Operations Management-II

Toyota Motor Manufacturing USA,

Inc

Group 12

Aman Rastogi 2020PGP029

Anshika Uppal 2020PGP048
Aishwarya Dhole 2020PGP134
Bharti Sisodia 2017IPM038
Shweta Kale 2019PGP401

TMM
EXECUTIVE SUMMARY

Toyota Motors Manufacturing having the most efficient process technology in capacity
management and lean production techniques is experiencing issues with seat supply. Currently,
Toyota’s sole seat supplier, Kentucky Framed Seat, is held responsible for the majority of the
issues with flaws in material and missing parts which make up the major encountered defects in
the cars. As the variety and demand is increasing, the existing issues are on the rise. These issues
are presently addressed offline but this is considered a deviation from the policies and procedures
under the Toyota Production System. Now, as the company’s manufacturing ramps up for the
production of the Camry Wagon, it needs to resolve the seat issue before it impacts production
performance. The recommendations from the analysis would be assigning an employee specially
for replacement and manage seat corrections which would be carried out in the specified time
limit. The initial part of it would be notifying the supplier about the defective seats. The QC
personnel would work in coordination with the supplier KFS for analyzing the reasons for the
defective seats and finding an effective solution over it.

We recommend the following major measures to overcome these problems:

Immediate
● Send TMM Quality Control (QC) people to KFS to identify and correct the source of the
problem.
● Place a QC person at the seat arrival dock to check for defects before sending seats to the
line.
● Continue fixing seat defects off line. It is too expensive to stop the line.
● Assign employees to be responsible that correct replacement seats are procured in a
timely manner.

Long Term

● Improve internal communication within Toyota, specifically between the Japanese design
engineers and US manufacturing.
● Decrease seat variety.
 ● Implement TPS processes at the KFS factory. Fujio Cho pronounced this to be the next
step for TMM. KFS is a logical first supplier to implement Toyota’s methods of
production.

ANALYSIS
Preferably, Toyota rectifies deserts on the creation line. Based on its ‘jidoka’ practice, TMM
corrects defects on the production line itself. Be that as it may, vehicles with seat issues are
overseen disconnected after the get together is finished;. This is brought about by three elements;
1) Seats need to coordinate every specific vehicle, consequently stock parts can't be utilized;
2) The provider cycle works under Just In Time (JIT);
3) KFS can't promptly flexibly substitute for inadequate seats.
Halting the line until a substitution seat is accessible isn't an alternative because of the enormous
coming about profitability misfortunes. Despite the fact that KFS conveys seat substitutions two
times every day, KFS now and then sends erroneous seat congregations. As a rule, the
substitution seats are not introduced in an opportune way. There are a few four-day old vehicles
in the flood leaving region.

On April 27th the run proportion was down from 95% to a harming 85%. The counts beneath
show that the decline in per-move creation is near 50 vehicles. The vast majority of this can be
accused on the seat issue. Creating the missing vehicles through extra time limit will cost TMM
in overabundance of $16,000 per move. This means around $8.4 Million every year thinking
about two movements and a 5-day week's worth of work.

The issues are moving down from the mechanical production system to the center; Toyota's way
of thinking is to manage the issue where it was discovered, utilizing their Five Why's approach.
The vast majority of the seat issues, nonetheless, are material imperfections or missing parts,
which can't be revised online in light of the fact that no substitution is quickly accessible. One
potential choice is to have a bigger measure of wellbeing stock, however this is certifiably not a
productive answer for the issue since it repudiates the JIT idea. Moreover, it would require over
the top stock support close to the seat station for right seat-to-vehicle coordinating. Another
answer for this issue is to have fewer seat assortments. This progression would build the odds a
decent seat is in the pipeline. Obviously these two alternatives don't address the genuine issue,
they just give prospects to expanding the proportion of vehicles fixed on line.

TMM's laborers every so often introduce a seat-bolt at some unacceptable point, however this
issue is handily fixed inside 30 seconds. This just represented roughly 11% of all seat issues
between April 14 and April 30, 1992 as indicated by the Group Leader's Seat Defect Data, so
KFS is answerable for the leftover issues. The two most huge issues are material imperfections
and missing parts, which represent practically 60% of all deformities. Unmistakably the issue
should initially be dissected on the provider side.

KFS has been an entirely solid provider to date, so it tends to be accepted that the issues we are
confronting are not because of incompetence. From the case data, it is clear that the issue started
in March 1992 when Toyota started expanding the seat assortments from twelve to around 33.
The issues will additionally increase in May when more assortments are acquainted with plans
with more than fifty. We are foreseeing that this pattern will intensify the issues TMM is
encountering, particularly since KFS is their only seat provider and has displayed weakness to
style multiplication.

It seems that the ten-day change over and the ten weeks to ramp up production that TMM
allowed KFS was sufficient for KFS to efficiently adapt. It looks like the KFS employees are not
sufficiently trained in JIT to allow them to accommodate the level of modifications introduced
with the wagon. This will result in even more defects in the near term.

The $50,000 speculation will settle TMM's concern with the Plastic snare and may legitimize the
cost. At present, the snare breaks about once per move. Expecting two movements for each day
and a five-day week's worth of work, there will be around 500 breaks for every year. Further
expecting an inside pace of return of 15%, every substitution would need to surpass $15 to
legitimize evading the $50,000. Measurements speak to that this event has fundamentally
declined, in all probability because of expectation to absorb information benefits. Moreover, no
issues have been accounted for in Japan where they have utilized a similar plan. Subsequently,
we don't suggest contributing the $50,000 as of now.
TMM could likewise change the seat provider or get an extra provider. Toyota by and large
wants to determine issues with its providers instead of simply supplanting them. Moreover, it is
trying to discover a provider that is topographically nearer than KFS.

Recommendation & Implementation

TMM should immediately implement the following measures:

● · Assign an employee to replacement, manage seat correction and implement a one-shift

requirement
● Similarly have an employee check the seats at the arrival dock to identify problems early
● ·A designated area for vehicles with seat problems should be available in the overflow
parking area to visualize the fluctuation in defects
● Put time limits on replacement seats and how long a vehicle can stay in the overflow
parking area
● If the limit is exceeds, meeting should be initiated
● The supplier should be notified of defective seats as soon as they are discovered.
Employees on the assembly line and in quality control should immediately inform KFS
● At the end, actions should be introduced to revise current procedures in response to
problems. QC personnel should be placed with KFS to analyze why so many defective
seats are getting to TMM
● An effective IT solution should be implemented to improve information flow and prevent
problems and mitigate costs
● Shutting down the line if a seat needs to be replaced is generally not recommended but
the employees should be informed to follow the TPS philosophy and maintain quality and
volume

Long-term Solutions:

A stronger relationship between TMC, TMM and KFS is encouraged. The same should focus on
eliminating issues consequent due to geographical and/or cultural differences.
TMM and KFS would benefit from a TPS integration. The same can be attributed to KFS’
significance in the manufacturing process. KFS employees need to be provided with adequate
resources and training to pinpoint and isolate problems with the line.

TMM may suggest reducing the variety of seats with TMC. Parts produced and bought by KFS
should undergo systematic comparisons with parts produced in Japan.

Risks and Contingencies

● TMC might not concur with reducing the variety of seats. In this situation, KFS could
benefit by focussing on TPS principles to cater to the increased demand in capacity.
● KFS could resist the adoption of TMM and TPS processes.