Is Toyota's Product Development System in Trouble?

For many years, most of us have looked to Toyota as the leader in automotive product development “know-how.” In fact, The Toyota Way – a term used to describe the methods and techniques employed by Toyota to ensure product quality – has been a must-learn management strategy for many in the industry for a number of years. But there’s trouble in Toyota land these days. And, according to the company, the blame rests – at least in part – on the engineering and design tools being used by the manufacturer.

Specifically, as noted in the recent article, Toyota May Delay New Models to Address Rising Quality Issues, Toyota vehicles are being recalled – in record numbers - for quality problems. And that’s giving Toyota cause for concern. In fact, the company is reportedly considering adding as many as three to six more months to projects that typically require two to three years of development lead time, in order to stem the growing tide of quality problems.

The question is, what’s really going on? Toyota engineers claim that mistakes are happening “because computer-aided engineering tools have limitations that allow potential design flaws to slip through.” But are the design tools really to blame, or is it something else?

No doubt, the pressures imposed by Toyota’s aggressive production schedule over the past several years are a key factor. In its quest to earn the top spot in the auto sector worldwide, the company has reportedly been pushing its engineers hard to compress vehicle development times and has been relying more heavily on virtual prototypes – rather than physical prototypes—in order to do so. In fact, according to officials at the Toyota product-development and engineering center in Ann Arbor, Mich., virtual-engineering tools have helped the company slash the number of prototypes per project from 60 to fewer than 20.

But such “shortcuts” on the front-end of the design and development process are ultimately responsible for causing the quality problems in production vehicles, claim some of those familiar with the matter. That’s bad news for engineering software providers like Dassault Systemes, which less than a handful of years ago, excitedly reported that it had earned Toyota’s business.

Specifically, IBM and Dassault Systemes announced in March 2002 the signing of a strategic agreement with Toyota Motor Corporation, to build a world-class collaboration around PLM Solutions covering “end-to-end vehicle development processes.”

In fact, in a press release on the subject, Ed Petrozelli, then general manager, IBM Product Lifecycle Management, is quoted as saying that, “IBM’s history of pacesetting contributions and investments in automotive technology combined with the unparalleled reach of our resources worldwide, including our world-class Virtual Product Innovation (VPI) teams, will help ensure Toyota’s success in setting new global standards for automobile manufacturing.”

Not surprisingly, the one making the apologies for any product failures today is Toyota President Katsuaki Watanabe. True to form, Toyota is taking complete responsibility for any defects in workmanship that may have resulted from its use of virtual-engineering tools.

The bottom line is that Toyota is going to great lengths presently to insure that any quality issues be resolved in short order. Undoubtedly, such a move will go a long way towards keeping Toyota customers happy. In the end, such a customer-centric view is what has enabled Toyota to be so successful to date – not its technology. Technology, after all, is only as powerful as the people behind it.