U.S. Automakers Back on Top

July 14, 2010
Plant-floor and engineering quality improvements pay off for domestic OEMs.

At Ford Motor Co. quality starts with transparency. It's the type of seamless flow that seemed to escape the Dearborn, Mich.-based company in decades past but has become a key to its success over the past few years.

For instance, when Ford customers complain about quality issues, within 24 hours dealers send the information electronically to the plant floor where the issue is tracked to the person responsible for installing the part, says Adrian Vido, Ford's director for global manufacturing quality. In addition, each plant has cross-functional variability-reduction teams comprising representatives from various departments, including quality, engineering and production, who meet to review a particular customer's issue. "Adhering to standards and focusing on the inputs has never been as transparent as it has in the last three or four years," says Vido, a 30-year auto industry veteran.

General Motors' Lansing Grand River Assembly Plant in Lansing, Mich., received J.D. Power and Associates' North/South America region bronze award for only 37 problems per 100 cars produced at the facility. The plant makes the Cadillac CTS and STS. U.S.-based automakers as a whole scored higher than foreign competitors on J.D. Power's latest quality survey.The company's renewed focus on quality has paid off, according to the most recent J.D. Power and Associates Initial Quality Study released on June 17. It was the first time in the 24-year history of the J.D. Power report that U.S. brands as a whole scored higher than foreign competitors, though Chrysler still lags near the bottom with 122 defects.

Ford was the study's top-performing major brand with 93 defects per 100 vehicles, edging out Honda by two points and toppling Toyota by 24 points, which fell after its much-publicized recall. Ford moved into fifth place among all brands, up from eighth place last year and 23rd in 2004. General Motors Corp. also showed significant gains, combining with Ford to hold 22 models in the top three rankings for their respective segments. Since 2007 GM has reduced warranty repairs by 45%, the company said.

OnStar Keeps Quality on Track
General Motors Corp.'s OnStar navigation system does more than help drivers with directions or assist with vehicle lock-outs. The technology is now a player in the company's quality-testing processes. For years, OnStar has provided drivers with diagnostic information, such as oil life and mileage and engine or transmission issues. But now the system is being used to collect and record data during the test period of the vehicle-development process, says Maureen Foley-Gardner, director of product development quality. "We can tell a lot about a vehicle as it's driving around," she says. "We can understand squeaks and rattles and various other things about the vehicle." The goal, says Gardner, is to resolve any potential issues before they reach the customer.The rise in the rankings was due to a combination of Toyota's quality issues along with design and manufacturing improvements within U.S. automakers' operations, says Dave Sargent, J.D. Power's vice president of global vehicle research. "This year may be a key turning point for U.S. brands as they continue to fight the battle against lingering negative perceptions of their quality," said Sargent when the study was released. "However, there is still a long road ahead, and domestic manufacturers need to consistently prove to consumers that they can produce models with quality that equals or beats that of the import brand."

Some of the quality improvements come from the significant strides U.S. automakers have made in the area of lean manufacturing, says Ron Atkinson, past president and current fellow at the American Society for Quality in Milwaukee. Detroit automakers have been practicing lean for several years, but it appears that the companies' continuous-improvement efforts are finally beginning to mature, says Atkinson. The workforce has begun to accept that lean is beneficial and that it doesn't mean firing employees, he says. The waste reduction enabled by lean eventually leads to good quality. "If lean is done properly right from design to the customer receiving the product, you will have a quality product," Atkinson says.

General Motors has benefited from increased collaboration between its engineering department and assembly operations, along with more standardized production processes, says Joe Mazzeo, GM's executive director of global operations quality. "There is less and less separation than in the past where the organization tended to work in silos," he says. "Now we tend to work more across the organization to make sure we're successful as a whole. While we've had a lot of progress and success in manufacturing, it really doesn't come about without having good, capable product designs."

GM puts vehicles through an exhaustive validation process to ensure they meet customer requirements prior to their launch date, says Maureen Foley-Gardner, GM's director of product development quality. The company operates a test fleet of several hundred vehicles that they drive well beyond normal use to expose any problems, Foley-Gardner says. The information gained from these tests are used to develop completed vehicle inspection standards at the manufacturing level, Mazzeo says. The company also has removed as much decision-making as possible from plant operators to reduce potential errors, Mazzeo says. As an example, the company will prepackage certain vehicle options so they're installed consistently, Mazzeo says.

Vido says "serious adherence" to standards has driven quality improvements at Ford. He often reverts back to a Henry Ford quote from 1926 when he said the company must standardize what works and enhance standards if there's a more effective way to perform the task. The company has a set of about 60 "minimum-mandatory" procedures it expects plants to follow, Vido says.

The standards are taken seriously enough that each month CEO Alan Mulally reviews a management and problem-solving document, known in lean terminology as an A3, with quality team members to ensure the plants are meeting their goals and requirements, Vido says.

About the Author

Jonathan Katz | Former Managing Editor

Former Managing Editor Jon Katz covered leadership and strategy, tackling subjects such as lean manufacturing leadership, strategy development and deployment, corporate culture, corporate social responsibility, and growth strategies. As well, he provided news and analysis of successful companies in the chemical and energy industries, including oil and gas, renewable and alternative.

Jon worked as an intern for IndustryWeek before serving as a reporter for The Morning Journal and then as an associate editor for Penton Media’s Supply Chain Technology News.

Jon received his bachelor’s degree in Journalism from Kent State University and is a die-hard Cleveland sports fan.

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