TOYOTA MOTOR

MANUFACTURING

Ibrahim Jawed Memon - 11284

OPERATIONS AND PRODUCT MANAGEMENT  IBA KARACHI
Synopsis:
The case is focused on how the TMC, started working in Kentucky in 1985. Toyota originating
from Japan, faced a number of issues while setting up the plant in the US. In order to grab
maximum share in the US market, Toyota Motor Manufacturing(TMM) adopted a few different
techniques. TMM produced was producing Camrys for the first few years and their operations
worked with following the Japanese methods. But in 1992 with the increase in the production
from 200,000 cars, to 240,000 and different type of Camrys TMM started feeling multiple issues
specially regarding their seats.

Problem Statement:
Company is facing the problem of rising number of Camry’s defective seats, which in turn
decreases the production level and increase of overtime work and lead time.
Analysis:

Current Scenario:
 Toyota always focused on means meeting diverse customers with flawless quality and at
an affordable price with perfect timing. “Better Cars For More People”
 Toyotas Production System:
1. The System was implemented to reduce the cost of production by eliminating
any waste that would be produced in the production process.
2. Capital in inventory was tied up
3. Space for storage in warehouse was reduced.
4. It took a lot of time to keep track of the inventory
5. Bottlenecks process was concealed.
6. Which led to investment in wrong machines.
7. TPS used two guiding principles:
 Just in Time (JIT)
 Jidoka
 Jidoka was used to aid in detecting immediate problems and provided
visual controls.
 In order for that to work, The production state had to be understood and
well characterized.
8. Kaizen System was implemented. This system had 4 parts,
1- Plan
2- Do
3- Check
4- Act.
 First step was to identify where the problem lied then questions would
be asked to get to the root of why the problems have been occurring
 Then suggestion of solution took place to stop those problems from
recurring.
 To make sure that the best possible result take place, multiple solutions
were tested.
  Finally, the best solution had to be executed.
 Assembly Line:
1. Assembly line used Andon System, whenever there was a problem an Andon
card was pulled.
2. Pulling the card would send a message on the Andon Board, which then can be
reviewed by the supervisor and then he must decide wither to stop the
operation to fix the issue or something else.
 Production Control:
1. Booking of orders were done way before then production started and were
updated regularly
2. This made sure that the only required inventory was kept to keep the holding
cost to minimum.
3. In each shift there was a equal distribution in producing simple and luxury cars,
heijunka practice was followed. Same assembly line was use to produce two
different types of cars which also helped the suppliers.
4. A card which included a part’s batch size, its code numbers, its delivery address,
and other information which was related to the order. This card was called
Kanban cards and triggered production.
5. Employees would only produce when a card was issued to them and only
produce the quantity which was mentioned in the cards and then shipped to the
address mentioned on the card.

Suppliers:
To complete the goals set by the production department, Suppliers were required to be aligned
with company’s goals. But as the demand kept increase for different variations of cars, the
suppliers had a hard tom to adjust to the new demand. Because of this many problem occurred
for Toyota, specially with the seats, Kentucky Framed Seats was the supplier of seats for the
cars.

Before the increase in demand the suppliers and the TMM were aligned strategically but after
the increase in demand the alignment had shifted and there were problems in the seats.

Solution to the Problem:

1. In my opinion JIT system should be a little flexible, this would lift some of the load from
KMS and it will make sure that demand for the seat is met, A certain amount of seats
should be made in advance and in anticipation and be already be placed in the plant.
This will help in reducing the overtime cost of workers, this will happen because quality
checks will decrease, and since the seats will already be present in the plant it would
take less time to fix them.
2. More number of seats should be made, more than the demand as a buffer. Seat is a very
important part of the car and producing a little more seat than the demand wouldn’t
hurt.
 3. Plastic hands should be used to lift products instead of metal hands as they caused
defects in the products.
4. Another solution can be that TMM should find another supplier and should spread the
load between the two suppliers this would decrease the load from both of them and
that way they can focus on the quality of sheets.

Conclusion:

The run rate (Cars produced in on shift of assembly line) decreased to 85% which means that on
average now production of 45 less cars is being done in one shift. And the reason for this was
just that the seats that TMM was getting from KFS were not perfect and lacked quality. KFS was
facing issues in producing the seats, KFS should have done something to mitigate the issue like
for example train their workers. But according to Exhibit 8 the problem was the supplier.

The seats design should be upgraded as there are some flows in it and they are very delicate
unlike the other parts of the car and this delicacy required TMM to give special attention to it.