TOYOTA Motor Manufacturing, U.S.A.

,Inc

Group 10 - MBA27 - Mar.2019, Ho Chi Minh City

AGENDA
1. Toyota’s background
2. Toyota’s Motto
3. Toyota’s principles – operations
4. Problem and Solution
5. Comparison with other company
6. JIT and jidoka practicing (Just-In-Time) in Vietnam

2
 Toyota’s Background
TMM in Georgetown - annual
Toyota building cars in
capacity of 200,000 Toyota
North America
Camry sedan

1980s 1988

1985 1992

TMC plan to open TMM was expected to

$800m plant in Kentucky supply >20% since fall
1991
 Toyota‘s Motto
“Better cars for more people”
Flawless Quality

Perfect Timing

Affordable Price

Diverse Preferences
4
 Toyota ’s Principles
• Aiding immediate problem detection
Jidoka • Facilitate visual control

Andon • Signal highlighting problem

Kaizen • Change for better

JIT (Just-in-time) • Producing only what, how and when are needed

Heijunka • Production smoothing and leveling

Kanban Card • Signal board – ordering parts

5
 Toyota ’s Operations
Jidoka, Andon,
01 Assembly ● Production line
Kaizen

● Mission: to feed necessary parts

Product into operation Heijunka,
02 ● Tasks: coordination with TMC, Kanban
Control sales company & local suppliers
● Provide instant feedback to direct
Quality operations
Jidoka, Andon
03 ● Proactively prevent problems in
Control the 1st place

● Manage cost over the long haul

04 Purchasing ● Estimate cost using cost data Kaizen
shared by the suppliers
6
 Signs of Problems
Run-ratio Old Camry model
decreases
95% to
• 3 styles and 4 colors
85%

1992 Camry model

• 5 styles and 3 colors

Product
Proliferation Mar. 1992 - Launch Camry wagon

(increase 12 kinds of For North America: add 8 seat variations

seat to over 30) For Europe: add another 10 seat
High level of Defective cars
are left variations
off-line unattended for
inventory For Japan & the Middle East: add another
a long time 18 seat variations

7
 Root causes

Sharp increase of product (seat set) variations

* Sole seat supplier: Kentucky Frame Seat

* Inefficient supplier’s quality control

* Incidents were not closely followed up

* QC detected the issue but didn’t report timely

8
 Solutions
Short-term
➢ Discuss between TMM QC & KFS to identify
and correct problems from root.
➢ Place QC staff at the seat arrival dock to
check defects before seats go to the line.
➢ Continue fixing seat defects off-line.
➢ Assign staff to be responsible that
replacement seats are procured in a timely
manner.
Long-term
➢ Improve internal communication within
Toyota, specifically between the Japanese
design engineers and US manufacturing.
➢ Create electronic order system, avoid
handwriting orders.
➢ Redesign the Product: Decrease seat variety.
➢ Implement TPS processes at KFS factory.
➢ Integrated KFS staff & process to TMM QC
process to detect and fix flaw on-the-line.
➢ Call for 1 or 2 more suppliers to reduce
production risks.
9
 Take away
● Try to have a Generic Product as late as possible in the supply
chain.
Differentiate it into a customized one, preferably when demand
penetrates the supply chain - Golden rule No. 19
● Process and/or Product redesign may help supply chain
operations – G 21
● Delayed product differentiation is the key to this redesign – G 23
● Technology helps in supply chain efficiency – G 11

10
 Comparison with another company

Spanish retailer

JIT Production Centralization of Singularities

stocking
● Only 2 weeks of design ● Main distribution Zara have elements that
before launching new centre called “The add value in every step of
collection Cube” supply chain

● Vertical integration
● Suppliers near factories to order
only on a need basis
● Robots for cutting patterns
avoiding waste in Spain
● Small batches for new fashion
● Able to respond to market
changes
● Avoid deadstock and create
scarcity
● Price tag and packed security
done before packing
● 50% of production locally better
for reducing lead time
● Policy of zero advertising
11
Designer in Spain sketches with
store managers on the latest
trends
Fabric is cut 8,000 pieces and
New items arrive stores all around
sewn together at a nearby
the world
factory

01 03 05

Day 1 Day 2-5 Day 6-21 Day 21-24 Day 25

02 04

A pattern creates a Apparel is driven to

prototype distribution center
JIT and Jidoka in Vietnam - How Tiki delivers goods in just 2 hours

• Tiki is one of the top E-commerce company in Viet Nam

• Storing and distributing over 300.000 products of 25 categories
• The platform generates about 50.000 orders daily
• Own 2 large distribution centers in Hanoi and Ho Chi Minh City
• Tan Binh (HCM) warehouse with over 5000 sqm has over 90%
fulfillment rate

13
JIT and Jidoka in Vietnam - How Tiki delivers goods in just 2 hours

Customer order on the platform

Platform receive orders and transfer to warehouse

Platform make demand prediction based on customer behavior analyzing

Warehouse receive and process orders

Based on prediction of the platform, the company practice heijunka in storing
products on warehouse

Delivering

Receive cash and close order

14
JIT and Jidoka in Vietnam - How Tiki delivers goods in just 2 hours

Buffer inventory
Packaging and delivering process

Heijunka practicing in Vietnam

15
 JIT and Jidoka in Vietnam - Suggestion

To optimize warehouse space by

Vendor Management Inventory Strategy Standardizing packaging
Optimize pre-delivery
processing
Build multi-functional worker policy

Building qualification standards

management in massive scale to
Transforming from manage product quality of retailers
Centralize storing into
VMI Develope partner retailer system
and decentralize storing place

16
17