Sunday, September 7, 2014
Toyota and the Dabbawallas: Using Culture to Create Quality
Toyota’s production system (TPS) is centered on precision and simplification to reduce variability (Spear, Bowen). Like many production models, all work in the TPS is highly specified, each worker knows the exact person who will provide what to her and when, and the product follows a simple, specific path. However, something that sets the TPS apart from other methods is its emphasis on improving processes, flow and worker/machine connection through use of the scientific method at the worker—not the managerial—level.
What is most striking about this is 1.) that Toyota’s decentralized process improvement scheme gives more responsibility and power to employees; and 2.) this scheme is one of the ways Toyota invests in human capital to ensure product quality. Toyota’s model gives its employees the power to deduce the right course of action and implement it in the larger system—employees are trained in a framework (hypothesis development and testing) that they can then use to develop their own cognitive skills by troubleshooting problems and improving processes. While Toyota’s approach to production is extremely specific and tightly controlled, the company gives its employees a greater degree of control of and responsibility for improving their specific area of operation. It’s a model that provides the flexibility for improvement with the simplification needed to reduce variability during production.
This model also demonstrates the importance of organizational culture—specifically how human capital is managed—in a supply chain. The Dabbawallas and Toyota use training and management structures to create cultures where employees are highly engaged in jobs that might be considered somewhat monotonous to an outsider. The Dabbawalla’s rigorous year-long training and extensive vetting ensure that employees are committed to upholding the Dabbawalla’s reputation for speed, quality of service, and accuracy. Toyota’s emphasis on the Socratic Method in employee training and its program that allows employees to become circulating consultants for a one–year stint creates a culture where learning and process improvement is integrated into every level of production. This, in turn, creates a culture where employees have both a direct stake in improving the quality of the overall product and in improving the quality of their skills. Other companies, such as Starbucks, have employed similar models to great success.
TPS has also proven successful in large part because it also supports the company’s image as a producer of a high-quality product. TPS satisfies several dimensions of product quality (as outlined by Bohn), including core performance, reliability, and serviceability. As any Prius owner might tell you, Toyota’s reputation for quality also feeds into consumer identity—that owning a Toyota says that you’re into safety, energy efficiency, etc. While this type of brand identity is generally an asset, in 2009 and 2010 it turned out to be somewhat of a liability when Toyota recalled several models when issues with “unintended acceleration” led to several deaths. Despite the fact that GM had also had recalls during the same time period, Toyota experienced a far greater drop in stock price and sales than GM did. Why? There are several reasons outlined here, but the most prominent is that the recalls tarnished Toyota’s image as producing a safe, reliable product, thus breaking the brand/product identity that many consumers had had with Toyota. GM had a long history of product defects, so its brand identity was not dependent on safety or quality but on image. This makes sense, considering Toyota’s main customer is someone looking for fuel economy and reliability while GM’s customer is looking for a SUV that satisfies a certain consumer image but will probably flip over during a right hand turn.
Like the Dabbawallas, Toyota understands the importance of customer engagement to uphold quality. So, in light of the recalls, the com has undertaken an aggressive social media campaign to involve its customers and to identify and address any issues at the individual customer level before they get too big. In this way, Toyota is beginning to work with with its customers in the same way that it engages with its employees--by engaging them to quickly address problems and ensure quality.
Decoding the DNA of the Toyota Production System, Steven J. Spear and H. Kent Bowen, Harvard Business Review.
Managing Quality, Roger E. Bohn, Harvard Business Publishing Core Curriculum in Operations Management, Roy Shapiro, Series Editor.
Inside Starbucks's $35 Million Mission To Make Brand Evangelists Of Its Front-Line Workers, Fast Company, Accessible online at http://www.fastcompany.com/3002023/inside-starbuckss-35-million-mission-make-brand-evangelists-its-front-line-workers.
The Cult of Toyota, Advertising Age, adage.com, March 1, 2010. Accessible online at http://adage.com/article/news/social-media-cult-toyota/142335/.
Why a Massive Safety Recall Hurt Toyota More, Forbes.com, July 1, 2014. Accessible online at http://www.forbes.com/sites/kbrauer/2014/07/01/why-massive-safety-recall-hurt-toyota-more-than-gm/.