I have been in the auto business more than 40 years with General Motors, Toyota, Ford, AlliedSignal and then back to GM/Delphi and now helping companies implement lean manufacturing and Six Sigma.
The traditional automakers still don't truly understand that customers don't want to go back to dealers for repair, even if the vehicle is under warranty.
Some manufacturers understand that - Toyota and others.
Low warranty costs are another benefit of doing it right the first time. If you have a $200-$500-per-car warranty advantage on several million cars, you have a dramatic cost advantage. The principle is lowest total cost.
That is difficult to achieve in most companies because people have narrow objectives to meet, such as lowest price on a parts contract.
A slightly higher price on a component could reduce warranty cost and yield the lowest total cost. As a stockholder, that is what I want.
Fujio Cho told me several times that Toyota is as strong as the weakest supplier.
Cutting prices without the ability or knowledge of cutting costs makes a supplier weak.
Toyota gets low prices but also high quality.
Another principle is that the highest quality system gets the lowest cost.
The problem with many of the lean production and Six Sigma efforts to improve quality and reduce cost is that too many become administrative initiatives rather than a way of life.
The production system should become the culture - lowest total cost with highest quality to give maximum value.