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

[M.D. Holloway]

toyota quality concerns shut down north american production
how did a single part made by a single supplier bring the world's biggest automaker to its knees?
Dave hannon -- purchasing, 1/27/2010 4:05:30 pm

what's your solution?
To weigh in on this issue and provide what you think toyota should do, read "toyota quality fiasco: What's the solution" on purchasingbizconnect now. How does it come to this? One of the world's largest companies has stopped selling its most popular product lines to the biggest market in the world.

Toyota this week has taken the unusual step of actually discontinuing sales-not just recalling, but telling dealers to stop selling-eight of its vehicles in north america until problems with its accelerator mechanism can be fixed. As a result, the company will also stop production at five north american plants for the week of february 1.

The source of the recall and shutdown is a faulty accelerator. According to its recall filing with the national highway traffic safety administration, the part is made for toyota by supplier cts corp., which makes pedal modules for toyota at a plant in ontario. Cts was recognized by toyota in 2007 for "outstanding quality performance" and the accelerator issue has brought to light a host of questions about toyota's production and supplier management strategies.

One explanation being floated for this massive quality failure is that toyota's growth strategy, combined with a greater emphasis on costs, has driven a wedge between toyota and its suppliers. Former toyota president katsuaki watanabe acknowledged that one of the reasons for toyota's growing quality woes globally was the company's emphasis on expansion. (before his ousting, watanabe was driving a major quality push at toyota.)

and that growth strategy is certainly evident in the north american market. In a 2008 interview, chris nielsen, vice president of purchasing at toyota motor engineering & manufacturing north america, told purchasing of his company's plans for new plants in north america. He emphasized that "we'll be localizing vehicle production so most of the parts and materials will be localized."

but how much expansion is too much for a struggling supply to support? Clearly at some point, toyota has taken its eye off the supplier-management ball. North american suppliers don't view toyota the same today as they did in years past. According to an annual survey of north american suppliers done by planning perspectives, toyota's ranking by suppliers, while still high, has declined almost 20% in the past two years.

John henke, of planning perspectives, says, "they're not keeping as close a watch on how suppliers are performing and they're not letting suppliers know how they are performing. They're a malaise in the toyota way. There's an increasing number of recalls and we're hearing it from suppliers about how toyota treats them."

"toyota is becoming just another automaker" he says in regards to its current supplier management strategies.

One needs go no further than this week's issue to see evidence of toyota's new approach to supplier management. According to a wall street journal report, toyota has been investigating the latest quality problem without the supplier's input in this case, despite the fact that toyota does not know what the problem is. In fact, cts officials said they company learned of toyota's sales and production halt on tuesday from news reports and still have not been contacted in connection with the ongoing investigation by the national highway traffic safety administration into the sticky accelerator pedal reports.

And that's not the way to solve a parts problem, says henke. "you could have a design problem that is only evident when you see how the part is made," says henke, adding that toyota historically was famous for its analysis of such issues. "it seems in this case they are trying to go it alone and that matches up with what suppliers have told us." what's the problem here?
According to its filing with the national highway traffic and safety administration, toyota describes the problem as such:


"due to the manner in which the friction lever interacts with the sliding surface of the accelerator pedal inside the pedal sensor assembly, the sliding surface of the lever may become smooth during vehicle operation. In this condition, if condensation occurs on the surface, as may occur from heater operation (without a/c) when the pedal assembly is cold, the friction when the accelerator pedal is operated may increase, which may result in the accelerator pedal becoming harder to depress, slower to return, or, in the worst case, mechanically stuck in a partially depressed position. In addition, some of the affected vehicles' pedals were manufactured with friction levers made of a different material (pa46), which may be susceptible to humidity when parked for a long period in hot temperatures. In this condition, the friction when the accelerator pedal is operated may increase, which may result in the accelerator pedal movement becoming rough or slow to return. In light of the similarity with one of the symptoms described above that are associated with the pps material, toyota has decided to include these vehicles in the defect determination."

###

[fingpilot]

One word.

Outsourcing.

[WolfeMacleod]

SOunds to me like this CTS Corp is the same CTS that makes potentiometers for guitars...

CTS Corporation - EC, Sensors & Actuators, EMS!

[masraum]

Originally Posted by WolfeMacleod

SOunds to me like this CTS Corp is the same CTS that makes potentiometers for guitars...

CTS Corporation - EC, Sensors & Actuators, EMS!

Oh No! Next thing will be guitars that are out of control. "I turned the knob to 5, but it went to 11 and wouldn't come back down!!!

[MRM]

Clearly third world made outsourced junk. Company is based in Indiana. Product manufactured in Canada. What kind of cheap third world countries are we running here?


The stuff went to China where Ford installs it in trucks for sale in the Asian market. Ford's recalling the whole batch. Somewhere Sniper's Chinese doppelganger is complaining about cheap POS component parts from North America.

[trader220]

One word.... Lawyers

[TechnoViking]

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.

[legion]

So now Toyota is blaming a supplier?

[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.

[cashflyer]

This is just Toyota's excuse to shut down production for a while and screw the hard-working, honest Union employees who make the auto industries in America the envy of the world.

[targa911S]

Originally Posted by masraum

Oh No! Next thing will be guitars that are out of control. "I turned the knob to 5, but it went to 11 and wouldn't come back down!!!

Aren't ALL guitar knobs stuck at 11?

[trader220]

Originally Posted by cashflyer

This is just Toyota's excuse to shut down production for a while and screw the hard-working, honest Union employees who make the auto industries in America the envy of the world.

What good does it do them to screw the Union guys? Also what about all the non union people like sales people, lot guys, sales managers, franchise owners,. Since according to you they are out to screw the union do they want to do that at the expense of so many others?

[equality72521]

Originally Posted by cashflyer

This is just Toyota's excuse to shut down production for a while and screw the hard-working, honest Union employees who make the auto industries in America the envy of the world.

Should this text be green?

[911pcars]

Originally Posted by cashflyer

This is just Toyota's excuse to shut down production for a while and screw the hard-working, honest Union employees who make the auto industries in America the envy of the world.

Toyota manufacturing plants are, on the whole, non-union. Sure, Toyota stands to lose billions and their reputation, just to screw the non-existent union members. Right. Try another theory.

As serious as this "defect" might be, if the same thing happened on a door hinge, it would be a simple recall and fix. No biggie.

Anyone familiar with the plastic bushings in a Porsche pedal assembly and how they deteriorate when the master cylinder leaks BF? Different symptom, but the consequences could have been different as well.

The Toyota (and all manufacturers') throttle-by-wire pedal assembly contains a potentiometer that provides feedback to the ECU as to throttle pedal position. The ECU then signals a servo motor in the throttle motor assembly to open and close the intake throttle valve according to driver input and other operating condition parameters (cold start, AC idle, etc.). Is it the pedal assembly, the throttle motor assembly or ????

It could just be a matter of millimeters. The pedal assembly might have an undersized pivot bushing (if at all) that prematurely wears and binds normal movement, or perhaps heat, bent linkage, crack or moisture or ? in the housing produces the same effect. Or, Toyota could be fishing for more time to research/repair a more complex fix - a random error code in the ECU ROM (read only memory) programmed at the factory. That's been previously speculated. One theory: If the CTS units were the real culprit, they could have ramped up prior to this and replaced them with the functionally equivalent Denso-made version and avoided all the fanfare and neg. press.

OTOH, customers expect a new vehicle to work as designed despite the fact vehicle electronics are as complex as they are. The typical modern vehicle can have upwards of 20 ECUs and a multitude of sensors and actuators buried within the vehicle chassis. What happens 15 years down the line is usually not the worry of the manufacturer.

I wonder who's to blame when an accident avoidance sensor (Lexus, MB and others) fails to prevent a collision? No wonder the price to drive is going up.

Sherwood

[cashflyer]

This sort of thing would have never happened if Toyota had used the hard-working, honest Union employees who make the auto industries in America the envy of the world.

Fixed.

[onewhippedpuppy]

One word.



Outsourcing.

Bingo. Usually it's easier to just build the parts yourself. Typically outsourcing looks good on paper.......and that's where it stops. I've seen it in person numerous times.

[HarryD]

In addition, some of the affected vehicles' pedals were manufactured with friction levers made of a different material (pa46), which may be susceptible to humidity when parked for a long period in hot temperatures.

Sadly, suppliers make changes all the time. some time they get caught and sometimes they don't. Sometimes they tell the customer ahead of time, sometimes they don't.

True story: A former employer of mine used a wax to polish their product. The wax was from a quality supplier and while not specifically made for our use, the formulation worked better than just about everything else on the market.

In their supply contract, they were required to notify us of any changes to the product (so we could verify the product was still ok).

At one point, we suddenly were unable to meet our product specifications. Once the problem was apparent, an initial review of the products and processes used in the production showed no apparent changes before and after the date of the problems.

An investigation (taking 3 months) led us to finally figuring out it was the wax. When we challeneged the wax maker, the inital response was nothing changed. When we showed hm the data, he finally admitted they made a change at precisely the lot number used where the problem began. His defense, "We were improving the product and did not think such a minor change would matter." This line of reasoning cost us millions in lost sales and production and forensic investigation.

Sound familiar?

[911pcars]

Originally Posted by cashflyer

This sort of thing would have never happened if Toyota had used the hard-working, honest Union employees who make the auto industries in America the envy of the world.

Fixed.

Do I have to remind you that US car manufacturers have had issues with vehicle safety too? Let's see: Ford Pinto gas tank, GM P/U gas tank, Ford SUV rollovers, sub-par build quality, etc. The fact that they were built by union workers may or may not be independent of the cause or fault.

Waving the flag is fine, but let's not do it blindly.

Sherwood

[M.D. Holloway]

Originally Posted by onewhippedpuppy

Bingo. Usually it's easier to just build the parts yourself. Typically outsourcing looks good on paper.......and that's where it stops. I've seen it in person numerous times.

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...

[Jeff Higgins]

Originally Posted by 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.

Originally Posted by 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.