The trust that Japan's manufacturing industry has spent decades building up is being eroded. Shortcomings in quality control exposed at Kobe Steel and Nissan Motor have now been found at subsidiaries of Mitsubishi Materials and Toray Industries. Japanese manufacturers cannot hope to regain the trust they have lost unless the causes of these scandals are rooted out.
Group companies of Kobe Steel, Mitsubishi Materials and Toray, all manufacturers of industrial materials, were found to have tampered with data to falsely indicate that products they shipped to corporate customers met agreed-upon quality standards. In business, it is sometimes possible to deliver products that fall short of the promised specifications, provided that clients are informed and agree to accept them. That was not the case here.
Nissan and fellow Japanese automaker Subaru, meanwhile, admitted that they had allowed unqualified technicians to carry out pre-shipment inspections of finished vehicles.
The common thread in these scandals is the failure to strictly observe industry norms. Falsifying quality data, even if not a legal violation, is a breach of promise to customers and a betrayal of trust.
Mitsubishi Materials subsidiary Mitsubishi Cable, whose president has stepped down to take responsibility for its scandal, had continued to ship substandard products until October, even though its data manipulation had been discovered in February. While the president of the Toray subsidiary also stepped down, the group did not come forward publicly about the data fraud until more than a year after it had been detected.
Even assuming those manufacturers had communicated privately with their clients to confirm the safety of the products they supplied, their apparent reluctance to disclose this information to consumers in general is problematic. Allowing uncertified workers to conduct inspections of vehicles could be taken as a sign of contempt for consumers.
In corporate Japan, the efforts of manufacturers to meet their clients' needs have been a driving force in the pursuit of ever-higher product quality. It is essential for manufacturers to value their corporate customers and general consumers. Japanese manufacturers must rebuild their quality control systems from the ground up.
COMMUNICATION BREAKDOWN Investigation into the causes of these scandals is still underway, but it is evident from a number of sources -- including a report written by a team of lawyers working on the Nissan case -- that top management at those companies were largely ignorant of conditions at their own production sites.
Executives in charge of quality assurance at Nissan's plants had little understanding of the vehicle inspection process and did not know whether adequate manpower was available for the job. Management at Kobe Steel pushed sales drives without having an adequate grasp of its plants' production capabilities. Organizational structures that made it easy to overtax manufacturing plants created a breeding ground for fraudulent practices.
Each of these companies needs to create a flexible structure that brings together management and production site employees so that they can work together to quickly cope with any problems and make any necessary improvements. It is up to top executives to implement such restructuring.
Now may also be the time to reconsider current quality standards, rather than simply accepting them as they are, while ensuring that any potential changes will not undermine product safety.
Take, for example, the pre-shipment inspection of vehicles. Some experts have pointed out that this procedure has become a mere formality, since it is now far easier to detect flaws at each stage of the vehicle assembly process. Management at automakers may well ask workers at their plants for ideas about how to proceed with inspections. For this and other reasons, companies must create a culture that encourages employees of all ranks and divisions to communicate frankly. Rethinking how pre-shipment inspections are conducted to meet the changing realities is just one more challenge for Japan's manufacturers.