[DeTomaso] NPC - Consumer Reports on Cars

[Charles McCall]

Consumer Reports Magazine just released their annual car issue in  which 
their subscribers report on problem areas for cars going back 5  model
years. Not 
to beat a dead horse, but GM and Chrysler cars have really bad  results. 
Ford's aren't the best but they aren't bad and some models are pretty  good.
As 
usual, Honda, Acura, Toyota and Lexus are unbelievably good. The German
cars 
aren't as bad as GM and Chrysler but they aren't really very good.
 
As much as everybody talks about buying American, this really paints a  
pretty dismal picture of the American manufacturers. Quality is an
engineering  and 
management issue. It's no wonder they are failing in the marketplace. 
 
****My two cents. Quality is an issue for everyone, not just management.
Engineers can develop processes that are easy to install or processes that
are a b*tch to get right. Management can help motivate workers to get
involved and be productive (or the opposite). Assembly workers have the
final say in whether the car is assembled correctly or not, and every
quality problem found by a consumer is an error that was made by a line
worker (that may have been subsequently undetected by inspectors). 

The German philosophy has traditionally been to "inspect in quality". We'll
have an army of inspectors at the end to try to detect any defects that may
be been built in, and another army to repair them. With so many layers of
inspection, most problems were caught before leaving the factory. Not all,
of course. In the 80's, 30% of Porsche's workforce was dedicated to
detecting assembly problems and fixing them. The cars that left the factory
were of exceptional quality, but at a very high cost due to the debugging
process required. Have to pay those armies of inspectors and repairers! 

The Japanese discovered long ago that the least expensive way to manufacture
a car is to avoid the mistake in the first place. Quality isn't expensive,
it's free. What is expensive is fixing a defect. It's also risky because the
final inspector can't catch everything. They began using anti-error devices
decades ago and began placing a lot of emphasis on "integrated quality" and
"self-inspection". Having an inspector at the end of the line and a repair
crew doesn't add value to the car from the consumer's point of view. Doing
something right the first time does. 

Porsche had a quality revolution in the late 80's when their company was
going through tough financial times. True story which I can provide numerous
references for those interested - consultants from Toyota went to Germany to
help Porsche become more efficient producing. The resistance was enormous as
you can imagine. "We're Porsche - we're great - what is Toyota going to show
us regarding producing cars???" 

Long story made short - quality improved dramatically. Costs dropped equally
radically. Porsche is now one of the most experienced and prestigious
consulting companies in Germany implementing "Lean Manufacturing", which is
what these techniques are commonly called. They've also been one of the most
profitable car companies (%-wise, not volume-wise) for years. 

There are millions of case studies (almost literally) that demonstrate that
companies that continue to manufacture using "traditional" techniques cannot
compete long term with companies using "Lean Manufacturing" techniques. They
are simply less efficient - it costs them more to manufacture the same
product, and the quality is inferior. Sooner or later, they'll lose. It's
happened in every sector. Looking at the Consumer Reports index, or any
other Quality Index for automotive manufacturers shows a direct, 1-1
relationship with the true implementation of Lean thinking. 

Implementing this system requires the involvement of everyone, from the CEO
to the cleaning lady. Without this involvement, it never happens. 

By the way, two months ago I drove my brand-new Audi A6 home from the
dealer. The first warning light lit before I reached home. (taillight out).
It's apparently an electrical problem, as the light works. I now have a
warning light that my rear foglight is out as well, and my cruise control
works sporatically. A shame because I really, really like the car. The
problems are minor, but they are problems.