• The Prius was among the models recalled recently by Toyota because of problems involving sticking accelerator pedals and brake systems.

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3 Questions: Steven Spear on Toyota’s troubles

With the vaunted Japanese automaker recalling millions of cars, the MIT senior lecturer explains what went wrong


For decades, Toyota has been viewed as a paragon of corporate improvement, innovation and effectiveness, qualities that helped it become the world’s largest automaker. But the firm’s reputation has been sorely tested in recent weeks amid a string of well-publicized recalls involving millions of Toyota vehicles due to problems involving sticking accelerator pedals and brake systems. In the words of Toyota’s president, Akio Toyoda, the firm is “in a crisis.”

Steven Spear, a senior lecturer in MIT’s Engineering Systems Division, is one of the leading experts on Toyota’s management system. He wrote about the topic extensively in his book, Chasing the Rabbit: How Market Leaders Outdistance the Competition (McGraw-Hill, 2008), and in a 1999 Harvard Business Review article, “Decoding the DNA of the Toyota Production System.” With Toyota in unprecedented turmoil, MIT News talked to Spear about the Japanese automaker’s problems — and potential solutions.

Q. What went wrong with Toyota?

A. What went wrong with Toyota is the flip side of what went right over so many decades. In the late 1950s or 1960s, Toyota was a pretty cruddy car company. The variety was meager, quality was poor, and their production efficiency was abysmal. Yet by the time they hit everyone’s radar in the 1980s, they had very high quality and unmatched productivity. The way they got there was by creating within Toyota exceptionally aggressive learning. They taught employees specialties, but more importantly, they taught people to pay very close attention to the “weak signals” the products and processes were sending back about design flaws, and then responding with high-speed, compressed learning cycles to take things that were poorly understood and convert them into things that were understood quite deeply.

That allowed Toyota to come from behind, race through the pack, and establish itself as the standard-setter on quality and efficiency. But since then, things have affected Toyota in terms of their ability to sustain this kind of aggressive learning.

One was just the sheer growth of their business. Toyota historically had operated out of their base in Japan, Toyota City, and was largely an exporter. Then in the 1980s they opened up plants in California and Georgetown, Ky., and over time added plants in China, Europe and so forth. And that put a burden on developing people at those plants and the regional supply networks that supported them. Toyota had traditionally depended on a very intimate mentoring-apprenticeship model, where someone might have a coach for up to two years — a real Karate Kid-like approach to developing people. But the sheer number of people in a given year who had to be in this mentorship model went up. And I think Toyota got in trouble because they just overburdened that capacity — not necessarily the technical capacity, but the capacity to develop people.

Q. So the drive to become number one seems to have affected them?

A. Yes, but also, when you look at the auto industry as a whole, the mid-1980s was something of a watershed as you go from mechanical cars, as they were in the 1950s and 1960s, when everything was just steel — engines, gears, bodies — to being electro-mechanical with highly intertwined electronics. If you look at the modern car, the amount of computation on board with traction control, anti-lock braking systems, air bags, cruise control, navigation, entertainment, and more, makes it a very sophisticated, complicated machine, far beyond anything made 20 years prior. Bringing electronics on board brought huge advances in performance and reliability but with it came an exponential jump up in the complexity of the systems you’re managing. And the complexity puts even more demands on the concept of aggressive learning, that is, building something, paying attention to what’s wrong, and rapidly doing the experimentation to make it better and better. In short, the mentorship concept gets doubly stressed — by the need to scale up and by products and processes that are far more complex.

Q. What can Toyota do now to fix things?

A. There are three challenges: technical, organizational and public relations. The basic questions of why do accelerator pedals stick, why do braking systems suffer difficulty — I have confidence that Toyota will concentrate their engineering talent on those problems and make them go away. And I’ll leave others to comment on how you manage the public relations side in skillful fashion.

But then there’s the organizational piece: How do you develop people more quickly? The good news is that some people in Toyota seemed to see this problem coming five to 10 years ago, as I mention in my book, and started to build new ways into the organization of teaching people that didn’t depend on this very slow-moving mentorship model. Obviously they have to step up their understanding of how to develop people more quickly.

In terms of thinking ahead, when I first studied Toyota I noticed they had this kind of cultivated paranoia. Every time I would try to compliment people at Toyota about their success, they would say, “Wait a minute, hold on. Don’t compliment us. GM, the sleeping behemoth, may awake.” Or “Who knows if Kia will develop the capacity to catch us, like we caught others.” Then there was, “In China there must be 1,000 car companies, and we can’t even name them all, let along identify the one that may catch us.” So I think this really bad product failure is probably fuel for another two solid decades of cultivated paranoia. If there was a complacency problem at Toyota, which there may have been, my goodness, if this doesn’t flush that out of the system, nothing will.


Topics: 3 Questions, Engineering Systems, Automobiles, Manufacturing, Recall, Toyota, Transportation

Comments

The discussions about Toyota recalls is a bit one sided. It would be more fair to talk about this in contrast with other historical automotive recalls. For instance, Despite the scale of Toyota's woes, its recall is not the largest in automotive history, and other companies that have suffered similar stumbles have recovered. The top five car recalls of all time -- all involving American companies, and not including Toyota's latest, which would rank third on the list -- look like this: 1. Ford. In 2009, Ford completed a series of recalls spanning 10 years and affecting 14 million vehicles, including Lincoln and Mercury SUVs, pickups, vans and cars released from 1993 to 2004. The problem was a cruise-control switch that had a tendency to catch fire -- even when the vehicle was turned off. 2. Ford. In 1996, Ford had another fire-related problem. Hundreds of customers complained of conflagrations stemming from faulty ignition systems, which led to a recall of 8.6 vehicles, including Escorts, Mustangs, Tempos, Thunderbirds, Cougars, Crown Vics, Grand Marquis cars, Lincoln Town Cars, Aerostars, Broncos and F-series trucks. 3. General Motors. In 1971, GM recalled 6.7 million vehicles after reports, aired by consumer advocate Ralph Nader, that "[s]cores of engines on Chevies made from 1965 to 1969 ... were twisting loose from car frames, sometimes with the frightening result that the auto's accelerator pedal was pulled all the way down to the floor and the brakes failed." 4. GM. In 1981, GM recalled 5.8 million vehicles after reports about suspension bolts in certain models coming loose and leading to steering malfunctions. Among the affected models were the Buick Regal and Century; Chevrolet El Camino, Monte Carlo and Malibu; Oldsmobile Cutlass; GMC Caballero; and the Pontiac LeMans and Grand Prix. 5. Ford. In 1971, Ford recalled 4.1 million 1970 and 1971 models of several vehicles in which seat-belt shoulder harnesses were found to fray and detach from the metal binding them to the frame. This should give some balance to the subject of recent recalls. Thane
Are these statistics supposed to justify or minimize the tragedy related to this and other recalls? The media moguls sold Toyota as the better choice, top quality, etc. The point is, this wasn't supposed to happen with a company like Toyota. To be "not as bad" as the other guys doesn't cut it. The buying public was sold on the idea that Toyota didn't exhibit the problems akin to North American vehicles.
Your point about the increased complexity is well made. Too, it's worth noting that for things electrical, there can be no visual inspection without going off-line; a person simply cannot see either electrons, or potential. Quality becomes seperated from assembly and rests with the supplier and the engineers. The TPS has been made less relevant by this complexity, in the end.
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