Case Analysis

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Toyota Motors Manufacturing (TMM) faces increasing problems with its seat supply. TMM’s single seat supplier, Kentucky Framed Seat (KFS), is responsible for the majority of the problems with material flaws and missing parts as the major encountered defects.

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however. as TMM ramps up for the production of the Camry Wagon. it must address the seat issue before seriously impacting production performance. Now. this is a deviation from the policies and procedures under the Toyota Production System (TPS). Powerpoint Templates Page 3 .These problems are increasingly occurring with an increase in varieties of and demand for the seats. Toyota currently addresses these problems offline.

THIS IS CAUSED BY THREE FACTORS • 1) Seats need to match each particular car. therefore stock parts cannot be used • 2) The supplier process operates under Just In Time (JIT) • 3) KFS cannot readily supply replacements for defective seats Powerpoint Templates Page 4 .


• Quality Control : Quality check Teams can be formed which would work in close collaboration with suppliers so to check on quality of materials supplied by them and suggest them measures to overcome any defect in their manufacturing process Powerpoint Templates Page 6 .Q1.BUYING QUALITY MATERIAL AT LOW PRICES: SOLUTION: • Purchase Department has suggested following ways to procure material at low price and with best quality: • Downward Integration: As Toyota is huge industry and requires large no of stock so if it can go for downward integration it would be a good idea as than it can very well control the inventory for JIT and it will also have a total quality control and will save the cost.

JIT • 3.• Build a Supplier Chain Development Program: This program would help in providing suppliers training and development for their existing staff and manufacturing process by providing them technological aid and at the same time management expertise. Powerpoint Templates Page 7 . Six Sigma • 2. KAIZEN All this will reduce their cost of production which in turn will help Toyota to acquire raw materials and low price without actually lowering profit margin of suppliers and gaining their confidence. It can include development of techniques like • 1.

Problem 2: Providing Data having Cost of Production to TOP LEVEL MANAGEMENT Solution: This would be tough deal to crack as nobody will like to share their cost of production with other company but this can be done by entering into contract with them to share their cost of production so that without lowering their profit margin we can help them to reduce their cost of production and providing them aid in management as well as production process so that they can work up to their full efficiency. Powerpoint Templates Page 8 .

QUALITY CONTROL DEPARTMENT Powerpoint Templates Page 9 .

5. Scheduling process= production schedule Powerpoint Templates Page 10 . 3.Procurement schedule should match with production schedule. 2.1. Seat material would be provided at the time of procurement of seats. a quality check would be done. Direct link between production and operation department. When the cars would be finally made. 4 .


2. How do we reduce the manufacturing and installation time? Ans. We can use a better robot. and the time would be saved. Powerpoint Templates Page 12 . as they have made two separate systems in a divided order. painting system would receive the car sooner.Q. thereby increasing the manufacturing speed. which is much efficient and quick. The manufacturing and installation time can be reduced by following the following options: 1. so these systems can be combined so that the seats are installed in a car simultaneously. As when the robot will be quick enough to cope up with faster production . As Toyota can use combined seat installation technique. in order to install two seats.


& shipped a container full of that part to the proper address on the assembly line. whether in house or outside to signal the actual parts needed. When the supplier receive the Kanban. Every part container sitting on the flow rack along the assembly line held one batch & had its own card. its batch size.Q1-Provide all information on Kanban cards for inventory movement? Ans. The card would physically travel between this part -use point & the supplier. Powerpoint Templates Page 14 . Kanban cards are used by PC department to determine appropriate kanban range & to feed information back to parts ordering for even better inventory control. Assembly group leaders adjust the number of circulating kanbans for each part within the set range to avoid having team runs out of every parts. it began making that part in the stated quantity..A Kanban Card include a part code number. its delivery address and other related information.

To prepare for May production.. was fixed as a Total Vehicle Order (TVO) by the end of March. During the third week of April.Q2. the TVO was broken down weekly: by the end of the second week of April it was done for the first week of May. the initial May week's information was translated into final part orders for local suppliers as well as a daily production sequence for TMM operations. Powerpoint Templates Page 15 . a Production Planning Order (PPO) for key specifications from the sales company.Feed necessary parts into TMM operating that are needed and write the no.To feed necessary parts into TMM operating PC relied on the extensive forecasting and planning that TMC performed for worldwide markets. While total volume was fixed in the late March. PC first received. Ans. Next. the PPO was generally accurate only within "20%" of the TVO for most specification categories at that point. for example. This PPO was revised in February and. of cars that could be delivered to sale with JUST IN TIME. The number of cars would call for 500 base models and 500 luxury models every single day and also demand that a base model and a luxury model be made alternately. in January. This procedure left one full week for production preparation. after one more update.

Hijunka also synchronized the assembly line with the ultimate sales of the cars.Q3. offsetting cars that required a particular operation against those that did not prevented any particular work station from becoming a severe bottleneck or remaining unreasonably idle.Need to balance out the total order in daily production sequence Hijunka practice? Ans.. Similarly.By balancing of the total order in daily production sequence Hijunka practice. the same supplier could stick to a uniform cycle time throughout the month without creating the waste of inventory. Powerpoint Templates Page 16 .

SUPPLIERS HANDLING Powerpoint Templates Page 17 .

On this contract Toyota confirms to promote long lasting prosperity for both parties and an ideal quality assurance for customers. Hoping that. Toyota includes in the contract the basic rules of quality control. Toyota makes an unique “basic control of component transaction” with a component supplier.CONTRACT BETWEEN TOYOTA AND COMPONENT SUPPLIERS Based on the principle of “long-term stable transaction”. the steps to be followed when defective goods come out and etc. Powerpoint Templates Page 18 . perfect quality control is carried but by every component manufacturer.

Powerpoint Templates Page 19 . Various means are available for assisting suppliers in improving systems of management such as: • Toyota quality Control Reward • Guidance of Toyota Production system (Kanban System) • Mutual development by supplier’s organization and etc.UPBRINGING OF COMPONENT SUPPLIERS • In order to develop the component suppliers Toyota assists them in improving management as well as quality control.

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