How did a single part made by a single supplier screw the world's biggest automaker?

[onewhippedpuppy]

Originally Posted by LubeMaster77

Considering the sophistication of processes and materials it would be imposable to be that vertically integrated. There are companies that are experts at injection molding while others rapid prototyping and still others metallurgy. Today, there are no companies capable of that sort of vast technical prowess.

The problem was that the procurement specification was not written tight enough...

True, that was me venting a bit from a bad day at work. Lets just say I wish we hadn't outsourced our wire-harness building to Mexico....

[kaisen]

Originally Posted by rsNINESOOPER

Its funny how everyone is bashing a company that has taken such extreme action such as ceasing sales and shutting down assembly lines to openly correct a problem. There is no way any of the American car companies would ever take the action Toyota has. There is a reason the great majority of the American car companies are absolute failures at this point, lack of leadership, vision, and build quality. That said they have vast potential and a labor force that can easily build quality cars, just come up with one that doesn't suck and mix in proper quality control and leadership. Oh by the way its too bad Toyota has been forced to build cars and parts in the US in order to be competitive (thanks government) because they seem to be the scourge of Toyotas recent problems- Tacoma frames were (outsourced) to Dana corp. Made in the USA.

You do realize that Toyota was LEGALLY OBLIGATED to cease sales. They didn't do it out of the goodness of their hearts.

[TechnoViking]

Outsourcing itself is not the problem. While this is a case of what can go wrong, the bottom line is it's no longer possible for a car maker to be completely vertical.

Specialization is key. Today's manufacturers are able to buy best-in-class components from anywhere on the globe, rather than being forced to "buy" every little bit and piece from their own factory.

Result: Overall today, cars are better, safer, more sophisticated than ever before, and they're still relatively affordable.

Yes, this is a big screw up. But Toyota getting into the pedal cluster component business is not the solution.

[kaisen]

CTS News Release

newsrelease

--------------------------------------------------------------------------------

CTS CORPORATION Elkhart, Indiana 46514 • (574) 523-3800






January 29, 2010

FOR RELEASE: Immediately


CTS Comments on Accelerator Pedals


Elkhart, IN…CTS Corporation (NYSE: CTS) today expressed its “deep concern that there is widespread confusion and incorrect information” about the role of CTS-manufactured gas pedals in the media coverage of the recent Toyota recall.

CTS stated that since the problem of sudden unintended acceleration has been reported to have existed in some Lexus vehicles and Toyota vehicles going back to 1999 when CTS did not even make this product for any customer, CTS believes that the rare slow return pedal phenomenon, which may occur in extreme environmental conditions, should absolutely not be linked with any sudden unintended acceleration incidents. CTS is also not aware of any accidents and injuries caused by the rare slow return pedal condition, to the best of its knowledge. CTS wishes to clarify that it does not, and has never made, any accelerator pedals for Lexus vehicles and that CTS also has no accelerator pedals in Toyota vehicles prior to model year 2005.

“We are disappointed that, despite these facts, CTS accelerator pedals have been frequently associated with the sudden unintended acceleration problems and incidents in various media reports,” said Dennis Thornton, CTS Vice President and General Manager of Automotive Products Group. Toyota itself has also publically stated that this recall is separate from the earlier recalls which were done to remedy sudden acceleration in vehicles.

CTS and Toyota continue to work closely in our partnership to resolve the slow return phenomenon.

[jyl]

Quote de LubeMaster77

Today, there are no companies capable of that sort of vast technical prowess.

The company I work used to be, a decade or two ago. Outsourcing has destroyed all of that. We have now lost that broad range of technical prowess.

Quote de LubeMaster77

problem was that the procurement specification was not written tight enough...

If a manufacturer has the technical knowledge to write the procurement spec tight enough, it's only because they have retained that prowess by staying in that area of manufacturing. Kind of a "catch 22" - if they are expert enough to write the spec, they are expert enough to build the part. If they have lost the expertise to build the part, they have also lost the expertise to write the spec.

If so, then how do companies manage to outsource successfully?

Obviously, many do. Boeing doesn't make many of it's parts, but boeings aren't falling out of the sky. Apple doesn't manufacture Macs or iPhones, but they work great. Ducati doesn't make many of the parts in their bikes, but you seem to like yours. Outsourcing can work just fine - the evidence is all around us.

[Turboo934]

"Tin Hair Syndrome"

[drew1]

I don't know if I'm ready to blame CTS yet. Remember the Firestones that were turning over Ford Explorers were built to Ford specs so they would not be as harsh riding as regular Firestones.

[onewhippedpuppy]

Quote de LubeMaster77

Today, there are no companies capable of that sort of vast technical prowess.

The company I work used to be, a decade or two ago. Outsourcing has destroyed all of that. We have now lost that broad range of technical prowess.

Quote de LubeMaster77

problem was that the procurement specification was not written tight enough...

If a manufacturer has the technical knowledge to write the procurement spec tight enough, it's only because they have retained that prowess by staying in that area of manufacturing. Kind of a "catch 22" - if they are expert enough to write the spec, they are expert enough to build the part. If they have lost the expertise to build the part, they have also lost the expertise to write the spec.

Very valid point. I am employed by a different airplane company with the same issue. 20 years ago we made everything with the exception of "black box" type LRUs like avionics. We literally input raw material and output airplanes, everything down to the material processing was done in house. As each capability was outsourced and the experts laid off, that knowledge base was eroded. It really is a catch-22.

I've come to the conclusion that very, very few companies do outsourcing well. I work with a lot of ex-"big B" employees, even they have their fair share of problems. Unfortunately the upfront savings associated with outsourcing are often dissolved by extra inspection and rework required for install. Nothing better than getting a supplier letter of disclosure stating that they have a quality issue, shutting down your assembly line. Or finding out after the fact that they've been implementing "minor" changes without your knowledge.

[1990C4S]

Originally Posted by Martin Smith

IMO, Toyota did not manage the supplier correctly. It appears from the Toyota statement in Lube's OP that two different materials were used in the manufacture of the pedals.

Did the supplier test both materials?
Did Toyota test pedals made with both materials?
Did Toyota specify the material to be used or did they leave it up to the supplier?
Did the supplier inform Toyota about the change in material or did they just start shipping without telling Toyota?
Does the supplier have an ISO or similar requirement that disallows changing the material without informing the customer?
Did Toyota perform an audit of the supplier's facility to confirm proper testing and safeguards are in place to prevent this kind of thing from happening?
Etc, etc., etc.

There's a lot we don't know, but clearly there was a breakdown between Toyota and supplier.

That is possibly true, it also quite possible it is completely false. On what basis do you make that claim? CTS's position has been quite clear, and while this may just be posturing my guess is that they have followed procedures to the letter. There are scenarios that support your statement and scenarios that destroy it. I simply don't understand how you can assess and assign blame prior to knowing the root cause.

Originally Posted by fingpilot

One word.

Outsourcing.

Outsourcing will neither cause nor cure issues that result from product design flaws. It is entirely possible this is a product design flaw. Building cars without outsourcing is not a viable option any more.

Yes, I am biased given my 'automotive production' background. But people are jumping to conclusions and making assumptions here. The facts aren't out yet.

[p911dad]

It looks like Toyota has fallen into the trap of when finding a solution to one problem, ie, gas pedal design for say a Camry, they have carried that solution to nearly the entire line of cars, a one fix fixes all arrangement. That may work not work all of the time, as GM, Ford and Chryser slowly discovered, that going to common platforms and parts makes for good accounting, but introduces a risk of extreme failure. In Toyota's case, that one common part has screwed nearly the entire line(we are still waiting for our 2008 4Runner to show up on the recall list as the gas pedal sure looks the one in recall picture). Similar risk exists in just-in-time inventory systems, where if one supplier of a specialty component goes down, good luck with keeping the line open. Toyota rolled the dice and came up snake eyes on this one.

[Jim Bremner]

Originally Posted by kaisen

You do realize that Toyota was LEGALLY OBLIGATED to cease sales. They didn't do it out of the goodness of their hearts.

THIS! I was part of a recall campaign.

Toyota knew of the problem for months but untill the .gov says recall they sold the product for months!

[911pcars]

Originally Posted by gmeteer

It looks like Toyota has fallen into the trap of when finding a solution to one problem, ie, gas pedal design for say a Camry, they have carried that solution to nearly the entire line of cars, a one fix fixes all arrangement. That may work not work all of the time, as GM, Ford and Chryser slowly discovered, that going to common platforms and parts makes for good accounting, but introduces a risk of extreme failure. In Toyota's case, that one common part has screwed nearly the entire line(we are still waiting for our 2008 4Runner to show up on the recall list as the gas pedal sure looks the one in recall picture). Similar risk exists in just-in-time inventory systems, where if one supplier of a specialty component goes down, good luck with keeping the line open. Toyota rolled the dice and came up snake eyes on this one.

This is a flawed philosophy. You're saying that manufacturing 8 variations of a pedal assembly reduces the risk of affecting all cars. That is correct and the risk of affecting all vehicles is minimized. However, not sure how many could afford a vehicle w/o common components to help amortize the huge engineering and production costs associated with this idea.

To carry your thought further, are you advocating car companies produce a single variation of a system for each of their vehicles (e.g. 8 vehicle models, = 8 different SRS systems (supplemental restraint system, aka airbag), 8 variations of ABS, 8 different steering systems, 8 door latch designs, 8 keyless entry/ignition systems, etc., etc., ? I can't think of one company that doesn't produce a single vehicle where this philosophy would keep them in business Car makers,

Maybe this one.

Sorry. Couldn't resist.

It's been already established that CTS isn't/wasn't the only supplier. Denso also produces a version of the pedal assembly in question. What is unknown are the engineering specs provided each vendor and how much leeway the vendor has in improving or modifying the part to meet the design objectives. If I were Toyota, I'd allow the component vendors to engineer the desired part based on minimum design and functional objectives. The vendor in turn, is expected to produce a part that meets or exceeds the design specs. It's up to the car company to test and approve the vendor component for mass production. After that, if the vendor changes the specs, they would be responsible for any issues arising from its use. That's been my limited experience in the auto industry. I could be wrong.

Good manufacturers reduce risk by employing good engineers practicing sound engineering principles in spite of a bean counter in the next office. Good management accurately estimates component creation, then balances the two depts. to arrive at a good product at a reasonable profit. Everybody's happy.

Sherwood

[p911dad]

Sherwood, my line of reasoning here is really about risk, and not about all that you wrote about. I wasn't advocating for or against any system of manufacture or manufacturing philosophy. When you put all your eggs in one basket you are assuming that things will turn out alright. Your remarks are valid for what you wrote and clearly know about, but I was clearly talking about risk. You can hire the very best engineers and run the quality flag up the pole and celebrate, but the fickle finger of fate can still strike, and when it is a common part to the entire line, it's gonna hurt.

[911pcars]

Originally Posted by gmeteer

Sherwood, my line of reasoning here is really about risk, and not about all that you wrote about. I wasn't advocating for or against any system of manufacture or manufacturing philosophy. When you put all your eggs in one basket you are assuming that things will turn out alright. Your remarks are valid for what you wrote and clearly know about, but I was clearly talking about risk. You can hire the very best engineers and run the quality flag up the pole and celebrate, but the fickle finger of fate can still strike, and when it is a common part to the entire line, it's gonna hurt.

Sure. I agree, but what's the alternative? And as I described, Toyota didn't put all their eggs in one basket, not that it makes any difference. See below:

Exclusive: TTAC Takes Apart Both Toyota Gas Pedal Assemblies – Denso Unit Looks Cheaper; Rumored To Be Recalled Too | The Truth About Cars

"In yesterdays post , we offered a bounty for anyone to open up both the CTS (bottom) and Denso (top) Toyota gas pedal assemblies. No one took us up, and no one anywhere else has done it, so we took it upon ourselves. And here they are, both e-pedal assemblies taken apart and examined, in our quest to understand if and what the significant differences are, and how Toyota’s possible “shim” fix would work. On initial observation, it appears that the CTS is actually a more solidly engineered unit, in that the pedal pivots on a traditional and solid steel axle whose bearings are brass sleeves. The Denso: its whole pivot and bearing surfaces are flimsy-feeling plastic. And according to sources within Toyota, the Denso unit will likely be recalled too. But the real question is this: are these units really the full source of the problem, or are they scape goats for an electronics and/or software glitch? Pictures and tear down examination and analysis follows:" More ..........



Sherwood

[1990C4S]

Originally Posted by gmeteer

Sherwood, my line of reasoning here is really about risk, and not about all that you wrote about. I wasn't advocating for or against any system of manufacture or manufacturing philosophy. When you put all your eggs in one basket you are assuming that things will turn out alright. Your remarks are valid for what you wrote and clearly know about, but I was clearly talking about risk. You can hire the very best engineers and run the quality flag up the pole and celebrate, but the fickle finger of fate can still strike, and when it is a common part to the entire line, it's gonna hurt.

The corollary is also true. If Toyota had eight different designs and one fails, the logical question is why didn't you use the other product ....why do you need eight designs...

[1990C4S]

Originally Posted by 911pcars

The vendor in turn, is expected to produce a part that meets or exceeds the design specs. It's up to the car company to test and approve the vendor component for mass production. After that, if the vendor changes the specs, they would be responsible for any issues arising from its use. That's been my limited experience in the auto industry. I could be wrong.

A design change would not be permitted without Toyota approval. Even a change in material would require their approval. Technically speaking. Not to suggest it couldn't happen, but it is not supposed to.

Originally Posted by 911pcars

Good manufacturers reduce risk by employing good engineers practicing sound engineering principles in spite of a bean counter in the next office. Good management accurately estimates component creation, then balances the two depts. to arrive at a good product at a reasonable profit. Everybody's happy.

Sherwood

The race to rock bottom costs (i.e. staying in business) as an automotive supplier has removed a LOT of good engineers.

[HarryD]

Originally Posted by 1990C4S

A design change would not be permitted without Toyota approval. Even a change in material would require their approval. Technically speaking. Not to suggest it couldn't happen, but it is not supposed to.

Yes it is required, but does it happen? Check my post (#17) for my thoughts on this type of requirement which, incidentally was imposed by a Japanese company on it's supplier.

[1990C4S]

Originally Posted by HarryD

Yes it is required, but does it happen? Check my post (#17) for my thoughts on this type of requirement which, incidentally was imposed by a Japanese company on it's supplier.

I don't know for sure, no one does at this point. But given Toyota's response it appears that the issue goes beyond CTS, and their other suppliers. I could be wrong, I am guessing, there are still a lot of cards to be played.

Let me be more specific and say that it is unlikely that CTS changed a component on purpose without advising Toyota. One of their suppliers could be at fault.

This could be a billion dollar hit to Toyota. No stone will go unturned.

[1990C4S]

Originally Posted by Turboo934

"Tin Hair Syndrome"

Elaboration requested....given that even the almighty google seems to be unaware of this term.

[onewhippedpuppy]

Originally Posted by 1990C4S

A design change would not be permitted without Toyota approval. Even a change in material would require their approval. Technically speaking. Not to suggest it couldn't happen, but it is not supposed to.

The aerospace industry controls supplier parts VERY tightly because of FAA certification, but this still happens all the time. Why? Because some moron at a supplier doesn't know the rules and thinks that their "minor" change is minor to everyone. My guess is that it happens even more often in the automotive industry.