Losing the Race
H. James Harrington
When it comes to quality, why can’t U.S. automakers
get their act together? The industry maintains some of
the most stringent controls over its suppliers, to the
point of developing its own quality standard--one even
more stringent than ISO 9001. To understand their competitors’ secrets,
U.S. automakers have bought into Japanese and European
firms. They form joint ventures with foreign firms and
do a lot of benchmarking to learn what best practices are
used throughout many industries. They make extensive use
of statistical process control. They reverse-engineer offerings
from Lexus, Infinity, Acura, Honda, Toyota, BMW and Mercedes-Benz.
They continually talk about quality and customer focus.
They claim that the customer is No. 1.
Certainly the actions they have taken are important steps
forward, but results are what count, and the U.S. auto
industry isn’t producing the desired results. J.D.
Power and Associates reports that only two of the top 10
automobiles offering the best quality (i.e., lowest number
of problems per car) are U.S. brands. It also shows that
of the 18 cars whose quality is below average, 10 of them
are U.S. brands. The best quality car is Lexus at 1.73
problems per car. The best U.S.-manufactured car in terms
of quality is Lincoln at 2.53 problems per car--almost
50 percent worse than the Lexus.
Although it’s true that the quality of U.S.-made
cars has improved, manufacturers haven’t improved
enough to reestablish the United States as an average car
producer, let alone a leader. Until recently, General Motors
Corp. and Ford Motor Co. were first and second, respectively,
in auto sales around the world. Now Toyota has stepped
into the No. 2 spot, pushing Ford to third place. And,
if Toyota continues to grow its market share at the rate
it has been, the company will take over the first-place
spot within the next three years.
If U.S. automakers can’t take the time to produce
a quality car, then they must be more productive and build
their cars in a shorter cycle time with less labor. But
we fail in this area also. Domestic automakers lag behind
Japanese automakers in productivity. This hurts U.S. automakers’ profitability.
The most efficient automaker in North America is Nissan,
according to the Harbour Report. It takes Nissan 17.4 hours
to assemble a car, half the time it takes DaimlerChrysler
at 31.3 hours. This productive edge gives Japanese auto-makers
a $500-to-$600-per-car advantage over U.S. automakers.
This situation reminds me of a conversation I had at
an EOQ conference in Frankfurt, Germany, during the early
1980s. I was having dinner with a well-known automotive
quality professional from Germany and a quality professional
from Russia. As the evening progressed, we began to debate
which country produced the better cars--Russia or Germany.
The Russian was adamant that his country had the best cars,
and the German was equally convinced that his country took
the honors. The argument went on for hours. The Russian
pointed out the accuracy of Russian car specifications,
the completeness of designs and the high tolerances required.
The German, on the other
hand, bragged about the craftsmanship, the perfect fits,
the special features and many awards his country’s
automakers had won. By the end of the evening, the three
of us had come up with a mutual agreement: Russians had
the best specifications, but Germans built the best cars.
Being a world-class leader in the auto industry--or any
industry, for that matter--requires meticulous attention
to detail and an excellent understanding
of how the customer will use the product. A good design
is a starting point. Job-related training for employees
provides them with the potential to do exceptional work,
provided they have the equivalent material and tools. For
U.S. automakers, it’s important that they provide
all their employees with problem-solving training because
our designs and training are inadequate, which causes problems
rather than solves
them.
The real key to quality and productivity, and the only
way U.S. automakers can reach the pinnacle of excellence,
is by building pride in each worker, from the guard at
the front gate to the operator running the lathe. Each
employee must commit to becoming more productive and more
creative. Everyone must go beyond simply meeting job specifications
and continuously best those requirements, replacing them
with creative new concepts that wow the final customer.
Today’s standards require each employee to implement
two improvement ideas related to his or her job each month.
It’s up to the automakers to motivate their employees
to sustain this goal.
H. James Harrington is CEO of the Harrington Institute
Inc. and chairman of the board of Harrington Group. He
has more than 45 years of experience as a quality professional
and is the author of 22 books. Visit his Web site at www.harrington-institute.com.
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