Mitsubishi Quality Problems

In November of last year, Mitsubishi Materials Corp. was hit with one of the largest quality scandals in Japan’s manufacturing industry.  The scandal started when Mitsubishi admitted that workers had been doctoring quality data to make it appear like the low-quality products were hitting customer standards when they were not.  Mitsubishi is made up of a number of subsidiaries that produce cement, copper, and electronic materials such as airplane and car parts.   Many of Mitsubishi’s subsidiaries were part of the quality scandal.  False data reports include reports made by Mitsubishi Cable Industries on rubber sealants used in automobiles and reports made by Mitsubishi Motors on fuel efficiency tests.  These products are shipped to over 200 customers, which means the scandal will have far reaching affects.

This case shows the importance of good quality management.  First, in actually ensuring products are made well and are made to customer standards.  A company is nothing if it does not live up to its quality promise.  Still, sometimes even the best run companies make mistakes and the quality isn’t everything that it should be.  If that failure happens, then quality management can be used to identify the problem and fix it.  Mitsubishi clearly did not have a quality management program in place.  When Japan’s Economy Minister asked Mitsubishi why it took so long for them to report the quality problems, Mitsubishi responded that while they were aware the products were not meeting standards, they did not know exactly how off the mark they were.  Basically, they did not know where in the process they were going wrong, so they had no idea how bad the problem really was or how to fix the problem.  Mitsubishi was hesitant to tell customers that there was a quality issue when they didn’t have any further details. They thought telling the customers only half the information would have been confusing instead of helpful, so instead they said nothing at all.  Obviously, once the fake quality data was revealed to be false, customers were angry that they were sold low quality products and that Mitsubishi lied to them.  This is especially dangerous because Mitsubishi sells parts that are used in heavy machinery such as airplanes and cars.  Mitsubishi is still claiming that none of its quality mistakes are safety hazards, but since the quality reports were lies it is hard to know when to trust the company.  It is especially worrying that the same mistake was made in multiple of the subsidiaries, suggesting this is a widespread problem for the parent company that needs to be addressed.  As a result of the scandal, Mitsubishi is suffering in the public eye.  Their shares fell 8% after the scandal broke and many orders were cancelled.

In order to regain customers’ trust and a good reputation, Mitsubishi will need to think of ways to improve their quality management.  In class we talked about how Japan has faced quality issues in the past but was able to come back from those problems with the use of kaizen, or continuous improvement.  Where do you think Mitsubishi went wrong and do you think Mitsubishi can still fix its own problems using one of the methods we talked about in class?

 

Articles:

https://www.wsj.com/articles/quality-scandal-deals-blow-to-mitsubishi-materials-stock-1511495585

http://money.cnn.com/2017/11/23/news/companies/mitsubishi-materials-false-data-kobe-steel/index.html

11 thoughts on “Mitsubishi Quality Problems

  • February 13, 2018 at 8:45 pm
    Permalink

    I agree that Mitsubishi had a major lapse in maintaining the company’s high quality management levels. First, the company needs to realize and accept that quality is defined by the consumer and what their expectations of the product’s performance are. Having a clear perception of what the consumer’s standards of quality are will drive their improvement of total quality management. It is apparent that Mitsubishi was completely unaware that there were any issues with their products. Mitsubishi could have taken significant prevent costs to take control of this situation before it got out of hand.

    Because they did not do this, I think Mitsubishi should start by clearly defining what their consumer’s expectations of quality are. When the expectations are clear for the company will be able to establish much better corporate objectives. These clearer objectives will allow the company to implement new changes in order to reach their goals.

    In addition, the company also did not exhibit total quality management, as their customers were not satisfied with Mitsubishi’s performance. In total quality management, the company could have increased their employee involvement. On the company website, there is not much information about how much their employees are involved in their operations. The company seems to only stress lateral communication between employees and there is a major gap between employees and management. When the employees are better involved, processes will run in a much smoother manner. If issues arise, the employees will be able to feel more comfortable in speaking up.

    https://www.mitsubishicorp.com/jp/en/about/resource/environment.html

  • February 14, 2018 at 4:12 pm
    Permalink

    I was hoping someone would discuss what is going on in Japan right now. Like the second article you linked says, there have been a number of different firms from Japan that have been facing scandals related to quality issues like Kobe Steel, a company that sold low quality products to a number of large businesses including Toyota, Boeing and even Mitsubishi. Subaru and Nissan both admitted to letting uncertified workers inspect their vehicles. With these and a number of other scandals that have broken out I think the question of how to control quality may extend beyond just Mitsubishi and into the entire Japanese marketplace. It seems that there has been a growing sense of complacency in Japan when it comes to quality control. An article linked to the second article Jordan posted called “What’s Wrong with Japan Inc.” suggests this may have to do with management having what some researchers have dubbed a “quiet life” preference. They avoid making tough decisions to make their lives easier. If this is the case then I think the first thing Mitsubishi as well as other Japanese companies need to address to fix quality is the management. In businesses leadership goals are contagious. If important figures in the company encourage goals centered on constant improvement, then that will trickle down throughout the rest of the business. Of course this is not the only problem. Like Lauren discussed, there are plenty of ways that operations can improve communication and set clearer objectives in order to improve quality management. But I certainly believe addressing issues with management should be a priority for Japanese companies facing these quality issues.

    http://money.cnn.com/2017/10/24/news/economy/japan-inc-scandals-kobe-steel/

    • February 14, 2018 at 11:45 pm
      Permalink

      I agree with Brandon. I think we need to look at some of the reasons why most companies in Japan are compromising on their quality. Other than the management’s mindset, another reason why Japanese companies could be compromising on their quality could be due to the intense competition that they face. Most of the Japanese companies face severe competition from countries like China and India where the production costs are significantly lower. It could be argued that Japanese companies are compromising on their quality to keep up with this intense competition of ensuring low costs for customers. Another reason that comes to my mind is the culture of working long-hours in Japan. I have often come across videos of Japanese workers burning themselves out by working late hours, staying in the office for days, and often found sleeping on the sidewalks. If that is true for most employees in companies like Mitsubishi, then workers are not able to work at their optimal capacity because they are too drained from the long working hours which could be one of the reasons why quality is being compromised on such a wide scale.

      • February 15, 2018 at 1:57 am
        Permalink

        You bring up an interesting point. Competition definitely forces different firms to alter their production strategy and minimize their costs. More significantly, companies like H&M use unsavory practices to achieve the competitive price. In doing so, these unethical companies revert to inappropriate measures such as child labor and unsafe working conditions.

        Last semester, I studying abroad in France and perceived a direct outcome of this foul play. We performed an in-depth study where we investigated H&M and determined first that their business in Europe was due to serious competition in Asian countries. Nevertheless, to participate in this competitive retail battle H&M utilized illegal, foreign, and unethical labor to create cheaper products. This kept constant quality but brings up the question whether or not solid quality should be generated from poor practices. Moreover, I think it is more necessary to employ proper ethical practices than striving for best personal product quality.

  • February 14, 2018 at 4:41 pm
    Permalink

    While the news of this is shocking, I feel as though it is pretty believable. Mitsubishi runs their company off selling low cost products, so I am not very shocked to hear that they cut corners. When they claimed they didn’t know where the problem was coming from demonstrates the dangers of not following up the results of quality testing. Since they knew there was a problem it is easy to see that they did in fact test the quality of their products, however they didn’t follow through and split the problems into, for example, assignable versus common causes. Additionally, it is clear that Mitsubishi did not undergo process capability to determine if their overall process was sufficient in providing safe products. It is possible that Mitsubishi tried to lower manufacturing costs through cutting out proper quality testing. If this is the case, Mitsubishi took a huge gamble and or completely ignored all the costs of producing poor quality products. By skipping out on prevention costs and appraisal costs, they now have to pay internal failure costs and worst of all external failure costs. Aside from the direct costs they will have to pay, it is important to highlight the damage done to Mitsubishi’s consumer relationship. Because this scandal was so mismanaged, customers have no faith in the company. Furthermore, seeing that Mitsubishi also supplies products for plane manufacturing, the spill over from this mistake is far fetching and extremely dangerous. This case is a perfect example of the importance of going through all the quality testing processes and the consequences if you don’t.

  • February 14, 2018 at 6:19 pm
    Permalink

    I think a plan with the mission of transparency is the best way for Mitsubishi to regain consumer trust. We talked about the pros and cons of customer involvement in the chapter about defining process strategy. In this case, showing its customers the right amount of information to gain trust without revealing things that distance Mitsubishi from the competition is tricky. I agree that kaizen is a huge factor here, and without it Mitsubishi cannot come back from this mistake.

  • February 14, 2018 at 8:39 pm
    Permalink

    I agree with your first point that the first step to solving this problem would be to ensure quality from the beginning. Obviously, there will always be mistakes and manufacturers will produce some defects. As we discussed, their are many costs that come with producing defects or low quality products. These expenses can become very costly, especially if the faulty process that is causing the defect is having a widespread effect. It seems in a lot of these scandal cases, it is a few managers making poor decisions that affect the entire company. It could have been that due to these costs of poor quality, some managers decided it would be more economical to hide the defects instead of fixing the issue. Also, we have discussed different entities that enforce quality standards in order to protect the consumer. This scenario shows how reliant we are on accurate data reporting from companies. I think that Mitsubishi could fix some of their issues by increasing customer involvement and employing Kaizen. Mitsubishi should involve the customers in their operations more by becoming more transparent about their operations. In this transparency, the customers see that Mitsubishi is constantly making efforts to improve their processes. As a side note, I was able to find many articles that discussed how many large companies, namely the automobile and aviation industry, are stopping production in Japan due to this issue. It will be interesting to see how this halted production will affect Japan’s economy as a whole.

  • February 14, 2018 at 11:18 pm
    Permalink

    In 2015, Honda faced scrutiny for quality issues with numerous recalls. In the vehicle industry especially, quality issues can be a large danger. The death feared by drivers around the world occurred in the Honda vehicle in 2015 when a pregnant woman crashed into another vehicle, the airbag employed abnormally, the inflator case broke, and the woman and her unborn child both passed away.

    I include this article to show how important quality management is. This external failure cost hit Honda hard as I am sure it is hitting Mitsubishi, as well. Quite similar to what Jordan mentioned, Honda lacked the employee involvement it needed in order to prevent this issue, and possibly save the two lives. The article says that two former employees conducted tests on the airbags in 2004 and found signs of defects but did not report the results to federal regulators. The external customers, meaning the customers, depended on the internal customers, the employees, to expose the quality at the source. Honda is still struggling to regain its customer satisfaction and trust. It is evident how important quality is for customers; transparency and honesty could have easily avoided all of these unfortunate events.

    Article Link: https://www.nytimes.com/2014/11/14/business/international/honda-issues-fresh-recall-after-death-in-malaysia-is-linked-to-airbag.html

  • February 14, 2018 at 11:38 pm
    Permalink

    It is very interesting that this trend of quality errors and recalls has been affecting many firms in Japan. Japan has recently been known for very consistent quality, however there has been a string of recalls that have been caused by quality errors. Toyota has also recently struggled with quality issues regarding suppliers in the Takata airbag recall. Recalls for car manufacturers are extremely costly and can severely impact the stock price of the company. Similar to the case with Mitsubishi Toyota had a supplier that did not maintain quality standards and lacked the quality management practices needed to catch the mistake.

    http://corporatenews.pressroom.toyota.com/releases/toyota+expands+takata+air+bag+safety+recall.htm

  • February 15, 2018 at 7:52 am
    Permalink

    I like this example with Mitsubishi because it is a solid combination of quality management and the Customer-Contact Matrix. Here Mitsubishi is lying to the consumer about the quality of their products so that they can have lower costs and make a higher profit. Since they are trying to standardize this process as much as they can to create these cost savings, and there is such little trust between consumer and manufacturer, this is about as back office as Mitsubishi can get. The customer interaction is based on a lie, and Mitsubishi keeps them in the dark about their true quality to earn a better profit. It’s completely unethical, and they need to figure out a way to solve it on the mass scale.

    They can improve these processes and regain trust with their consumers with process improvement. Mitsubishi should consider statistical process control and dig in deep to see where the product’s low quality does not deliver to the consumer. Sure, there will be certain common causes that give variability to their quality for random reasons, but they can define and solve the problem if they can discover the attributable causes and develop a plan to fix it.

  • February 15, 2018 at 8:15 am
    Permalink

    This example of Mitsubishi is not surprising at all, given the recent abundance of news describing how automotive and industrial manufacturers are using illicit shortcuts to alter product quality information with aims of reducing costs. As others have pointed out, Mitsubishi is not the first company to be found guilty of this. According to a New York Times article, Kobe Steel blamed “overzealous cost-cutting, lax oversight by executives, and an insular corporate culture that discouraged employees from questioning improper but long-established practices,” when they were faced with similar allegations. In October of 2017, two other automotive manufacturers; Subaru and Nissan, admitted to cutting corners by allowing employees who lacked certification inspect vehicles. This trend coming from primarily Japanese manufacturers raises a question of corporate culture and accountability within these firms. Furthermore, it brings the executives’ priorities into question. Is the customer the priority? Or is profit? Without customers, there is no profit to be had.

    https://www.nytimes.com/2017/11/24/business/mitsubishi-materials-japan-quality.html

Comments are closed.

css.php