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Case Study I – Toyota Motor Manufacturing, U.S.A., Inc

Yousra Marium (2211056)

University Canada West

OPMT 620: Operations Management

SECTION 07

Instructor: Professor Angel Valerio

29th July, 2023

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Table Of Contents:

Executive Summary:........................................................................................................................3

Problem Identification & Scope of the Study on Toyota Manufacturing:.......................................4

Case Analysis:..................................................................................................................................6

Recommendations:..........................................................................................................................8

References:......................................................................................................................................9
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Executive Summary:

This case study examines the issue of defective seats and off-line inventory accumulation

at Toyota Motor Manufacturing (TMM) during April. Key problems include a decline in the run-

down ratio, failure of the JIT and JIDOKA systems, and issues in production and quality control

at supplier KFS. Independent problem-solving and innovative thinking are highlighted as crucial,

alongside extensive training and guidance. To address the problem, using the 5 Whys technique

is recommended, and strict adherence to JIT principles and proactive KAIZEN approach is

essential. Immediate actions involve relocating inventory and better communication with

suppliers. Additional experienced personnel and simulation training can improve efficiency. A

comprehensive and holistic approach involving all stakeholders is vital for successful

implementation. With these strategies, TMM can resolve the seat problem and enhance

production system efficiency.

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Problem Identification & Scope of the Study on Toyota Motor Manufacturing Seat Problem:

The main problem encountered in the Toyota Motor Manufacturing facility during the

month of April was the defective seat problem and the off line pile of inventory level. It appears

that the run-down ratio went down from 95% to 85% in a very short span of about a week, which

brought down the production levels by 45 cars a shift. If one takes a deeper look into the

problem, one can see a multi-fold issue that is being decoded by Mr. Dough.

It seems that Mr. Dough’s Total Production System took a hit in efficiently managing the

hiccup caused by the seat problem. The JIKODA and JIT system failed which is reflected in the

behaviour of the team in accepting an exception to the standard system to carry out the assembly

line even without solving the defective/quality problem of the seat in process. KAIZEN effect of

proactively improving the change to bring in better quality to the system has been ignored as no

steps were taken by the group leader even after acknowledging the problem.

In addition to this, the process of production control and the quality control of KFS seems

to have failed due to the numerous variations it had to accommodate in the a very short period of

time. Since TMM was a larger firm and financially strong as opposed to its KFS associate, it

could accommodate the uneventful change within a short stretch of tempo which in contrast gave

a hiccup to the systems of KFS and thus increased the quality and process issues to a greater

extent at KFS.

Lastly, this situation also highlights the fact that extensive training and guidance from a

competent leader alone are not enough to tackle unprecedented challenges. True resolution

requires individuals to possess the capability to think critically and creatively, reaching beyond
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the boundaries of standard procedures. Consequently, while training can be intensive, it cannot

entirely substitute the power of independent problem-solving and innovative thinking.

As a Finance Controller, I did face a similar problem in handling Botox medicine

inventory which required proper storage and utilisation with in a specified period of time to be

effective after it’s opening. When at first, I joined the organisation, I noticed the cost of inventory

was profusely higher than the industry standard, to which the management excused as a quality

control measure and ignored the fact for 3 previous years.

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Case Analysis:

Being in the shoes of Dough Friesen, I would focus on the 5 Y’s, which he failed to

answer on Final Line 2. He himself failed to follow the JIT and JIDOKA system set up in TPS of

TMM, USA, which he later realised when at the end of the meetings he revisited the Final Line 1

& Line 2. I would take into hands the immediate action that would require me to understand the

TPS of the suppliers KFS and see what quality or production control problem is he facing. I

would suggest to move the off line piled up inventory and deploy more of our personnel to the

supplier’s place for better and effective communication and reduce the replacement time required

for the defective seats.

Besides this, other options that would exist is to induce more experienced personnel in

shift 2 where the graph for Andon’s pull was higher due to new rotational shift employees in that

area or provide more simulation training on their off-duty time for better output. Other than this,

I would re work on the off line process of the defectives received and see if I could fix it within

the assembly line, besides having a red alert for any car that would be siting in that area for more

than 2 hours.

Apart from this, I would also concentrate on giving a little extra 3 seconds to the

employees who would require the cross threading to be done in the correct way rather than

working on it again by re tooling it. Alongside this concentrate on the missing/broken or wrong

part that has been supplied by KFS and expediate the process in a more efficient way on the

assembly line itself by communicating the right problem to the quality control department in

detail of the KFS supplier.

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Yes, the current routine deviates from the TPS of JIT & JIDOKA process. Lack of JIT is

reflected when the car is only tagged on the assembly line for having a defective/missing seat

and seats replacement isn’t ordered on the spot but when it reaches Clinic 1. Besides this

JIKODA system also took a leap in inefficiency when the assembly line was made to move

irrespective of the fact that the car has a defective seat and an exception to the standard

procedure was created to accommodate the defect.

The very basic underlying cause for the problem was that, the root cause of the problem

itself was not explored and hence was only superficially fixed out of the standard procedure.

(Mishina, 1995)

A very similar dilemma that I happened to come across and took charge to solve was the

Botox Medicine usage and issue. Generally, a 10ml bottle of Botox was used for each customer,

and a name used to get printed on the bottle along with the date of opening so that when

customer comes back for follow up, the same bottle was used to utilise the remaining quantity of

medicine left. I noticed through observation and walk through process that sometimes a whole

bottle of 7ml might get disposed due to lack of complete usage and no follow up visits by the

customer. I proactively took authority to solve this issue and decided to eliminate the use of

printing of name on each bottle and instead marked the quantity which was left over along with

the date. Further First in First Out concept was introduced which helped in efficient utilisation of

the product thereby using the unused medicine in using it for follow ups besides free

consultations and discounted customers for smaller areas. Apart from this, whenever we reached

a fixed quantity of used bottles of Botox Medicine, we declared discounts and included them in

marketing strategies and used the left-over medicine instead of disposing it, further helping to

increase the outreach of our customer base and reduce the cost of marketing department.
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Recommendations:

I strongly recommend that Dough thoroughly investigate the issue outlined in the case

study by utilizing the 5 Whys technique to identify the root cause, not only within their own TPS

(Toyota Production System) but also at their KFS facility and among suppliers. It is crucial for

group leaders and senior management to address even the smallest concerns promptly, given the

JIT inventory system's reliance on professionalism and adherence to procedures without any

room for error. There are no alternative methods available, so it is essential to execute tasks in

the best possible way or find improved approaches. In cases where JIKODA appears

compromised, immediate action should be taken to prevent problems from escalating. Defective

parts must be promptly replaced as soon as an issue is detected i.e., at the point of tagging the car

itself, a replacement should be ordered, and efforts to identify and rectify any loopholes should

be prioritized to prevent further complications and potential costs.

Besides this, I would recommend all the group leaders to be given training with the help

of unprecedented fictional simulations by the management, which would put them to rigorous

and constructive out of the box thinking exercise to help overcome such problems in case,

encountered. The standardized process belongs to a very dynamic industry here and thus the

reason to relate to such accommodations through simulations will help them deal with the change

required.

Lastly, without a comprehensive and holistic approach that includes sufficient time and

investment to involve all stakeholders in the production line, including suppliers and the sales

team, it would be challenging to successfully implement these principles.

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References

Mishina, K. (1995). Toyota Motor Manufacturing USA Inc. Harvard Business Publishing

Education, 9-693-019.