When Hiroyuki Shiratori, a tall, soft-spoken Japanese engineer, was named project manager in charge of the redesign of Nissan's Maxima sedan for 1989, he was granted the kind of power that his counterparts in America can only dream about.
Shiratori could tell his bosses to leave him alone.
Under Nissan President Yutaka Kume, Japan's second-largest auto company has developed an innovative policy prohibiting top Nissan executives from influencing product design once they have given their initial approval to a project. The policy even extends to Kume himself, who may not tell his engineers what he thinks about new car designs.
"When Mr. Kume became president, he made it so that he stayed out of design, and he ordered all other managers to do the same," Shiratori said. "The president is not always familiar with the product, so he doesn't make decisions about it."
So Shiratori, who took over the Maxima project in 1986 here at Nissan's sprawling technical center outside Tokyo, had the final say over all aspects of the car's development and did not face the costly delays that come with making last-minute changes to placate higher-ups.
"With this system, we can improve our quality, because we don't have to make changes all the time," Shiratori added. "And since I have the final authority, I can't have any excuses."
The freedom given Shiratori would amount to outright heresy in Detroit: At Chrysler, for instance, almost every new car bears the heavy imprint of Chairman Lee A. Iacocca, who is said to have a personal preference for boxy shapes and vinyl tops that is reflected in Chrysler's often-criticized car lineup. At General Motors, Chairman Roger B. Smith often swoops in by helicopter on GM's design center in suburban Detroit demanding to see every project that GM's stylists have under way.
Nissan's hands-off policy has paid big dividends. Not only did Shiratori and his team develop a strikingly handsome new car within 30 months--much faster than anything from Detroit--but the 1989 Maxima also went on to win the auto industry's most coveted quality award almost as soon as it was introduced.
Surveys by J. D. Power & Associates, an Agoura Hills research firm considered by both Japanese and American auto makers to be the last word on quality, showed that customers ranked the new Maxima as the most trouble-free car in America in 1989.
Ironically, by not meddling, Shiratori's bosses got him to do exactly what they wanted--he met a corporate objective set years earlier that called for getting a car into first place on J. D. Power's list.
The remarkable success of the Maxima program shows just how important the Japanese product development system--the process of turning an idea into a new car--has been in helping the Japanese auto makers retain their competitive edge over the American industry throughout the 1980s. While the U.S. auto makers have made dramatic strides in improving the quality and attractiveness of their cars over the past decade, they have never quite been able to catch up.
Short Lead Times
A key reason is that the Japanese move so fast--and so decisively. In the jargon of the industry, they have shorter product development "lead times"; they can conceive, develop and build hot new cars such as the Maxima much more quickly than can Detroit, while still meeting ever-rising quality standards.
In Japan today, virtually every auto company can develop a new car within 30 months or, when they have to, even more quickly. Nissan's retro-look mini-car, the Be-1, which has been a smash in its limited exposure on the Japanese home market, was produced in just 16 months.
By contrast, most American cars have a five-year gestation period, and sometimes even longer. General Motors has been working on its Saturn "import fighting" project since at least 1983, but the first Saturn, a sporty compact car, won't go on sale until next summer. Ford's Taurus, introduced in 1985, won't undergo a complete redesign until 1994 or 1995.
To be sure, the domestics know that they must move more quickly and are working feverishly to reduce their product lead times. Ford's 1990 Lincoln Town Car was developed in just 41 months, the fastest new-car program in the company's modern history. GM's goal for the 1990s is to be able to develop cars in three years, and one of the first new products to meet that timetable, a redesigned Buick Park Avenue, will be introduced in the 1991 model year.
"We recognize that we have to get cars out faster," said Mark Farmer, a product engineer at GM's Flint Automotive division, which is working on the new Park Avenue. "When it takes five years, the car is two years old by the time it comes out."
Yet Japanese lead times are already even faster than GM's three-year objective--and have been throughout the 1980s. Indeed, their lightning speed has helped enale the Japanese to inundate the American market with an unprecedented number of new products, from the hot Mazda Miata to Toyota's new Lexus, once again leaving the domestic competition far behind, both in terms of technology and in overall appeal.
How do they do it?
Giving engineers such as Shiratori free rein--making him the automotive equivalent of a Hollywood producer--is part of the answer. A project manager in charge of a new car in Japan is not only left alone but is kept in place throughout the life of the project to oversee the car from cradle to grave--from styling to manufacturing and all the way to sales and marketing.
By contrast, comparable project managers in Detroit have far less authority, are usually only in charge of the initial engineering work and frequently do not even stay in their jobs long enough to see the car through to its introduction.
For instance, GM's ambitious "GM-10" project--a multibillion-dollar effort to jointly produce the Chevrolet Lumina, Oldsmobile Cutlass Supreme, Pontiac Grand Prix and Buick Regal--went through three program managers and two chief engineers before the cars ever hit the streets. Automotive analyst Maryann Keller, argues in her new book on GM, "Rude Awakening," that disorganization and a lack of consistent leadership in the early stages of the GM-10 development program were largely responsible for the poor sales of the cars when they were introduced in 1987.
The Japanese system, unlike the American, gives the buck someplace to stop. Projects are not delayed by bureaucratic wrangling and second-guessing.
"We have made the assignment of authority clear under the project manager," Shiratori noted.
But perhaps more important, the Japanese also focus much more of their attention than do their American counterparts on the initial stages of the design and development process, making decisions early and then sticking to them.
"The basic purpose of quality control at Toyota is to make the right start so there won't be any inconveniences afterwards," observed Katsuyoshi Yamada, general manager of quality control at Toyota.
In fact, most Japanese companies spend about 10 months planning a program before the project even officially begins. That planning work gets under way long before the designers start to sculpt a clay model of a proposed new car--usually considered the first major step in the design process.
But that extra planning pays off later. With so many decisions already made, the Japanese can then move quickly from the clay model stage to a running prototype of a new car in another 10 months, much faster than Detroit can, noted Nissan engineering manager Shuji Yamagata.
Meanwhile, they bring their suppliers, factory managers and even their assembly-line workers in to brainstorm over that early work to anticipate problems and fix them long before they show up on the factory floor.
"For the people in the plant to build a good product, it is key for them to understand the intentions of the designers and engineers," noted Masayoshi Horike, a Nissan engineer who acts as a liaison person between the company's engineering staff and its factories. "In order to achieve that, it's important to involve the plant in the early stages of the development and also to explain the concept of the car to the people in the plant."
By thus seeking to "design in" quality early on, the Japanese can move faster and more smoothly, avoiding the mistakes that often delay American projects later in the process.
"We can reduce development time because we discuss everything as a team early on," Shiratori said.
On the Maxima, for example, Shiratori's development team included groups of supervisors and line workers from Nissan's Oppama assembly plant, near Yokohama, where the Maxima was to be produced. When the first clay models of the proposed car were sculpted by designers, workers from Oppama were asked to grade each aspect of the car, from A through D, on how easy it would be to assemble. Any part that received a low grade from the workers was changed, using Nissan's advanced computer-aided design system.
Parts suppliers also give the major auto makers in Japan a big head start on their development work. Nissan and other major auto companies usually demand that their key suppliers, some of which are virtual subsidiaries of the auto makers, begin research work on crucial components long before the development of a new car has begun.
Frequently, suppliers start work on projects for the auto makers even before they are assured of winning a contract. The suppliers are willing to take such risks because they have long-term relationships with the auto companies and know that, even if they don't get the job this time, they will win other contracts down the road.
For the new 1990 Honda Accord, for example, Yamashita Rubber Co., a key Honda supplier, began independent work on an advanced engine mount three years before Honda began its redesign of the car. When Yamashita started its work, Honda was not even sure it wanted Yamashita's version of the engine mount.
Yet by the time Honda was ready to start work on the new Accord, the engine mount was finished and Honda engineers simply plugged it into their engine system.
Such cooperation--extremely rare in the United States--dramatically reduces the development time in key areas for the major Japanese companies. Honda can typically have cars rolling off its assembly lines just 24 months after its engineers have turned out their first, hand-built, running prototypes of the new model; that's at least a year faster than the best of Detroit.
"To do that, we need to start work on critical parts 24 to 36 months before the start of car development," says Shoichiro Irimajiri, Honda's senior managing director in charge of worldwide manufacturing operations. "So that requires a strong commitment to development by our suppliers."
That work by suppliers also reduces the costs of research and development for the major auto makers, making it possible for Honda, Nissan and the others to spread their money around on a broader range of new products.
Ironically, as in so many other aspects of Japanese business, engineers here credit a familiar source for teaching them the fundamentals of this product development system that now makes the Japanese such formidable competitors.
"We learned the product development process from the United States 30 years ago," Nissan's Yamagata observed.
"But we have been improving on it ever since."