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H. James Harrington

Six Sigma

Are Quality Methodologies All Smoke and Mirrors? Part Three

Quality shouldn't be measured by cost savings.

Published: Monday, January 11, 2010 - 05:00

In the first column of this three-part series, I reviewed an interview that was conducted in 1988 with F. James McDonald, president of General Motors. In this interview he explained what GM was doing to improve quality and customer satisfaction. Typical activities that GM was involved in during that period were:

  • Top management involvement in leadership in the quality movement
  • Design quality into products
  • A vision to offer world-class quality in every market segment. By world-class, we mean parity with or superior to the best in the field—product for product
  • Management's total commitment to quality
  • People development
  • To be the world’s leader in quality, reliability, durability, performance, service and value
  • They had a five-year plan to reach their vision statement

 

In the second column, I reported what you, the reader, believed was the reason that the GM action plan for quality didn’t work. You stated that GM performed so badly because of:

  • Too much focus on quality tools, not on results
  • Poor management throughout the organization
  • Too much focus on suppliers and little focus on internal processes
  • Being too big an organization and reacting too slowly
  • Poor reliability designed into products
  • Poor teamwork between GM and the unions
  • Poor or a lack of customer focus

 

I asked for input from someone who worked for GM, but I didn’t get any input. I did, however, get a lot more input from GM customers or past customers as a result of the second column in this series. Almost all of it supported the inputs reported in the second column. I did get one e-mail from a person who stated that he had a GM car that he liked.

Well now it is my turn to look into my crystal ball and give you my opinion of why the very standard and practical quality improvement plan failed at GM so badly, driving them into bankruptcy.

I have to admit it looks like GM did read books by quality leaders such as Joseph M. Juran, W. Edwards Deming, and Philip B. Crosby, and tried to implement their teachings in the organization. They looked at the Baldrige Criteria for Performance Excellence and tried to use it as a guide for their activities. They took benchmarking to the extreme by forming a joint venture with the best of the breed—Toyota—and set up a new company called NUMMI, in Fremont, California. This joint venture with Toyota allowed GM to live with Toyota’s best practices and have a detailed understanding of how to apply them in every one of their production lines. But this, too, proved to be a failure as GM has pulled out of the joint venture because it was not profitable for them, leaving Toyota with more than 3,000 workers at the Fremont plant.

I tried to find out if the GM factories were registered to the quality standards QS-9000 or ISO/TS 16949, but I couldn’t find any records indicating that they are. I hope I am wrong on this point; but it was easy for me to verify that their key suppliers are registered. Please let me know if I am wrong.

As good quality professionals, we must draw our conclusions based upon data, not just hearsay. Consumer Reports published their ratings of auto manufacturers, based upon their performance and reliability, in the April 2009 issue of the magazine. The five best rated auto manufacturers were:

  • Honda
  • Subaru
  • Toyota
  • Mazda
  • Mercedes-Benz

 

The five middle-of-the-road auto manufacturers were:

  • Nissan
  • Volkswagen
  • BMW
  • Hyundai
  • Volvo

 

The five worst auto manufacturers were:

  • Mitsubishi
  • Ford
  • Suzuki
  • General Motors
  • Chrysler

 

You will note that the three U.S. auto manufacturers make up the majority of the five worst companies, with Chrysler rated as the very worst and General Motors second from the bottom. America’s auto industry that once was the nation’s pride and joy is now the worst of the major organizations.

If you look just at reliability performance and consider that 100 percent is what the customer really wants, then a rating of 79 percent is what the customer considers as acceptable reliability. Now let’s compare the key auto manufacturers against the 79-percent standard acceptable level.

  • Toyota rates at 98.2-percent acceptability
  • Ford rates at 71.9-percent acceptability
  • GM at 48.20-percent acceptability
  • Chrysler at 40.5-percent acceptability

 

How can you expect customers to buy GM or Chrysler products that are performing at less than 50 percent of what their customers expect.

A five-year-old GM or Chrysler vehicle will have almost 300 percent more problems during a five-year period than a Honda or a Toyota vehicle. GM’s major reliability problems are:

  • Drive systems
  • Suspensions
  • Brakes
  • Body integrity

 

GM and Chrysler, along with the rest of the world, know what their reliability problems are, but in 30 years they have not been able to correct them.

I pulled a sample of quality articles written by GM quality personnel and more than 80 percent of the articles related to the work they were doing with their suppliers. It looks like GM doesn’t understand that supply chain management starts with the design and the internal processes. GM needs to have fewer supplier quality engineers and a lot more reliability, which would start with enthusiastic, qualified design engineers.

GM and Chrysler conceded that they had a major reliability problem in the 1980s and were aware of it before then. Now, after 30 years, they still haven’t been able to correct it. There is no reason for us to think that the U.S. government can step in and make it better by taking taxpayers’ money to bail GM out of their financial state of affairs. Their fundamental difficulty that needs to be resolved is related to reliability issues. Their problems are internal and they have not been addressed.

I feel sorry for all of the people that GM and Chrysler would put out of work if they went under. Maybe it is better to take the taxpayers’ money and use it to retrain these workers for jobs in other fields. We have a need for nurses and teachers, as well as needs in other professions that could use competent, caring, quality workers. GM and Chrysler need to come up with a sound logical approach to have a major breakthrough in the reliability of their products. Unless GM and Chrysler solve their reliability problems, any money that is invested in them is just going down the drain.

It is time for the quality professional to realize that Six Sigma and lean manufacturing will not meet the customers’ requirements today. They may reduce cost, however, quality improvement should never be measured by cost savings. It must be measured only on customer satisfaction improvement and mean-time-to-failure. We need a lot more certified reliability engineers than we have Six Sigma Green Belts and Black Belts combined. GM and Chrysler in the last 30 years have not learned that it is better to prevent problems than to be the very best at correcting them. I hope the rest of our industries learn their lessons before they go bankrupt as well.

Discuss

About The Author

H. James Harrington’s picture

H. James Harrington

H. James Harrington is CEO of Harrington Management Systems, which specializes in total quality management (TQM), Six Sigma, lean, strategic planning, business process improvement, design of experiments, executive management mentoring, preparing complete operating manuals, organizational change management, ISO 9000, ISO 14000, and TRIZ. Harrington is a prolific author, having written hundreds of technical reports, magazine articles, and more than 35 books. He has more than 55 years of experience as a quality professional. Harrington is a past president of the American Society for Quality (ASQ) and the International Academy for Quality (IAQ).

Comments

PR is great

So far this year, I know of a Toyota owner who had an oil hose that leaked and drained almost all the oil from the engine. Car was less than one year old and the seal was bad. I assume you are familiar with the Tundra rust issue and the Toyota floor mat problem. I have a friend who has a Camry that will nothing but slide at every icy street crossing (He is getting ready to trade it for a Chevy-dealer was no help). I worked for a Honda supplier and watched them "fix" assembly problems and ship the product. I have another friend who lost a carburator in a Honda Civic hybrid that was less than 6 months old and Honda would not warranty the problem. I think you are behind the times when you tout foreign vehicle reliability.

Reliability

I agree that reliability has been the thing that has kept me buying foreign cars. I also agree with the comment about Matag. My wife and I bought a Matag washer and dryer in 1979 shortly after our wedding. After 30 years they were still working well but I thought they were getting near the end of their life, so we bought new ones from Matag. What a mistake. We have to fight with them not to smell (the washer) and the lint escapes around the dryer screen and gets caught in the exit hood. These units require much more maintenance and attention than the old ones. They do use less electricity and water however. I'm sure we will not be brand loyal next time but investigate more completely who makes the best before we buy. Maytag has not kept its leadership role in quality like I had wished.

Reliability Issues with "Detroit 3"

Dear Mr. Harrington,
Thank you for highlighting the most important reason why the "Big 3" are now the "Detroit 3". It is incredible that so many years of declining market share have failed to wake up the Detroit 3 to the real reasons for their decline. We hear about the lack of "exciting" products, health care costs, UAW issues, pension costs, fuel prices, etc etc etc. All of those are "issues" - but NONE of them explain the Big 3 market share going from 90+% 30 years ago to less than 46% today. In fact, 2009 marks the first year that Asian manufacturers have higher U.S. Market share than Ford, GM, Chrysler combined. The reason that fewer and fewer American buy "Detroit 3" products is the miserable experience they have when vehicles begin to accumulate mileage. While the Detroit 3 touts their closing the gap in 3MIS surveys (and this is great) -- they have a LONG way to go when it comes to RELIABILITY.

For the past 10 years I've been driving Honda and Toyota products after some miserable experiences with Ford/Mercury products once they reached 40K miles. I have been thrilled with my Toyota and Honda experiences (products AND dealer experience). A year ago I convinced my wife to give Ford another chance to try and support the Detroit economy and industry. Well...at 5K miles, my Escape broke down on I-80 in Pennsylvania in the middle of nowhere....A wire harness was severed because it was not secured properly in assembly. I also have excessive wind noise, climate controls that do not move easily, a radio that sometimes shuts itself off, and a sync systems that works 10% of the time with my iphone.

During the congressional hearings, I didn't hear a single member of congress ask the Detroit 3 what they were going to do to become competitive in Reliability!!! The data is in front of everyone - but it just seems to be ignored.

You are right we need more effort on Reliability improvement. Regarding metrics - I would caution the use of MTTF as an indicator of Reliability performance. For most components, by the time MTTF is reached, more than 70% of the components will have failed (due to the skewness of most failure time distributions). We need to focus on the time until the initial wearout failures occur (B1, B5, etc.). Designs must be achieved that are robust against typical use environments for MORE than 40K miles.

Product Reliability is Key

I agree that reliability trumps 6-sigma/lean initiatives when it comes to customer satisfaction. While important to a company’s survival, 6-sigma/lean does not fully address the reliability issue as it relates to product design and manufacture. Customers purchasing big ticket items expect product quality from day one through a reasonable product lifetime.

My personal experience with GM vehicles has convinced me that they are unable to produce a reliable product. My family was a “GM family” growing up. Auto repairs were a way of life. After purchasing a few GM vehicles and completing numerous repairs, I bought a Japanese (gasp) vehicle. No repairs, no problems for over 100,000 miles. I have not purchased a GM product since – and likely never will.

I believe that this trend has taken hold in the appliance industry as well. Our new house was equipped with Amana/Maytag/Whirlpool appliances – same company, different branding. The dishwasher failed on the first cycle and was replaced. The handle broke after 4 years of service. The washing machine failed after 2 years and again after 3 years. The convection oven failed 3 times in five years with total repairs costing $350. This dismal performance is enough to make the Maytag Repair Man cry. I will never again purchase appliances from Amana/Maytag/Whirlpool. I just hope the company recognizes the path it’s on before it’s too late.