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Mike Micklewright

Quality Insider

RIP … My Dear Saturn

Part 2 of a two-part story

Published: Monday, May 11, 2009 - 09:30

Question: How do Somalian pirates differ from some Wall Street CEOs?

Answer: A Somalian pirate takes hostages and demands money. A Wall Street CEO takes money and demands hostages.

Without the need, drive, pursuit, and focus on reducing waste; and because we had $1 billion to spend, Saturn had already lost one of the key battles against our rival, Toyota. And spend we did…

Expensive band-aids

GM, like so many other companies back then (and, of course, many today), wasn’t very good at performing root cause analysis (RCA). When RCA isn’t properly done, the company has to do something to catch the problem or defect and prevent it from getting to the customer. The norm is to add multitudes of band-aids, including inspection, inventory, and extra processing. This is exactly why lean is so popular today—we have accumulated so many band-aids over the years because we didn’t do a good RCA. (For more on RCA, see my previous column, “Why Root Cause Analysis Sucks in the United States”)

In my particular case at Saturn, I was a manufacturing engineer responsible for designing, purchasing, and testing the fluid fill equipment (e.g., air conditioning, engine coolant, windshield wash, power steering, transmission, etc.) for the general assembly facility. Experts from the GM technical center and other GM plants advised me on what I needed to purchase and the number of items to purchase. I was also supposed to benchmark other facilities—mostly GM, but also Honda, Chrysler, and Nissan—to find out how they processed and what equipment they used.

In one particular example, I was told by many people that I needed to buy two transmission top-off units at about $85,000 each. The second machine was a back-up, which was the GM norm, but as I was told by many, the second unit was there primarily to hold spare parts for the first unit. The machine would require half a person’s time to operate the unit during each shift.

The transmission top-off unit was always located after final assembly and test. The machine sensed the level of transmission fluid in a completed vehicle, and if there was too little, it would dispense what was needed. If there was too much fluid, it would suck out the excess.

At one point, I organized and lead a group of about five people to the NUMMI plant in Fremont, California. This was the GM/Toyota joint venture plant that produced Toyota Corollas and Chevrolet Novas (or “No Go” in Spanish). I brought my long list of benchmarking questions to California and received a lot of good information. I finally asked our tour guide if I could see their transmission top-off equipment. He asked me what it did. I told him the purpose of the unit and how it performed. He said they didn’t have anything like that. I told him that he must be mistaken. I was, after all, 25 years old and had already visited many plants, so I knew. I offered to take him to the end of the assembly line where the equipment would be located. We looked everywhere and couldn’t find the top-off equipment. It was at that point that I realized that transmission top-off units were just expensive band-aids. They existed solely because the root cause of why the plant couldn’t dispense an accurate level of fluid into the transmission had never been determined. It was an expensive band-aid: $170,000 in equipment and lot of labor to cover up a wound made much earlier in the process.

I wondered how many other band-aids Saturn was buying...

When a new plant is built, it typically receives the best of everything. Unfortunately, without any focus on the elimination of waste, that also means the company will buy the best band-aids.

When I returned to Saturn headquarters, I gave up the $170,000 budgeted for this particular equipment because I took it to heart that my processes should be as good or better then Toyota’s--a goal pursued by few people. Others thought I was nutty for doing so and some said that one should never give up money in his or her budget, just in case something unexpected happens. I took it as a challenge, assembled a team, and started a failure mode and effects analysis (FMEA) on the initial transmission-fill process so that a top-off wouldn’t be necessary.

It’s my belief that Saturn bought a lot of waste and broken processes from other GM plants. We did it because we could afford to. Why else?

Idealism vs. traditionalism

At Saturn’s beginning, the company intentionally hired people from outside the automotive industry. Saturn wanted fresh blood, people who weren’t afraid of taking risks. They wanted creative thinkers, go-getters. We heard of the Original 99, which included salaried and United Autoworkers Union employees. This group learned Toyota’s ways and brought them back to the United States to be used in the formation of the Saturn Project. Saturn needed and sought employees who weren’t influenced by the negative effects of being in the automotive industry for many years.

And then it happened.

In 1987 and 1988, GM made the decision to trim 25 percent of its North American white-collar workers. At the same time, Saturn was hiring people so, of course, GM pressured Saturn to hire GM workers targeted for lay-off. This was one of the earliest blows to Saturn’s ideals and what the Original 99 had envisioned for Saturn.

In general, the ex-GMers weren’t the cream of the crop in their respected fields. That’s why they were being let go. So the battles between idealism and traditionalism began to flourish in all aspects of the company’s business system, product design, and manufacturing facility.

One such battle involved the repair lot. This was the lot that would be designed just outside final inspection and designated to hold all of the vehicles waiting to be repaired after flaws were discovered during final test and inspection. Of course, the idealists saw this as planning for failure, an example of waste resulting from RCA not being done to ascertain the source of the defects. The idealists believed that defective vehicles should be brought back to the line from where the defect originated and investigated for the problem's root cause. The traditionalists believed that Saturn’s repair lot should be as large as a typical GM repair lot. After many heated battles over this topic, the leaders compromised on a half-sized repair lot. Stephen Covey, author of The Seven Basic Habits of Highly Effective People (Free Press, 2004), taught us that “compromise” is a “lose-lose” situation for both parties.

In our case, the idealists and traditionalists lost.

Saturn should have been completely separate from GM

If Saturn was to succeed, it really needed to be completely separate from GM. This could possibly and, perhaps finally, happen in the near future if some entity decides it’s worth the purchase and there is still value in the brand.

The perception from the market was that Saturn was separate, that it wasn’t part of GM. Many people today still don’t realize that Saturn started off as a GM product. Some think it was owned by a Japanese company. This was intentional and it worked. General television ads for all GM products didn’t refer to Saturn.

In reality, behind the scenes, Saturn was most definitely a GM product and was influenced by GM continuously and increasingly throughout its history.

I can remember visiting other GM plants and hearing the anger in the voices of other GM employees about how the expense of Saturn was taking away from their profit sharing. It bothered them that Saturn even existed.

This was true at the lowest and highest levels within the company. After Saturn advocate CEO Roger Smith left the company, Saturn had to battle for years against its GM siblings, especially Oldsmobile, for money to invest in new platforms. It took eight years to come up with the unsuccessful larger L-series sedan and 10 years to replace the S-Series. That’s much too long to maintain loyalty and excite new customers. If Saturn had truly been independent of GM, it would have had newer vehicles coming out much more quickly than it actually did.

When I worked at Saturn, it was drilled into our heads that our target was “the first time car buyer, female, and fresh out of college.” I can remember being part of the sun-roof selection team and stating that we could not go with a cheaper sun-roof, the kind that had to be extracted from the outside of the vehicle. The target market would not like it.

Saturn’s debut vehicle sold for less than $11,000 and was a hit with the target market. In 2007, under GM, Saturn began to sell the Aura family sedan, an upscale Lexus type vehicle, for up to $29,000. I don’t know of many college graduates who can afford a $29,000 vehicle and already have a family in tow. I suspect the numbers aren’t that large. The target market was lost over the years. The marketplace became confused over the years about what Saturn stood for. It lost its identity, as did its GM siblings.

GM did to Saturn what it had nearly done to Cadillac in the 1980s when it first introduced the Cadillac Cimarron. The Cimarron, a compact car built on the same platform as the Chevrolet Cavalier but with better fabrics, more gadgets, a four-speed manual transmission, and a much loftier price, was an insult to the Cadillac brand and its customers.

GM nearly killed Cadillac in the 1980s in the same manner as it has for Saturn by 2009.

Dr. Deming taught us that we must “create constancy of purpose.” That is, we must think long-term and innovate for the future. We must know what our customers want and need because the customers don’t know what’s possible to create. We’re in business to provide value to the customer, to improve society, to improve quality of life, to stay in business, and to provide jobs to the community.

Saturn started down this path. GM stopped it.

Nemawashi, benchmarking, and concept selection

I was at Saturn for only three years. I learned a lot. I loved the challenge. I didn’t want to leave the company.

There were many success stories early on, many patents, and there were attempts to live by Deming’s and Toyota’s principles. Dr. Deming taught us to choose suppliers based on total cost, not just based on the price tag or quoted price, and he taught us to form long-term relationships with our suppliers based on loyalty and trust. Dr. Deming taught us that any good sourcing decision must contain all of the quality elements. Toyota believed in this, as well. Furthermore, Toyota believed in taking one’s time to carefully consider all of the options or alternatives when making decisions regarding suppliers, product design, processes, and systems. The decision-making process is more important than the decision. They called this nemawashi. In Jeffrey Liker’s book The Toyota Way (McGraw-Hill, 2003), you can read about nemawashi as one of the 14 principles of Toyota’s success.

At Saturn, I learned of this and then taught others. The process was called the Total Development Process. Two of its key process steps included benchmarking (to learn of possible alternatives) and Pugh Concept Selection (named after Stuart Pugh and used to make objective decisions, based on stakeholder needs, with other team members).

These processes were used by me and other team members to choose the long-term fluid fill supplier, to lay-out the fluid fill process, and to choose a compressor supplier. The fluid-fill equipment supplier’s quoted price was actually higher than their competitor’s price. The chosen supplier was picked because of all the other factors that went into the decision. We chose a Japanese company as the compressor supplier, which created an uproar back at GM. They had expected us to choose a sister company within GM that had previously built the compressors for all GM vehicles.

Thank you Saturn and RIP

I will miss the thought of you and what you stood for, Saturn.

You were my beginning and you gave me so much hope. Thank you.

You had so much promise.

You taught me so much. Thank you.

You just had bad parents.

Rest in peace.

 

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About The Author

Mike Micklewright’s picture

Mike Micklewright

Mike Micklewright has been teaching and facilitating quality and lean principles worldwide for more than 25 years. He specializes in creating lean and continuous improvement cultures, and has implemented continuous improvement systems and facilitated kaizen/Six Sigma events in hundreds of organizations in the aerospace, automotive, entertainment, manufacturing, food, healthcare, and warehousing industries. Micklewright is the U.S. director and senior consultant for Kaizen Institute. He has an engineering degree from the University of Illinois, and he is ASQ-certified as a Six Sigma Black Belt, quality auditor, quality engineer, manager of quality/operational excellence, and supply chain analyst.

Micklewright hosts a video training series by Kaizen Institute on integrating lean and quality management systems in order to reduce waste.