You can't put operational excellence on autopilot. Recently revealed quality issues at Japanese manufacturers reflect poor corporate governance and leadership failures, not a failure of lean manufacturing’s core principles.

Repeated and systemic quality inspection failures are only possible with management’s tacit permission or willful ignorance.

A recent Wall Street Journal article highlighted a rash of quality failures at Japanese manufacturing companies. The reporters implied that the quality and efficiency model popularized by the Japanese – which we have been helping clients understand and adopt for decades – is fatally flawed and, as a result, that the country’s reputation for producing high quality products is in jeopardy.

The quality issues cited included years of faked quality certifications, vehicle faults being covered up, and unqualified employees performing final inspections. All of which are serious discipline and process failures worthy of the public attention they have received.

The article reminded me of the news stories discrediting lean manufacturing and the Toyota Production System when Toyota was making headlines for reportedly faulty accelerators. In that case the public hysteria was as much about the slow corporate response to the potential problem as it was about the underlying issues. The point of failure then and in these more recent quality cases isn’t the management system, but leadership and corporate governance.

You Can’t Put Operational Excellence on Autopilot

Quality failures like those described above are only possible with management’s tacit permission or willful ignorance. Leadership at all levels is responsible for how work is executed and when it doesn’t meet customer expectations. Indeed, the WSJ article quotes one company’s internal investigation, which concluded that “executives were out of touch with the factory floor.”

Explanations offered for the systemic failures include quality staff reductions, outsourcing inspection, increasing reliance on temporary workers, “taking on impossible business” and management pressure to hit shipment deadlines and profit targets. Competition in industries like automotive and primary metals is ruthless. But that’s never a free pass to cut corners.

Regardless of what the root causes of these issues might be, a management system of any type requires rigor and daily discipline. Quality is a black and white question. It either meets the specs or it doesn’t. Pass or fail. If a parts or materials are outside the specs but are still acceptable to the customer, then it’s up to the engineers to adjust the specs. Operators should not be making judgement calls.

Culture is Formed by Both Leadership Action, and Inaction

Culture defines how your people work and behave, how they get ahead and how they define success. Over time, when any operation allows a product that does not meet the quality specs to pass through – to meet shipment deadlines or for whatever reason – it becomes part of the culture.

Finally, the WSJ article says the Japanese manufacturing model focuses on “eliminating unnecessary activity, reducing excess inventory and using teamwork to fix problems when they arise.” As we advise clients today, this is a limited, tool-focused understanding. In daily practice, lean is a management system with a constellation of tools, leadership mindset and culture that optimizes the performance of processes and people. Without engaged and disciplined leadership, without ethics and integrity as the foundation, it doesn’t work.

Business leaders have opportunities every day to demonstrate right behavior and reinforce the company’s management model and culture. It can be a daunting responsibility. We are not perfect. We will slip up. The best managers and leaders recognize and talk about their missteps, learn from them and move forward.

The Japanese manufacturers will undoubtedly learn from their mistakes. In fact, at its headquarters Toyota maintains a kind of shrine to the company’s series of recalls so everyone remembers the lessons they learned from that crisis.

What do you think?

Do you have any examples of leaders at your company setting a clear example despite market changes and pressures?