Toyota is widely regarded the pinnacle of Quality, while Ford is left in their wake. Last year, Toyota made a 10.3% profit INCREASE, to USD 20,000,000. Ford wallowed with a USD 1,300,000 LOSS.
Despite Ford's 34 year head start on Toyota, the latter is now three times the size of Ford and makes twice as many vehicles.
Ford's Six Sigma program focuses on cost savings at the expense of Quality. The result is a collapse of both Quality and profitability.
Toyota focuses on Quality. Their great profitability is a consequence of their great Quality.
The Japanese learned Quality from Deming in the 50's. The classic Ford transmission study showed that Ford was aware in the 70's that their focus on the specification and defects, produced inferior product. Ford knew the Japanese focus on the process and reducing variation, produced superior Quality.
Ford was rescued from disaster in 1982 by Professor Deming. Between 1979 and 1982, Ford had incurred $3 billion in losses. Deming helped return Ford to profitability in just 4 years. Sadly, Professor Deming's contribution was forgotten. If Ford had continued with Professor Deming's methods, they may have pulled ahead of Toyota.
Instead, in 1999 Ford bought Mikel Harry's Six Sigma Snake Oil and went back to counting defects.
If Ford had bothered to investigate, they would have discovered that Harry's hype was laughably based on the height of a stack of discs! It was blatant fraud from the outset. Like many other companies, it cost Ford dearly.
Ford had plenty of defects upon which to focus. An 8 year study of Ford's 3,277 "successful" DMAIC projects showed an average of 220,296 dpm AFTER "improvement". Yes, that's worse than 1 in 5, with a total of 722,000,000 defects AFTER improvement.
By contrast, Toyota has used Professor Deming's methods since the 1950's:
"There is not a day I don't think about what Dr. Deming meant to us. Deming is the core of our management."
- Shoichiro Toyoda, Chairman and director of Toyota
Rather than spending months in "rudderless" DMAIC projects, as Bhote described them, and having pseudo "experts" with coloured belts telling workers how to suck eggs, Toyota respects and engages workers in Quality. Front line, Quality Circles improvement teams, build in Quality. By keeping it simple and focusing on Quality fundamentals, Quality Circle teams at Toyota have achieved over 2,000,000 process improvements. For example, one such improvement saved 15 employees; reduced the possibility of incidental damage to piston rings; and saved Toyota hundreds of thousands of dollars.
The message is clear. Avoid fads and farce like Six Sigma. Stick to Quality from the giants: Professor Lewis; Dr Shewhart; Professor Deming; Dr Wheeler.
"Dr Deming's now famous '14 points of management' when followed, appear to move organizations towards prosperity" - Mr Bill Smith
