Toyota’s Approach to Quality
Akinori Hyodo, former Factory Manager, Toyota HiAce Factory | #AskSensei Event 22 Summary
Assuring quality is essential in keeping customers satisfied and is an important component of business success. Yet, many companies struggle to control the quality of their products. Hyodo Sensei discusses how Toyota approaches quality and explains the importance of guaranteeing quality within each process.
How Toyota Approaches Quality
I will be talking about Toyota’s approach to quality today. I trust that all of you participating in today’s webinar are from various different areas of an organization with various different roles. Despite this, I believe one thing that is common amongst all of you is that you all have a customer to whom you are delivering your products or services. Therefore, there is a role for all of you to bring satisfaction to your customers. But, how do you best satisfy your customers? It is often said that we need to deliver good products and services to our customers at a low price to make them happy. Then, you will realize that good products and services relate to quality and delivering them at a low price relates to cost.
So, how can we best assure we are providing good quality to our customers? There are various ways you can approach this. One of the common approaches for this is to have a final inspection at the very end of your process to ensure that what will be passed on to your customers are of good quality. But, from a lean perspective, the inspection at the very end of the process is actually waste. Ideally, the best approach for us is to be guaranteeing quality when we are in the middle of each process while we are actually making our products. You should aim to achieve quality in this fashion.
To be more specific, what this approach means is that you need to consider your next process as your customer and only pass on good quality products to that downstream process. Therefore, you must be considering ways within your own process to guarantee that you are handing over only good quality products to the next process.
So, how can we guarantee quality within our own process? First of all, with regard to how we deal with human elements, as we talked about previously on our #AskSensei webinar series, make sure that standard work is created and put in place properly. In doing so, ensure there are quality angles incorporated into the standard work that you create. With regard to the machinery and equipment side of things, we need to be ensuring that we have a sturdy maintenance program in place. These are the types of things that need to be in place within each process regarding both operators and equipment maintenance so that you can ensure no poor quality products are passed on to the next process – your customer.
What I have covered off so far is mainly around the hard side of things. But, there is also a soft angle to quality which is about raising people’s awareness around quality. There needs to be a so-called double-sided approach – one angle from the hard side and another angle from the soft side – to be ensuring quality out of your process.
The other important thing about quality is that there should be no acceptable middle ground. When it comes to quality, it should be a matter of either zero or 100 percent or only black or white and no grey. What I mean by this is that there is no such thing as “acceptable poor quality” products.
For example, if you come across a company that has a one ppm (parts per million) defect rate, you may think the company is doing quite well since they have only one defect in a million that they produce. However, if you are the customer receiving that one defect out of a million, the percentage of defects that you are receiving is actually 100. If you are at the receiving end of that defective product as a customer, I am sure you wouldn’t be saying, “okay, no worries. I can totally accept the defect as the company’s defect rate is as low as one ppm”. From the angle of the customer, even one ppm is unacceptable. That is why I say that quality is either zero or 100 percent and there is no acceptable level of defect as such.
A really important approach to ensure defects don’t occur is that if you do find one defect, you must make sure to take very quick action regarding that defect, and put measures in place to ensure that the same issue doesn’t occur again.
One of the fundamental principles of TPS thinking is that when you have a problem, you stop. A defect is a problem. Therefore, when you experience a defect, you must stop what you are doing immediately and apply the concepts of genchi and genbutsu, that is going to the actual place where the problem occurred and investigate the actual things – machine, tools, parts, whatever the case may be – and gain a correct understanding of the problem right there where it happened in order to address the problem.
Those at the team leader and supervisor levels are the ones with the role and the responsibility of doing this type of work in addressing the problems.
The key reason why I always ask you to carefully look at your workplace and what your people are doing is because of this – you must get a good understanding directly from the source where the issue happened so that you can link that direct understanding with good countermeasures. In doing so, those at the team leader and supervisor levels also need to observe whether those below them are observing the rules and whether the standard work put in place has been followed correctly. Through looking at these types of things more closely, the level of precision at your operation, particularly around standard work will improve, and you will be able to see better outcomes regarding quality and the like as a result.
In Toyota, we say those companies and factories that have a high level of precision around standard work are the ones with the best level of quality and the lowest number of incidents regarding safety.
When I go overseas and visit various factories, what I often see is that people put together a Pareto chart at the end of each week around the key quality issues they had throughout the week. Then, they analyze the information and take actions to address the issues, in order of the ones that occurred most frequently. There is no denying that this approach itself is good.
However, one of the fundamental approaches to address quality issues is that when a defect occurs, you must investigate the cause immediately and take measures swiftly at the time it occurred to ensure that the same issue would never occur again.
As I mentioned earlier, tracking defect information on a weekly and monthly basis is good and it is important to understand that information. But, they are made up of individual incidents that happened separately. So, being on top of defects when they occur throughout the day and throughout the hour is the best approach to tackling quality issues. That is the approach we take in Toyota.
If you are continuously experiencing defects and things are not working out well in your organization in regards to quality, you should reflect on what’s behind this. There may be some factors around how you structure your organization to deal with defects and put improvements around quality. You must also reflect whether people’s roles and responsibilities within your organization are clearly defined. I think there is some reflection to be had surrounding some of the points I have just mentioned, and getting down to the real reasons as to why your organization is continuing to experience defects is extremely important. You need to come up with a better approach that addresses those issues and improves quality.
Even in Toyota, yes, we do have quality issues. But, there is a clarity around the roles of people, particularly around the role of team leaders in terms of what they do on a daily basis when defects occur. That’s why team leaders are really busy fulfilling their roles on the shop floor.
When a quality issue occurs, the person with the responsibility for that is the top person of the team – i.e. the team leader in this situation – that is working in the area within which the quality issue occurred. Then, this goes up another level such as to the supervisor, manager and so forth. That’s why, those at the supervisor and manager levels are also regularly looking at their workplace carefully and following up on issues to ensure that the right measures have been implemented such that the team can best avoid a situation where a quality problem occurs. Such a management structure firmly exists in Toyota with clearly defined roles and responsibilities of people at each level of the organization.
In an ideal situation this is what should be happening. However, if this is not the case within your organization at the moment, reflect on why you are not in this situation and find out the reasons that are preventing your organization from ensuring that no defects are produced.
I have been in many different workplaces and factories around the world and I have heard many comments that they were struggling with defects and quality issues. What I find common amongst these types of operation is that they don’t have clarity around the structure and the roles of people regarding dealing with the quality issues they come across. If you put the right structure in place and everyone takes action accordingly within their defined role, I can assure you that the number of quality issues experienced will decrease drastically.
Many say that driving towards zero defects will result in an increase in cost. How does Toyota deal with this?
Firstly, the thinking within Toyota is that quality has a higher priority than cost. In other words, we don’t have the thinking that quality can be compromised if it is going to save money. That’s not our thinking at all. In our thinking, quality always comes before cost, therefore we first assure our quality.
In order to assure our quality, we take various actions on our shop floor such as applying kaizen to what we do in order to eliminate defects and improve quality, etc. But, a key fundamental approach to kaizen within Toyota is to use what’s in your head as much as you can to come up with low-cost or no-cost ideas and solutions for improvement.
As we discussed earlier, our fundamental premise is to provide our customers with good quality products at low cost. We must satisfy the requirements of our customers and the quality is the key part of this equation. So, when we receive quality complaints from our customers, we must do all it takes to address the quality issue by putting quality before cost. Otherwise, we are not following the principle of putting our customers first.
Another angle to this is to ensure that our product design and its manufacturing process incorporate quality thinking as much as possible before the actual production of the product starts. In this way, there is no added cost involved in ensuring quality or addressing quality issues later on as those points are already incorporated into the product or the process.
Something we also do within Toyota in terms of how we go about assuring quality is that before production commences on a vehicle, the production planning team spends long hours going through a number of production trials and if the vehicle hasn’t fulfilled all the set quality standards and requirements, we will not commence the production no matter when the production launch date of the vehicle is. We will not launch a vehicle that hasn’t satisfied the designated quality level through the trials of the vehicle production before its launch.
This type of thinking applies not only regarding quality but also to other aspects of what we do as well. We try to address issues as early and up front as possible to avoid them becoming more expensive issues down the track. The earlier you can analyze and address the issues, the better off you are going to be later on in terms of the cost incurred.
With this thinking in mind, the production side feeds all the important information and provides feedback through to the previous process, i.e. the design process. The previous process needs to receive the information from the shop floor to understand the existing quality issues in order to address those in the design of the new product and its production process. In fact, they work together so that those same issues or the cost in controlling and managing those issues don’t remain in the new product.
In summary, there are two approaches to increasing quality while reducing cost. Firstly, incorporate quality and cost-saving thinking and measures into the product design and production preparation phase as much as you can. Secondly, when you experience problems once production commences, rather than resorting to costly solutions, use your brain to come up with low-cost or no-cost solutions through applying kaizen. Simply put, it all comes down to these two points.
When I hear people say quality improvement costs money, I don’t think it should be this way. In my thinking, a lot of people just choose to spend money. There are approaches you can take to remove the need to spend money on quality as I have touched upon in my answer to the question.
What tools or things do you use to encourage and motivate line operators and team leaders to engage and improve quality of products?
I think it comes down to how line operators and team leaders can ensure the standard work and raising the precision level of standard work. There are some hard tools that can be utilized to improve quality, but working to increase the precision of standard work is the key approach.
As I said earlier, quality has a hard angle and soft angle to it and giving some attention to the soft angle particularly in raising people’s awareness around quality is important.
In terms of raising people’s awareness, one way to do this is to make things visual. For example, displaying a defect, not in a negative way but in a good way, is one way of visualizing and raising awareness around quality. Another example on the soft side approach is that if your operator detected a defect passed on to your process from the previous process, give credit for the operator for finding the defect and give him/her a proper recognition such that this can touch the soft side of things to increase people’s awareness around quality. As for an example on the hard side of things, introduce a poka-yoke or error-proofing device to assure that no defects are passed onto your next process.
In my opinion, the level that you achieve with these things will essentially be determined by how frequently and closely those in the team leader, supervisor and manager roles can observe the work area that they are in charge of. When you experience a defect, extract the cause through root cause analysis and apply a counter measure at that root cause level. In addition, make sure to follow up on the counter measure at that root cause level to ensure the elimination of that very issue.
Honestly speaking, it is the matter of going through the continuous cycle of this to lift up the level of quality – i.e., those at that level of the organization closely watching their work area, taking immediate action to address issues they come across at the root cause level and follow up on the actions taken on a daily basis.
Those at that level of organization should also regard this as an opportunity to develop people beneath them. Take those below you through this process of the continuous cycle I have just mentioned over and over again so that you can keep them engaged and develop capability in them around quality.
What would be the best way to get a lean project team (from the business side) to believe in the project and the benefits that will result from it?
I believe that if a project team are the doers of the improvement and those receiving the benefits of the improvements are those, for example, on the shop floor in a factory, I don’t think this divide works very well. In my opinion, both sides need to come together and work as one in order to produce successful improvements.
What’s important for the team to do is firstly have a clear objective behind what they are doing with the project. They should identify the target relative to where they currently are. The gap between the target and their current state will highlight the steps that they need to take in order to achieve the target. Developing a strategy around what those steps are and how they are going to achieve those steps are important for success. Also, having a clear structure as to who are involved in those steps and implementing the planned improvements are also crucial. Once they have been worked out, all that information needs to be visualized and shared with those who are going to be on the receiving end of these activities such as operators working on the shop floor. Make sure to conduct activities to raise awareness around the project and help them understand all the important things to go about the project including the objective, reasons, strategy and steps of achieving the objective.
These awareness raising activities targeted to those at the receiving end on the shop floor is extremely important. This is because in the end they are the ones who are going to be affected by it and also carry on with the changes that are going to be made into the future. That’s why, it is crucial that the project team works with those at the receiving end and that everyone at the receiving end gets involved so that the changes are introduced in the way that will be sustainable into the future.
Another important point to consider is the structure of the project team. If you gather a group of people from outside of the target area where improvements are going to be made, I don’t think it would work effectively as they don’t necessarily know the area well. If I were responsible for establishing the project team, I would consider bringing in the team leader or the supervisor of the target area and appoint that person to be the head of the project team since that is the person that has a vested interest in making the project a success.
Perhaps, I should have asked this question first but why do you establish a project team to start with? What is your objective of having the project team created? The best possible scenario is that people implementing improvements are those who are working in the certain area and are directly responsible for the area. If that is the case, you don’t even have to establish a lean project team.
Generally speaking, when a project team is established with external people involved, it is often the case that the size of the issue is too large to be tackled by those at the receiving end alone or special expertise from other areas of the business is required to guide the people in the area along the right direction for improvement. That’s why, I would select a team leader or supervisor from the specific area to become the project team leader.
I believe this is a better approach than appointing someone external from the area to be a project team leader. The key reason behind this is that once the project is over and something happens regarding what’s been implemented through the project, if those on the receiving end were not directly involved in the project to start with, they are not in the best position to follow up the issue properly. What’s more, it is often quite difficult for us humans to appreciate what’s pushed upon us by others. But, we often develop a sense of ownership with things that we create by ourselves. So, having those at the receiving end directly involved and giving them the first-hand information and the best tools to deal with the problem well beyond the project is finished is the best strategy in order to deal with changes and sustain the improvements implemented through the project within the area.
#AskSensei is a regularly-scheduled webinar held together with Shinka Management Senior Lean Consultant Akinori Hyodo, who formerly enjoyed a career with Toyota rising from operator and team leader at Toyota, right up to factory manager and director of Toyota’s HiAce Factory. Each event we cover a different topic related to lean manufacturing, with participants invited to put their questions to Hyodo Sensei.
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