GLOBAL CHALLENGES

IT Lessons from Toyota`s Fiasco

Joe Maglitta | Date: 02-09-10 | Comments

Automakers� woes provide clear lessons for IT leaders and companies on sourcing, testing and communications. Yes, you can be too rich and too lean.

Even as woes unfold at Toyota Motor Corp. and Ford Motor Co., simple but important lessons on sourcing, testing and communications for IT leaders and companies are already clear.

Standardization demands caution. Initially, pundits were quick to link sticking accelerator problems with �lean� techniques at the heart of the Toyota Production System (TPS). Check this Wall Street Journal piece by Daisuke Wakabayashi:

�Toyota's recent problems highlight how certain elements of this approach -- eliminating overlap by using common parts and designs across multiple product lines, and reducing the number of suppliers to procure parts in greater scale -- can backfire when quality-control issues arise.�

It�s too early (and silly) to pronounce the �death of lean.� Standardizing on a single vendor, as many in IT and the industry know, can yield big economies in procurement and staffing. But it does seem a good time to ask: Can companies get too standardized? Too lean? At what point do lean processes hurt quality?

�There�s always a trade-off with standardizing parts across a company,� David Meier, a lean consultant, former Toyota group leader, and co-author of The Toyota Way Fieldbook told one publication. "The cost may be decreased in the short term, but the risk is increased."
The Toyota case should make us ask: �Would adding a second supplier improve risk management?� There�s something -- maybe lots -- to be said for not putting all your eggs in one basket, whether products, components or people.
Like I said, obvious. But, apparently, easy to ignore in the blinding fervor of religious cost-cutting. Doubly so when combined with rapid global expansion. (More on that in a moment).

Rush software and systems testing at your own peril. Each day�s new revelations confirm what many first suspected: Failing brakes and accelerators are, at least in part, software and systems problems. Specifically, rushing testing, validation and verification. Makes sense, insofar as today�s cars are essentially, as a New York Times article noted, �computers on wheels.�

Even if individual components work, that�s no guarantee that increasingly complex systems will. �Duh,� you say. �Everyone knows that.� Really? Tell that to armies of programmers and managers and directors and bosses sweating blood at Toyota and Ford this past weekend. Like not driving drunk or running red lights, the common sense thing is easy to understand, but hard for some to do.

Too bad. They should have listened to the Japanese Society for Quality Control. Good testing (along with good design), the group told the Journal, goes a long way in minimizing quality-control problems of widely used, standardized parts.

In Toyota�s case, a bold (and successful) decade-long campaign to supplant General Motors as the world�s largest automaker may have been a bigger culprit than lean manufacturing. It�s easy to imagine that grinding pressures to open new factories every month sucked up enough resources, lowered standards and heated production schedules that made it possible, even likely, to push through buggy brake software and accelerators vulnerable to RFI interference. Or worse.

Don�t hide problems. �Honest, ma. It was the floor mats!� It�s against human-survival nature and culture, corporate or national. But as any kid or governor can tell you, the whuppin� is even worse if you get caught lying later on. Honesty is not just for CEOs and sellers of poisoned painkillers. Fessing up early isn�t fun, but it hurts less in the long run. Even in your little corner of the working world.

Cost-cutting, never really out of fashion, has enjoyed a renaissance in the current global recession. Thus, consolidating suppliers will doubtlessly remain a popular strategy. So will �lean� manufacturing and lean approaches, including in IT, aimed at delivering greater value with fewer resources.

Should the economy keep improving in 2010, we�ll all soon be under new old pressures to expand, grab market share, do more with less, become leaner and meaner and more agile, etc.

Just remember: Conventional wisdom aside, you CAN be too skinny (lean) and too rich (overly ambitious). Sometimes a penny saved is a dollar burned. Just ask Toyota.