15.2 Introduction

Within the National Football League (NFL), the New England Patriots stand as arguably one of the most dominant dynasties in any professional sport. From 2001 to 2019, the Patriots managed to have 19 consecutive winning seasons, compiling a regular-season record of 232–72 (76.32%), nine straight division championship appearances, and six league championship wins.

To those who don’t watch American football, one might be inclined to believe that the Patriots have consistently filled their team with the best players. It may surprise you to hear that the years the team won league championships were not the same years they had the highest number of players represented in the league’s all-star game (Pro Bowl). In fact, two of their championship teams had only two all-star players!

What’s their secret? The coaching staff knew exactly how to get the most out of every player on the roster by having everyone work together to win games against teams that contained—in a player versus player comparison—more talented players!

Building a winning supply chain is similar to assembling a great sports team. Having a championship-caliber supply chain is more about getting the most out of each company than simply putting together the leaders of each respective industry.

That’s what this topic is all about: how to ensure that you have the right processes in place to synchronize processes, align goals, and encourage your suppliers and customers to collaboratively drive out errors and minimize waste. For instance, Toyota’s secret to success is not just its exalted Toyota Production System (TPS). Instead, it’s how Toyota works with its suppliers and dealerships to deliver a high-quality and reliable customer experience ranging from vehicles to services.

The inability to recruit the right supply chain partners can be costly. We don’t need to look very far from Toyota to find one of the most costly mistakes in automotive history. Consider this: Honda incurred a $5 billion charge to replace faulty Takata airbag inflators in 2017. Costs increased as the recall expanded substantially in scope. Despite the recall efforts, deaths attributed to the faulty airbag inflator continue to rise even in 2021. Moreover, class action settlements related to Takata airbag inflators continue to haunt major automakers ranging from BMW to Toyota. Just what went wrong?

Up until the airbag recall, Takata Corporation was one of the most ubiquitous and dominant suppliers that consumers have never heard of in the automobile industry. Their airbag inflators were installed in at least one model for all major automakers. As of 2014, Takata commanded 20% global market share with production facilities spanning four continents. Yet, all it took was one single component substitution—ammonium nitrate—as the company pursued a cheaper airbag propellant as an alternative to the pricier but far more stable chemical compound tetrazole, to trigger the largest automotive recall in world history.

Of course, no automaker intends to install faulty modules in their vehicles, especially for parts that are supposed to save lives and not potentially do the opposite. Moreover, Japanese manufacturing philosophy and processes have made significant contributions to lean and quality management. That is why it was especially shocking to the automotive world to see a Japanese supplier taking the center stage as the source of one of the most costly quality defects in automotive history.

To understand just why so many automakers are impacted by this ironic, potentially deadly defect and subsequent recall, we first need to look at how companies such as Toyota determine whether a supplier is qualified to provide modules to their vehicles:

1. They identify companies as potential suppliers.

2. They meet with the suppliers to discuss business opportunities and ascertain supplier capability.

3. They extensively audit each supplier’s product development and manufacturing processes.

4. They apply strict quality specifications based on each product’s intended use.

5. They make suggested improvements and help suppliers to improve their quality up to the internal standards of the automaker.

6. They continuously monitor and assess a potential supplier’s processes and capabilities over a period of two years.

7. If all of the above goes smoothly, a supplier is certified to begin providing modules to the automaker.

In other words, automakers (especially Japanese automakers) place significant emphasis not only on the design and conformance quality capabilities of prospective suppliers, but also on their ability to commit to sustaining a supply chain relationship.

In this topic, we will learn exactly what it takes to make sure that you have the right partners to implement a successful Lean Six Sigma program, not only within your own company but also across the supply chain. After all, if your suppliers are providing you with high-quality parts, then you can focus your attention on improving your own company’s Lean Six Sigma programs rather than fixing other people’s mistakes!