2. Maintenance and Reliability

Japanese manufacturing prowess has taken a hit recently due to the Kobe Steel scandal and news of improper final domestic inspection procedures at Nissan Motor. The Kobe Steel plant at the center of a data-falsification scandal that has shaken supply chains around the world has been stripped of all its industrial quality certifications. Kobe Steel has an extensive role in global supply chains. It produces engine valve springs found in half the world's cars. Kobe shares have plunged nearly a quarter since news of the data tampering in early October 2017.

The government-sanctioned seal on insulated copper tubing from Kobe's Hatano plant, one of its main copper product plants, was revoked after an investigation by a certifications rm into its quality controls. The plant southwest of Tokyo has also lost its ISO 9001 quality certifications from the International Standards Organization (ISO), Japan Quality Assurance Organization said.

Earlier, the plant was stripped of its Japan Industrial Standards (JIS) seal for seamless copper pipe products used for air conditioning and refrigerators, as part of the fallout of one of Japan's biggest industrial scandals. Having the quality seals revoked means the company can no longer sell the products with the JIS label, potentially restricting the number of customers that want to buy them and reducing its sales.

JIS-certifications products account for about 40 percent of Hatano's sales by weight. Copper products made up about 7 percent of the company's total sales in the year to March 2017. Some customers have agreed to keep buying products made at Kobe's Hatano plant without the JIS label after it was rst stripped of its JIS certifications, a Kobe Steel spokesman said. But the plant may be forced to stop shipping some products if the ISO 9001 certifications was among the conditions set out in contracts with customers. Customers may switch suppliers or pick Kobe's competitors for future orders although the short-term impact may be reduced by the limited availability of substitute products.

Three other Kobe Steel copper and aluminum plants involved in the data cheating had their ISO 9001 quality certifications suspended earlier this month for up to six months. Japan's third-largest steelmaker, which supplies producers of cars, planes, trains and other products across the world, said last month that about 500 of its customers had received products with falsified specifications. Concomittantly, Nissan said earlier that the ISO 9001 certification of its plants and those of aliate Nissan Shatai had been revoked for production of Japan-bound vehicles. Nissan Motor Co.'s factories in Japan have lost their international quality management certication for domestic production after the carmaker was found to have continued using uncertified workers to conduct final checks on its vehicles even after the problem first surfaced in September 2017, according to certification agencies.

ISO 9001 certificates on quality management systems for Nissan's six domestic assembly plants were revoked as of October 31 following on-site inspections, raising fears that the credibility of Nissan vehicles could suffer. However, the factories, which are located in Tochigi, Kanagawa, Kyoto and Fukuoka prefectures, maintain ISO certification for production for overseas markets. The certificates issued by the Switzerland-based International Organization for Standardization are an assurance of quality control to a certain level.

The improper car checks at Nissan first came to light on September 18 following an inspection by the transport ministry, prompting the automaker to admit on September 29 that uncertified workers had been conducting final car checks in violation of government regulations. Nissan suspended car shipments and production at all six domestic assembly plants on October 19 after nding that uncertified workers continued to perform the checks even after the violation was revealed, prompting the company to issue a massive recall of domestic vehicles. Since the malpractice surfaced, Nissan has recalled for re-inspection around 1.2 million vehicles it sold in Japan. Operations and shipments at all six domestic plants have resumed as of November 8, 2017 after the automaker said it has implemented preventive measures. What causes Kobe Steel (Kobelco) and Nissan lost their ISO certification?

Japanese players are always known for their lean manufacturing and quality control. This news, however, showed that they are totally coming down from one scandal to the other { and facing a downward spiral that is quite strange for a culture that stood as the epitome of hard work and quality. What is really happening to the Japanese?

For Kobe Steel (Kobelco) or Nissan, it is relatively easy to pinpoint the responsibility for maintenance and reliability, but what about projects that are not owned by a single party or distributed across different countries?

In those cases, how should we assign the responsibility of maintenance and reliability? Is there anything that Kobe Steel (Kobelco) and Nissan can do to improve their maintenance and reliability of their production systems in the future? Explain.