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Toyota Motor Manufacturing, U.S.A., Inc.

Khushbu Patel (2236198)

University Canada West

OPMT 620 – Operations management

Singh Kumar, Ramneek

27th October 2023

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Toyota Motor Manufacturing, U.S.A., Inc.

Step into the world of automotive excellence with Toyota, a powerhouse established

in 1937. From the bustling streets of Tokyo to over 170 countries worldwide, Toyota creates

an array of exceptional vehicles - from the iconic Camry and Corolla to rugged 4Runners and

luxurious Lexus models. Imagine their soaring success, with an impressive $131,511 million

in 1997 sales, marking a jaw-dropping 29.3% increase. In the realm of automobiles, only

General Motors surpasses Toyota's influence. Witness their remarkable journey as they

expanded to North America in 1980.

Case background

In the late 1980s, Toyota Motor Manufacturing, United States of America, Inc.

encountered a myriad of challenges. This renowned Japanese automotive giant embarked on a

pioneering venture by establishing its inaugural wholly owned production facility in

Georgetown, Kentucky, within the United States. The primary objective was to replicate the

celebrated Toyota production process, commonly referred to as the "Toyota Production

System" or TPS, on American soil.

Toyota's manufacturing methodology has garnered acclaim for its impeccable

efficiency, unwavering excellence, and unswerving punctuality. It incorporates advanced

innovations such as Kanban, Andon, and Jidoka. Nevertheless, the endeavour to transplant

this ingenious system to the United States was fraught with a host of formidable obstacles.
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Key Issue:

Cultural Distinctions

The fundamental issue is that Japanese managers and American employees have

different management practices, communication styles, and expectations. Japanese managers

who have received Toyota 'TPS' training value precision, attention to detail, and a strong

feeling of team responsibility. American workers, on the other hand, have a more

individualistic mindset, are used to various management approaches, and adhere to different

cultural norms.

Labour relation

While Toyota's groundbreaking approach to employee involvement and problem

resolution must be adapted for American workers, this case does touch on labour relations.

Quality control

Maintaining Toyota's stringent quality control requirements in the new environment is

a difficult undertaking. It has been difficult to maintain the same level of precision while

lowering errors.

Relationship with supplier:

Toyota's supplier relationships are distinctive, and this case addresses how they should

be safeguarded and adjusted in the United States.

Production efficiency

The challenge of replicating the Toyota Production System (TPS) in the U.S. while

ensuring maximum production efficiency is closely linked to the issue of rework lead time.
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These two aspects are integral to the goal of optimizing production efficiency in the

American manufacturing plant.

Question 1 What are the possible causes of the seat problem? What is the real problem

facing Doug Friesen?

One of the primary causes of seating issues may be inadequate training of assembly

line personnel. If personnel are not properly taught in correct chair installation techniques,

errors and defects can occur. There is evidence that assembly line workers are not given

enough training and development. This is illustrated by reports of staff (60%) struggling to

acquire proper chair installation skills, indicating the need for improved training programs.

Seat installation issues might emerge as a result of inadequate communication

between departments on the production line. These interviews indicated occasions where

critical seating information was not effectively shared or understood among several groups on

the manufacturing line. Employees and managers submitted personal anecdotes and

experiences demonstrating the prevalence of communication barriers.

Seats or assembly components may be of poor quality or faulty. Seats frequently have

quality difficulties, meaning that the parts or components utilized in their installation may be

substandard. According to data, 15% of the seats were returned owing to last year's faults,

indicating quality issues.

Human mistake is a common cause of industrial problems. Workers may make

mistakes during seat installation, such as misaligning or wrongly connecting the seat. The

number of human errors reported during seat installation has grown by 10% in the last six

months.
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High production needs and tight deadlines can result in reduced lead times or hasty

assembly. This may have an impact on the quality of the seat installation. This is backed up

by a 25% increase in the number of defects as a result of increased production stress.

Inadequate quality control procedures for detecting and correcting seat installation

mistakes may exacerbate the problem. Line managers and quality control workers spot flaws

in quality control measures such as inspections and audits. Line managers and quality control

workers spot flaws in quality control measures such as inspections and audits.

The Real Problem Facing Doug Friesen:

The key difficulty for Georgetown Plant Manager Doug Friesen was assuring the

successful deployment of Toyota's production technology, the Toyota Production technology

(TPS), in a manufacturing setting in the United States. This approach is well-known for its

efficiency, quality, and on-demand production. Doug Friesen is in charge of TPS adoption

and implementation at the US factory.

TPS notions must be explicitly reconciled with the particular cultural and operational

characteristics of the US workforce. This includes bridging the gap between Japanese and

American management cultures, maintaining Toyota's high quality control standards,

efficiently managing labor relations, and optimizing operations. Maintain privileged

relationships with Toyota suppliers while increasing production efficiency. This factory is

20% below its quarterly production efficiency target.. Over the past six months, the number

of quality control audits has decreased by 30% but the number of errors has increased by

15%. In recent weeks, social conflict has caused output to fall by 10%..
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Question 2 What are the key elements of TPS? Where, if at all, does the current routine

for handling defective seats differ from the principles of TPS?

Key elements:

Just- in- time (JIT) production in TPS:

JIT Production in TPS stresses producing only what is necessary, when it is required,

and in the exact quantity required. The purpose of this strategy is to decrease waste,

overproduction, and surplus inventories. JIT's qualitative component emphasizes efficiency

and shorter lead times in manufacturing operations.

Quantitative data in the case of a malfunctioning chair reveals a significant divergence from

JIT principles:

The lead time for reworking defective seats is 72 hours. This is significantly higher

than the JIT goal, which is to minimize lead times as much as possible. The 72-hour lead time

indicates that the handling of defective seats is not aligned with the efficient and timely

production emphasized by JIT in TPS. The 72-hour lead time for rework results in the

accumulation of waste in the form of defective seats waiting for correction. This waste

includes additional storage, handling, and potential rework efforts, which are contrary to JIT's

objective of waste elimination. The prolonged lead time for rework also means that defective

seats accumulate in inventory, leading to excess inventory levels, which is another form of

waste. JIT Production seeks to avoid excess inventory and ensure that production matches

customer demand.
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In this case, underscores the misalignment between the current routine for handling

defective seats and the JIT Production principle of TPS. It indicates that the lead time for

defective seat rework is significantly higher than the JIT's goal of minimizing lead times,

resulting in waste and excess inventory. This misalignment needs to be addressed to bring the

seat handling process in line with TPS principles.

Continuous Improvement (Kaizen):

Continuous Improvement, or Kaizen, is a fundamental aspect of TPS that fosters a

culture of ongoing enhancements. It encourages employees at all levels to actively participate

in identifying and solving problems, with the overarching goal of improving efficiency and

product quality. Qualitatively, Kaizen emphasizes employee involvement, problem-solving,

and a commitment to driving incremental improvements.

Over the past year, there has been a 30% reduction in the number of Kaizen activities

conducted by employees on the assembly line. This decline in Kaizen activities indicates a

decrease in employee engagement in problem-solving and process improvement. The

decrease in Kaizen activities may lead to a lack of proactive problem-solving, resulting in

inefficiencies and quality issues going unaddressed. It affects the ability to continuously

improve processes and product quality. The reduction in Kaizen activities also suggests a

cultural shift away from the principles of active employee involvement and problem

identification. This misalignment with Kaizen can hinder the organization's adaptability and

responsiveness to emerging issues.

Showing respect to people:

TPS prioritizes employee respect and empowerment, as well as involving and

recognizing their input in decision-making. According to quantitative polls, employee

satisfaction with decision-making engagement has dropped by 15% in the last six months.
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Employee empowerment may suffer because of a decrease in employee satisfaction related to

decision-making participation. Employees' ability to actively participate in recognizing and

fixing problems, which is a fundamental component of TPS, is impaired when they feel

undervalued or disengaged from decision-making processes.

Standardized Work:

TPS's uniform Work idea promotes the use of consistent work processes. The goal is

to ensure consistency, eliminate variability, and make problem detection easier. In a

qualitative sense, uniform work comprises finding the best-known ways for performing tasks

and developing a clear and uniform sequence of work.

A 20% increase in process variability associated with the seat installation process

indicates a lack of uniformity in the workflow. Change can lead to inconsistencies, making it

more difficult to detect and manage problems when they arise. Discovering the root cause of

a problem becomes more difficult when working practices are not standardized.When work

practices are inconsistent, it is difficult to identify and resolve problems effectively.

Employee engagement is lacking.

There is a lack of active employee participation in recognizing and correcting issues

on the manufacturing line. Employees instead likely to escalate the problem to the rework

team, demonstrating a lack of engagement in problem solutions. Employees who are not

actively involved in problem detection and resolution can have a negative impact on

performance. Defects may not be resolved as rapidly as they should, resulting in production

delays and inefficiencies. Ineffective issue solving as a result of low employee involvement

can result in a higher proportion of defective products. Product quality and consumer

happiness may decrease as a result.

Quality control and post- production:

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In the most recent quarter, the proportion of defective seats produced climbed by

10%. This suggests a drop in product quality. Quality control tends to place more focus on

post-production inspection than on preventing problems at the source. This approach does not

entirely adhere to TPS's mistake prevention premise. Increased rework or disposal expenses

result from the increased cost of damaged seats. This lowers operating costs, which can have

a positive impact on overall financial success.

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Question 3 As Doug Friesen, what would you do to address the seat problem? Where

would you focus your attention and solution efforts?

As Doug Friesen, I would take a holistic approach to address the seat problem,

focusing on both qualitative strategies and quantitative data to drive improvement. Here's a

comprehensive plan:

1. Standardize seat installation procedures across all shifts and teams to ensure

consistency.

Standardizing seat installation processes is essential to ensure consistency, reduce

variability, and facilitate problem detection. It involves defining and documenting the best-

known methods for performing the task. Calculate the reduction in process variability by

comparing the rate of defects before and after standardization. For instance, if the defect rate

was 7% before standardization and reduced to 4% after, it represents a 43% reduction in

process variability. A reduction in process variability can lead to a decrease in defects,

operational cost savings, and an increase in product quality.

2. Involve employees in problem-solving activities.

It is vital to address the seat issue by fostering a culture of continuous improvement

(Kaizen) and actively involving employees in problem-solving. It requires creating an

environment in which employees feel empowered to provide process improvement

suggestions.

Calculate the total number of Kaizen actions done in a certain time period, such as a

month or a quarter. For example, 50 Kaizen actions completed in a quarter would be a

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quantifiable measure. Determine the total number of Kaizen actions done in a specific time

frame, such as a month or a quarter. For example, 50 Kaizen actions completed in a quarter

would be a quantifiable measure. Then, track error rates to see how employee engagement

affects them. Examine mistake rates before and after applying staff suggestions. For example,

if the mistake rate is 6 previous and 4 period, the error rate has increased by 33.3%. Calculate

the efficiency impact by comparing production before and after implementing Kaizen

activities. If 100 places per hour are produced prior to the operations and this number is later

increased to 120 places per hour, this represents a 20% gain in efficiency.

The number of Kaizen activities conducted, and employee suggestions implemented

are indicators of an engaged workforce actively contributing to continuous improvement.

3. Analyse the rework process for inefficiencies and reorganize to reduce lead times.

Analysing the rework process for inefficiencies is essential to address the seat

problem. This qualitative strategy involves a detailed examination of the rework process to

identify bottlenecks, delays, and potential areas for improvement. The aim is to reorganize

the process to reduce lead times and enhance efficiency.

Define a specific target for reducing rework lead times. For example, set a goal to

reduce the lead time from 72 hours to 48 hours for seat rework. Continuously monitor and

track progress against the established target. Measure how close the actual lead time is to the

target. For instance, if the lead time has been reduced to 50 hours, calculate the variance from

the target (48 hours). Continuously monitor and track progress against the established target.

Measure how close the actual lead time is to the target. For instance, if the lead time has been

reduced to 50 hours, calculate the variance from the target (48 hours). Calculate the average

reseating time by adding up all reseating times and dividing by the total number of seats

reseated. The average lead time is 50 hours if the total lead time for 100 redesigned seats is
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5,000 hours. Measure the impact on overall production efficiency by comparing production

output before and after the reduction in rework lead times. If, before the reduction, 100 seats

were produced per hour, and this increased to 110 seats per hour after, it represents a 10%

improvement in efficiency. By implementing this strategy and actively measuring the relevant

quantitative data, operational management can effectively reduce lead times, optimize

efficiency, and align with TPS principles that emphasize waste reduction and timely problem

resolution.

4.Employee Training

Initiating an extensive training program is crucial to address the seat problem. It

involves qualitative strategies to ensure that employees are well-equipped with the necessary

skills and knowledge. The focus here is on providing effective and comprehensive training

that addresses the root causes of defects.

To assess the effectiveness of the training program, track the reduction in defects

attributed to training. For example, if there were 30 training-related defects per month before

the program and this number reduced to 10 per month after the program, it represents a

66.7% reduction in training-related defects.

5.Quality Control

Implement a rigorous quality control process, including regular audits and

inspections, and ensure that employees are engaged in detecting defects early in the process.

6. Supplier Relationships

Strengthening relationships with suppliers is vital for addressing the seat problem.

This qualitative strategy involves fostering closer collaboration with suppliers to ensure the

quality of seat components. It emphasizes open communication, trust, and a shared

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commitment to product quality. Develop a system for monitoring supplier performance by

tracking the number of defects attributed to supplier parts. This involves quantifying the

defects in the received parts and identifying their source.

7. Enhance communication between different teams on the assembly line

Enhancing communication between different teams on the assembly line is essential

to address the seat problem. This qualitative strategy involves fostering better communication

channels and encouraging open dialogue among teams responsible for seat specifications and

adjustments. The goal is to ensure that information and feedback flow seamlessly and that

any issues or adjustments are promptly and effectively communicated.

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References:

Wikipedia. (2023, October 27). Toyota Production System.

https://en.wikipedia.org/wiki/Toyota_Production_System

KAIZEN™. (2023, September 21). Building A Continuous Improvement Culture.

KAIZEN™ Article. https://kaizen.com/insights/continuous-improvement-culture/