WA

TOYOTA MOTOR
MANUFACTURING
CP

Ahmed Abdur Rahman

18519
Synopsis:
The case is focused on how the TMC, started working in Kentucky in 1985. Toyota originating
from Japan, faced a number of issues while setting up the plant in the US. In order to grab
maximum share in the US market, Toyota Motor Manufacturing(TMM) adopted a few different
techniques. TMM produced was producing Camrys for the first few years and their operations
worked with following the Japanese methods. But in 1992 with the increase in the production
from 200,000 cars, to 240,000 and different type of Camrys TMM started feeling multiple issues
specially regarding their seats.

Problem Statement:
Company is facing the problem of rising number of Camry’s defective seats, which in turn
decreases the production level and increase of overtime work and lead time.
Analysis:
Current Scenario:
 Toyota always focused on means meeting diverse customers with flawless quality and at
an affordable price with perfect timing. “Better Cars For More People”
 Toyotas Production System:
o The System was implemented to reduce the cost of production by eliminating any
waste that would be produced in the production process.
o Capital in inventory was tied up
o Space for storage in warehouse was reduced.
o It took a lot of time to keep track of the inventory
o Bottlenecks process was concealed.
o Which led to investment in wrong machines.
o TPS used two guiding principles:
 Just in Time (JIT)
 Jidoka
 Jidoka was used to aid in detecting immediate problems and provided
visual controls.
 In order for that to work, The production state had to be understood and
well characterized.
o Kaizen System was implemented. This system had 4 parts,
o 1- Plan
o 2- Do
o 3- Check
o 4- Act.
 First step was to identify where the problem lied then questions would be
asked to get to the root of why the problems have been occurring
 Then suggestion of solution took place to stop those problems from
recurring.
 To make sure that the best possible result take place, multiple solutions
were tested.
 Finally, the best solution had to be executed.
 Assembly Line:
 o Assembly line used Andon System, whenever there was a problem an Andon card
was pulled.
o Pulling the card would send a message on the Andon Board, which then can be
reviewed by the supervisor and then he must decide wither to stop the operation to
fix the issue or something else.
 Production Control:
o Booking of orders were done way before then production started and were
updated regularly
o This made sure that the only required inventory was kept to keep the holding cost
to minimum.
o In each shift there was a equal distribution in producing simple and luxury cars,
heijunka practice was followed. Same assembly line was use to produce two
different types of cars which also helped the suppliers.
o A card which included a part’s batch size, its code numbers, its delivery address,
and other information which was related to the order. This card was called
Kanban cards and triggered production.
o Employees would only produce when a card was issued to them and only produce
the quantity which was mentioned in the cards and then shipped to the address
mentioned on the card.
Suppliers:
In order to achieve the goals of the production, the company needed to have their suppliers
aligned with their goals. That is why the production department was kept separated from
production. But due to the expected increase in the demand of the cars and the increase in
variations of the car, the suppliers had to adjust with the new demand. This led to number of
problems, specially with the production of seats, which were supplied by Kentucky Framed
Seat(KFS).

Previously the seats were produced in aligned with the cars being produced in the TMM plant.
But now with the increase in demand, the quality of seats has significantly reduced.

Analysis of the Problem:

1. One of the solutions might be that the Just-In-time methods needs to be a bit flexible, and
this would help KMS in ensuring that the demand of the seat is met, and there are some
seats already present in the plant. This will also decrease the cost of overtime as well,
since the quality checks would decrease, and less time would be spent on the correcting
the problem of defected seats.
2. There should be some safe stock in for seats since it is a very delicate part of the car.
3. Metal hooks were used which caused some damage, they can change a design by using
plastic instead.
4. One more feasible solution is that TMM can find another seat supplier in order to divide
the load of the KMS. This will ensure that KMS will maintain the quality due to
introduction of the competition in the industry.
Conclusion:

With the decrease in the run ratio(the number of cars produced without stopping the assembly
line) was down to 85% which meant that 45 less cars were being produced in one shift. This was
mainly due to the lack of getting the perfect seats from the supplier. The company had some
issues while handling of the seats, which could be mitigated by well training of the workers. But
as we can see in the Exhibit 8 that the biggest problem was with the supplier.

There need to be a bit of upgrading of design of the seats, because there are delicate as compared
to the other parts of the car and they required special attention.