and having pseudo “experts” with coloured belts telling workers how to suck eggs, Toyota respects and engages workers in Quality. Front line, Quality Circles improvement teams, build in Quality. By keeping it simple and focusing on Quality fundamentals, Quality Circle teams at Toyota have achieved over 2,000,000 process improvements. For example, one such improvement saved 15 employees; reduced the possibility of incidental damage to piston rings; and saved Toyota hundreds of thousands of dollars.
The message is clear. Avoid fads and farce like Six Sigma. Stick to Quality from the giants: Professor Lewis; Dr Shewhart; Professor Deming; Dr Wheeler.
“Dr Deming’s now famous ‘14 points of management’ when followed, appear to move organizations towards prosperity” – Mr Bill Smith
Think Different
A few years ago, I owned a Ford Fiesta. At that time, it was 18 years old, but was comparatively trouble-free and what few things did go wrong with it were cheap to fix.
One year, I had to have a front wheel bearing replaced. The day after I had it back from the garage, I set off for work but got no further than a mile down the road when steam started coming out from under the bonnet. It rapidly got worse, and steam started coming into the passenger compartment. Eventually, I was able to pull over and summoned assistance.
There was a major leak in the coolant circuit; in this case, where the coolant hoses went into the valve that controlled the heater. The heater valve had a plastic body, and two spigots that the hoses pushed onto and were secured with clips. What seems to have happened is that the spigots had sheared off, most likely when my garage had finished the repair to the front bearing and let the car down off the jack too quickly. Although the car wold bounce on its suspension if dropped from a couple of inches, an old and brittle valve might just fracture. Coolant had sprayed over the exhaust manifold heat shield and flashed into steam.
You could not ask for a better illustration of the outcome of six sigma; at some point, a decision was made on cost grounds to source that component in plastic rather than metal; and if anyone had pointed out that the component would deteriorate over time as many plastics do, someone else would have pointed out that the car would likely only have a life expectancy of some ten years and that this was a legitimate trade off.
Needless to say, I have not bought a Ford since.