- Toray Industries Inc., a Japanese textile manufacturer, announced in a statement it's subsidiary Toray Hybrid Cord, Inc. has "inappropriately overwritten data that was provided in inspection reports to customers." The manipulation of the quality data on textiles — materials used to strengthen car tires — had been kept in secret for over a year, the Wall Street Journal reported.
- Toray revealed that its subsidiary rewrote product-quality data in 149 instances so far, with an additional 137 cases still to be investigated. The investigation began in July 2016 and uncovered data manipulation stretching back as far as April 2008.
- The data scandal is the most recent in a wave of disclosed problems in corporate governance, with Nissan Motor Co. recalling over a million vehicles following improper inspections, and Kobe Steel Ltd. confessing that it falsified quality data on aluminum that it uses to build cars and other products.
I grew up in the post World War II years, where “Made in Japan” was not only indicative of poor quality, but also a derisive term to include substandard products and shady business practices. At that time, the Japanese economy was in shambles and their manufacturing capacity devastated, all while the US economy and manufacturing sector were booming. Japan was having quite a hard time.
But there were issues brewing during this U.S. manufacturing expansion, including growing quality issues, the increased presence of inferior products, and a customer service attitude of take it or leave it. While there was some competition from European manufactures, the rise of Asia as a competitor was still unseen. The U.S. was the gloating champion of post-war manufacturing.
Japan, needing to turn manufacturing operations around, reached out to the quality gurus rejected by American manufacturers. Experts including W. Edwards Deming, Joseph Juran and Philip Crosby responded to pleas from the Japanese and lent their expertise to increasing their manufacturing prowess.
And it worked. Quality began to improve and exports expanded. The oil embargo and the recession in the early 1970s paved the way for the influx of fuel-efficient and technology advanced automobiles from Japan, followed by high tech electronics. Now, the term “Made in Japan “ was a badge of honor and American manufacturing was struggling.
Many of the concepts that we use in manufacturing today, including statistical process and quality control, lean manufacturing, just in time inventory management and strong supplier relationships had their roots in Japan. Companies from all over the globe continue to use Japanese manufacturing techniques made famous by the Toyota Production System.
It is sad to continue to see these scandals coming out of Japan. Faked data, economic malfeasance and cover-ups at places including Toray Industries, Takata, Toshiba and Mitsubishi cloud the essential role that Japan has played in improving the concepts of manufacturing worldwide, including within the United States. While it may take Japan a while to recover their integrity, their contribution to global manufacturing progress should not be understated. Their behavior should be a lesson to all about how hard it is to maintain an aura of invincibility without sacrificing ethics.