2013

PPC REPORT TOYOTA PRODUCTION SYSTEM – INDUS MOTORS COMPANY Toyota Production System is based on the concept of SUBMITTED TO: MISS.FALAK SHAD MEMON BY: FARMANULLAH

I.D.#10923

[24/01/2010]

Contents
Executive Summary ........................................................................................ 6 Company Introduction ..................................................................................... 7 COMPANY PROFILE .................................................................................... 7 Vision & Mission .......................................................................................... 8 Management Policy......................................................................................... 9 Manufacturing Facilities ................................................................................... 9 Manufacturing Process .................................................................................... 10 1. Press & Hemming .................................................................................... 10 2. Weld Shop ............................................................................................ 10 3. Paint Shop ............................................................................................ 10 4. Assembly Shop ....................................................................................... 11 5. Vehicle Performance ................................................................................ 11 6. Logistics ............................................................................................... 11 7. Dealerships ........................................................................................... 12 Toyota Production System (TPS) ........................................................................ 12 Key Principles of Toyota Production System .......................................................... 12 Eliminate Waste ......................................................................................... 12 Minimize Inventory (Small Lot Production) ......................................................... 13 Flexible Process Design (Multi-tasking) .............................................................. 13 Pull Concept ............................................................................................. 13 HEIJUNKA (Leveled Production) ...................................................................... 13 Kanban ................................................................................................... 14 Quality (TQM) ........................................................................................... 14 Poka Yokes ............................................................................................ 14 About the Visit ............................................................................................. 15 Trim Line ................................................................................................. 15 Press Shop ............................................................................................... 15 Weld Shop................................................................................................ 16 Chassis Line .............................................................................................. 16 Paint Shop ............................................................................................... 16 Base ....................................................................................................... 16 Plastic Assembly ........................................................................................ 16

Engine Assembly ........................................................................................ 17 Engine Transmission Fitting ........................................................................... 17 Final Assembly Shop .................................................................................... 17 Quality Checking Line (Customer Satisfaction Line) ............................................... 17 Vehicle Performance Line (Quality Audit) .......................................................... 18 Wheel alignment ............................................................................................ 18 References ................................................................................................. 18

Acknowledgement

I highly acknowledge the efforts of my teacher Miss Falak shad who brought home to me the importance of Production Planning and Control. She led us quite well on the visit and taught us the necessary tools to be an efficient operations manager. Moreover, I would like to thank Indus Motor Company who demonstrated us their production systems and also allowed us to visit their plant in order for us to have firsthand knowledge of the techniques applied at their plant

Disclaimer
Respected Madam, I want to bring into your knowledge that the report is made solely by me and in my own words. The only thing which is taken from the company’s website is its introduction and Mission Statement. Except that, all the work is done by me, which is totally based on my understanding of the visit.

Executive Summary
Indus Motor Company is one of the leading car manufacturing firms of Pakistan. The organization promised and provided q u a l i t y , c r e d i b i l i t y performance and safety in their models. The crown jewel of their product lines n a m e d a s “ T O Y O T A C O R O L L A ” , w h i c h h a s a m i g h t y a p p e a l a m o n g t h e m a s s e s o f P a k i s t a n . S i n c e l o n g t i m e T o yo t a C o r o l l a h a s penetrated as a l i f e s t y l e i n t h e s o c i e t y o f P a k i s t a n a n d t h r o u g h t h e i r s p e c i a l o f f e r t h e company has been able to win share of hearts of t h e i r c u s t o m e r s . O n l y through keen management and commitment to customer satisfaction, the c o m p a n y h a s b e e n a b l e t o r u l e t h e h e a r t s f o r a l m o s t t h r e e q u a r t e r s o f a century. Such dedication to value creativity and value delivery can only be done by achieving high levels of operations management. Our semester visit at Toyota made us learn and realize that operations management is one of t h e m o s t i n t e g r a l p a r t s o f a n y o r g a n i z a t i o n , w h e t h e r t h e y o f f e r g o o d o r a service. During the past two decades the company has achieved enormous h e i g h t s t h r o u g h e f f i c i e n t m a r k e t r e s e a r c h , p r o c e s s d e s i g n , i n v e n t o r y management, supply chain management and aggregate planning.

Company Introduction

COMPANY PROFILE

Indus Motor Company Limited (IMC) incorporated in 1989 as a joint venture company between the between the House of Habib (HOH), a local conglomerate and Toyota Motor Corporation (TMC) and Toyota Tsusho Corporation (TTC) of Japan. The company manufactures and markets Toyota and Daihatsu brand automobiles for domestic consumption. The main product offerings include several variants of the flagship “Corolla” in the passenger cars category, “Hilux” in the light commercial vehicles segment and “Fortuner” in Sport Utility Vehicle (SUV) segment. The manufacturing facility and offices are located at a 100 acre site in Port Qasim, Karachi, while the product is delivered to end customers nationwide through a strong network of 37 independent 3S dealerships spread across the country. In its 24 years history since inception, IMC has sold more than 500,000 CBU/CKD vehicles and has demonstrated an impressive growth, in terms of volumetric increase from a modes beginning of 20 vehicles per day production in 1993 to 220 units daily at present through the development of human talent embracing the “Toyota Way” of quality and lean manufacturing. Over the years, IMC has made large scale investments in enhancing its own capacity and in meeting customer requirements for new products. Today, Corolla is the largest selling automotive brand model in Pakistan and it also has the distinction of being #1 in Toyota‟s Asian market.

The company invests heavily in 2,000 plus workforce of team members and management employees and creating a culture of high performing empowered teams working seamlessly across processes in search of quality and continuous improvement (kaizen). The core values of the company encourage employees to pursue high standards of business ethics and safety; communicate candidly by giving bad news first and respect for people. The bi-annual TMC morale surveys show employees giving a high positive score to the IMC work environment and level of job satisfaction. The company has played a major role in the development of the entire value chain of the local auto industry and is proud to have contributed in poverty alleviation at the grass root level by nurturing localization that in turn has directly created thousands of job opportunities and transferred technology to 60 vendors supplying parts. IMC is also a major tax payer and significant contributor towards GOP exchequer.

VISION & MISSION
Vision: “To be the most respected and successful enterprise, delight customers with a wide range of products and solutions in the automobile industry with the best people and best technology.”
     

The most respected. The most successful. Delighting customers. Wide range of products. The best people. The best technology. Mission: Mission of Toyota is to provide safe & sound journey. Toyota is developing various new technologies from the perspective of energy saving and diversifying energy sources. Environment has been first and most important issue in priorities of Toyota and working toward creating a prosperous society and clean world.

Slogan: ACT#1: Actions, Commitment and Teamwork to become No.1.

Management Policy
Integrated Management System Policy We, as a team at Indus Motor Company, are committed to comply with the requirements of our Integrated Management System and to endeavor to continuously improve upon it in order to: Manufacture high Quality Products. Generate Customer Satisfaction. Provide Service to the Society. Maintain Market Leadership. Identify and avoid/mitigate those environmental aspects which have negative environmental impacts. Comply with all applicable legal, regulatory and other requirements related to Environment, Health and Safety, Assist society by making the environment more friendly. Design and maintain facilities, establish systems, provide training and conduct operations in a manner that safeguard people and property. Identify, evaluate & mitigate health risks related to our operations that potentially affect our employees, contractors and the public.

Manufacturing Facilities
The manufacturing facility and offices are located at a 105 acre site at Port Qasim, Karachi. In its 22 year history, IMC has sold nearly 500,000 CBU/CKD vehicles and has demonstrated impressive growth in terms of vehicle production. There has been a volumetric production increase from a modest beginning of 20 vehicles per day in 1995 to 220 units per day at present while not letting go the „Toyota Way‟ of quality and lean manufacturing. The Toyota Production System is built on two main principles: “Just-In-Time” production and “Jidoka.” Underlying this management philosophy and the entire Toyota production process is the concept that “Good Thinking Means Good Product.” Just in Time spirit implies two opposing forces of providing fast and flexible response to customers, yet building mechanisms and systems that are efficient and waste-free. The concept is to provide the right product and information, at the right time, in the right amount, in the right manner, while maintaining high standards of efficiency and cost control. We have to practice this contradictory idea in our daily activities.

Manufacturing Process

1. PRESS & HEMMING
Press Shop is a computer controlled line that converts sheet metal to body panels with high dimensional accuracy and consistency. The birth process of each car starts at the Press Shop. Large body parts are formed here, including sides, roof, doors or floor parts, from which the car body is welded later.

2. WELD SHOP
The production process in the weld shop starts by manufacturing of subgroups – smaller car body units, such as doors, parts of the floor or the roof. The final car body is delivered through a semi automated line working within one tenth of a millimeter precision.

3. PAINT SHOP
It is one of the most modern paint shops in Pakistan which includes ED paint line followed by automated reciprocators to paint the vehicle as per global quality standards.

4. ASSEMBLY SHOP
Bare painted car bodies arrive at the assembly shop, where a process of fitting of various parts and Engine is carried out resulting in a completely assembled car. The final assembly consists of four main production units:
   

TRIM (installation of cabling, the dashboard, heating and the processing unit), CHASSIS (installation of the engine, gearbox and chassis), FINAL (assembly of other parts, such as bumpers, seats, windows, wheels etc). CS (quality checks) and VPI.

5. VEHICLE PERFORMANCE
Inspection & Quality Audit Vehicles are tested for functional performance on drum tester, brake tester, etc.

6. LOGISTICS
Logistics department ships the finished vehicle to dealerships, from where the vehicle is delivered to the customer.

7. DEALERSHIPS
Indus Motor Company is privileged to have the most modern 3S Dealership Network in the country. We have 35 3S (Sales, Service, and Spare Parts) dealerships operating nationwide. Our dealerships are equipped with all necessary modern facilities and are operated by professionally trained Service Technicians.

Toyota Production System (TPS)
Toyota Production System is a repetitive modular process design which uses the formula of assembly design and modules to manufacture different variants of their models. So, in order to manufacture and create value, there must be a standardized set of rules to follow. The four basic components under which TPS was designed include: •Safety •Quality •Cost •Productivity As stated earlier, TPS’s main target is to produce more with less, which m e a n s remo ving all those steps that don’t add any value to the final product. Moreover, focus on Kanban/Just in Time (JIT), continuous improvement, less inventory, pull concept, multi-tasking, employee empowerment and doing things right the first time. The main goals of TPS are to manufacture highest quality automobiles, with the lowest possible cost and shortest possible lead time. TPS is based on working out a process as a team that promotes a culture of earning and giving respect. During the visit we saw various sign boards focusing on the importance of team work. The one board which we saw on entrance says: “Together We Achieve More” The ten basic components of Lean Manufacturing through which TPS is designed areas follows:1 . O p t i m i z e t h r o u g h p u t 2 . M i n i m i z e i n v e n t o r y 3.Eliminate waste (MUDA/MURI/MURA)4.Flexible process design (Multi -tasking)5 . P u l l c o n c e p t ( J I T ) 6.Quality (JIDOKA/KAIZEN/ANDONS)7.Doing it right the first time (KANBAN)8.Partner with collaborators/suppliers 9 . E m p l o ye e e m p o w e r m e n t 10.Foster the culture of continuous improvement

Key Principles of Toyota Production System

ELIMINATE WASTE
Wastes are all those processes that take up production time while adding no value to the final product. TPS focuses on eliminating such situations or processes th at are regarded as a

loop hole in the production system and does no good to the firm’s operations. TPS classifies such items into three broad categories.1 . M U D A 2 . M U R I 3 . M U R A MUDA can be originated through various bottle necks and loop holes in the system which mainly includes, over production, transportation, non-optimum inventory, waiting, motion, or re-work/scrap. Any unaddressed MUDA will nurture many otherMUDAs/MURIs/MURAs. These are inefficiencies in any process design and contribute in increasing costs of manufacturing. According to a key takeaway from our course, inventory undergoes operations for only 5% of the time and the rest 95% of the time inventory is either sitting idle or its in transit or motion.

MINIMIZE INVENTORY (SMALL LOT PRODUCTION)
Due to the company’s focus on reducing all the waste elements, the s ys t e m minimizes inventory and lowers the cost. The main idea is to produce in small lots that reduce wastage. Because large lots often bring with them element of risk by associating higher capital input, holding costs, extended lead times and increased chance of error. In contrast, small lots minimize inventory, lower costs, improve controls, less stocking, and assist in achieving economies of scale.

FLEXIBLE PROCESS DESIGN (MULTI-TASKING)
Small lot-size, efficient workforce, coherent process and assembly designs aids inflexible setups. These include quick change over of internal and external designs with respect to demand forecast and customer requirements. The concept is an integral part of Lean Manufacturing and fosters the culture of training workforce that supports multi-tasking

PULL CONCEPT
Since the company aligns its production targets on the basis of Pull concept from the customers, this enables them to produce under the umbrella of JIT. JIT means to p r o d u c e what is required, when it is required and how much required. J IT is i n efficient tool of minimizing overall process costs, but it requires good relations with all the collaborators and vendors. JIT benefits by minimizing in work in prog ress inventory, worker motivation, lower costs and less warehousing.

HEIJUNKA (LEVELED PRODUCTION)
TPS focuses on leveled production which means they decide one to two months prior what to make, and how much to make? This enables them to continue with the smooth flow of production with a leveled workforce, capacity and machines. In contrast chase strategy focuses on the quantity of units produce on the basis of demand forecast

which surely increases cost of holding, cost of hiring/laying off workers etc. The key benefit of leveled production is efficient aggregate planning, worker motivation and employee empowerment. HEIJUNKA-mean balanced and sequenced production, since they make around six variants so exact quantity and quality is of prime importance. HEIJUNKA aids in f l e x i b l e a n d b a l a n c e d p r o d u c t i o n l i n e w h i c h r e d u c e s t h e v u l n e r a b i l i t y o f o v e r burdened employees which eventually sets the tone for employee empowerment and improves morale and motivation.

KANBAN
Kanban means “Sign Board” in Japanese. It is a card that shows standard quantity o f p r o d u c t i o n . I t i s d e r i v e d f r o m t w o - b i n i n v e n t o r y s ys t e m a n d m a i n t a i n s t h e discipline of pull production. It authorizes production and movement of goods.

QUALITY (TQM)
Quality is very important for any firm to be successful. At IMC it includes visual controls, like checkpoints. Every worker in an assembly assumes the next worker as customer. This creates the culture of inspection at source. TPS is aided thr ough Poka Yokes-which means fool proof system or part design, poka -yokes help in

About the Visit
Indus Motor Company is located in Port Qasim, which is in the outskirts of Karachi. T h e l o c a t i o n i s o f p r i m e i m p o r t a n c e f o r T o yo t a , b e c a u s e a p l a n t n e a r t h e p o r t definitely improves the supply chain channel. IMC has a state of the art plant for manufacturing which is strictly secured and maintained. Being an ISO certified firm t h e y mainly focus on the quality of environment, safety and p r e c a u t i o n a r y measures for their employees and visitors. Proper instructions were given to us with respect to safety and confidentiality of the visit. We were then divided into two groups; each group was escorted by an experience management representative. The trip was basically focused on four key areas:1.Precautionary Measures and the Process2.Floor Management Development System3.KANBAN and Material Management System4 . T o yo t a P r o d u c t i o n S ys t e m ( T P S ) Just as we entered the production plant (assembly line), we were given instruction t h a t w e s h o u l d w a l k o n t h e g r e e n b e l t e d m a r k o n t h e f l o o r w h i c h w a s t h e designated corridor to walk on. This definitely signals that how much they care about MUDA’s because delays in material movement certainly increases lead time and process costs. I also witnessed that there were numerous sign boards that showed their culture of c o n t i n u o u s improvement and employee empowerment. There were boards (KANBAN) which emphasized on the concept of QUALITY COMES FIRST, they are key b u l l e t p o i n t s t h a t t h e e m p l o ye e s h o u l d a l w a ys l o o k u p o n s o t h a t h e i s a l w a ys focused on his task and do things right the first time. The concept of PDCA, which was proposed by Edward Deming, was also shown all acro ss the assembly line. Toyota basically sums up its values by focusing on the following key points: •Challenge •Kaizen •Genchi Genbutsu •Respect •Team WorkWe were also shown different parts of the plant which represented their qualitypolicy, environmental policy and different safety and precautionary measures. T P S emphasized on the concept of JOB SHOP in an assembly line. N o w , I w i l l elaborate the process flow which was being conducted at T P S t o m a n u f a c t u r e premium quality automobiles for their customers.

TRIM LINE
Trim line basically includes press shops and weld shops. Both focused on creating different body parts.

PRESS SHOP
Here the metal sheets were being pressed and molded to form different shapes for different body parts of the car.

WELD SHOP
In weld shop parts were joined through welding, and they were molded together to form a car structure. It was basically divided into two parts: 1.Workers was taking parts like vehicle doors for welding2.Weld different parts to form the car structure, which includes:     F l o o r Luggage Compartment R o o f Engine Compartment

CHASSIS LINE
In this area of the production line, different welded parts were perfectly joined withbody pillars and the body base. As the whole manufacturing is done on the chassisof the car, so it makes this process of prime importance, because an unaddressedfault in chassis will definitely hinders other processes. So quality check is done hereto make sure everything is in correct form.

PAINT SHOP
Afterwards the whole body was being painted. We weren’t allowed to visit the paintshop due to its sensitive nature. Proper protective clothes were required to enter the paint shop. A typical paint process followed the following steps:

BASE
    Primer Color Liquor Dryer

PLASTIC ASSEMBLY

This includes the assembly and plastic parts of a car like bumpers, mud guards, mud shields, steering, dash-boards, interiors, and tires.

ENGINE ASSEMBLY
In the engine assembly shop we were shown that how the engines were checked foroptimal performance. We were told the engine parts are usually imported and thena s s e m b l e d h e r e a t I M C . T h e r e w e r e d i f f e r e n t v a r i a n t s o f e n g i n e w h i c h w e r e classified like Coure Engine, Toyota 1300cc and 1800cc petrol engines, and 2000ccdiesel engines for 2.OD. Engine Assembly line was further divided into two rooms:Room 1 – Engine assemebly for different variantsRoom 2 – Quality Check for engines, for e.g. leakages, bubbling, abrasivenessDynamo Room – This includes: •Thorough checking of engines •Fuel consumption •Oil consumption •Engine timing and power checks.

ENGINE TRANSMISSION FITTING
Then the final painted body was equipped with the engine and transmission, the workers here were very efficient and were able to identify defects at the source, this is the main concept behind JIDOKA.

FINAL ASSEMBLY SHOP
This includes the final assembly of all the parts to complete a car; it comprises of the assembling of main parts of the body from the section of engine transmission fitting area with various accessories like wiring, air-conditioner etc.  W i r i n g  Car Air Conditioner  P i p i n g  P a n e l s  G l a s s e s  S h o c k s  Electronics  Roof Pads, Bumber Pads

QUALITY CHECKING LINE (CUSTOMER SATISFACTION LINE)
Here quality assurance is done, because cars are classified as consumer durables t h a t a r e very costly to purchase. Since cars brings about with them luxury and

speed so good quality measures are of prime importance because the life of the customers and users are at stake. Key areas include: •Every step is checked according to the standards •Inspection of engine assembly is done •Engine, bolts with standard torque •Tires are fixed •Fuels & fluids •Air conditioner gas is filled •Carpet •Wind shield • Vin plate

VEHICLE PERFORMANCE LINE (QUALITY AUDIT)
WHEEL ALIGNMENT      Brakes check Speed check 120 km/h (drum testing) Shower testing Wave testing(noise checking) CNG fitting

References

•http://www.hci.com.au/hcisite2/toolkit/images/pdca02.gif
•http://www.strategosinc.com/lean_manufacturing_history.htm •http://www.toyota-indus.com/ •http://www.leanproductionforum.co.uk/dissertation/definition_files/image002. gif •Operation Management (8thEdition) by Jay Heizer and Barry Render