Toyota Case

Executive Summary

The automobile industry can be considered one of the most competitive industries that exists today. The production has to be flawless, the employees hardworking and the managers fully aware of their product. This case study discusses the Toyota production plant in Georgetown, Kentucky.

In July of 1988 Toyota Motor Manufacturing (TMM), USA began producing Toyota Camry sedans. Toyota implements the Toyota Production System (TPS) in their Georgetown plant, similar to all other production facilities. This system reduces cost by eliminating waste. Excess production consumes extra space and human resources to control the products. The two governing principles that Toyota modeled the TPS system after are Just-In-Time (JIT) production and Jidoka. JIT emphasizes the process of producing only what is needed when it is needed. Jidoka focuses on making any production problems instantly self-evident and production would cease when a problem arose. Toyota performs Jidoka by using andon cords to highlight with buzzers and lights the step with the non-compliance. Toyota uses these processes to outperform its competitors and deliver a high quality product.

The Georgetown production plant uses Kentucky Framed Seat (KFS) to supply the seat sets for the entire production taking place at the plant. KFS follows a JIT system of production. When the body shells are finished with the paint line the information about the car is sent to KFS. This information enables KFS to ship out the corresponding seat sets in the correct amount of time to synchronize when the car arrives at final assembly and the seat sets are needed to be installed.

In April of 1992 the Georgetown plant began to experience a decreasing run ratio. This ratio is calculated as the number of actual cars that were assembled to the actual amount of cars that could have been assembled with no interruptions to the assembly line. During the May 1st meeting of Lewis, DaPrile, Friesen and other managers in the overflow parking area it was found that 18 vehicles had various seat problems. A seat problem ranged from if a seat did not match the corresponding car when it arrived at the final assembly area or if the seat contained defects. All of these problems were handled in a similar way, the andon cord was pulled to alert the team lead and then the car was flagged to be alerted to Quality Control. From here the car would be sent to the Code 1 clinic area to see if the problem could be fixed, if not then the car was sent to the overflow parking area where it would wait until a new seat arrived from KFS.

Upon inspection into the overflow parking area one car was found to have been flagged on April 27th, this time delay was unacceptable because the maximum amount of time in this area should be two shifts. This seat problem was starting to become a large factor that would affect the production ability within the Georgetown plant. Many possible answers exist that would help Toyota mitigate the risk with the seat sets supplied from KFS. A failure investigation would be the best course of action. This would find the problem and address the issue so it would stop the repeating problem from occurring. While the investigation is ongoing interim solutions could take place that could also be implemented in the long term if deemed necessary. KFS could ship replacement seats more frequently than twice daily. TMM could carry spare seats in inventory to ensure that any seats could be swapped out immediately.

Analysis

A failure investigation would best serve Toyota in the long-term and would help all employees study the problem rather than just use a short-term solution. This failure investigation would be similar to the "Five Whys" approach (exhibit 2). The failure investigation would reinforce the Toyota emphasis of "good thinking" by sticking to the facts and getting down to the root cause of the problem. The failure investigation would begin with an engineering investigation into the problem. This would consist of generating possible reasons for the failure. In the case of the seat failure some possible reasons that would require deeper investigation would be: does KFS have an inventory problem when a special request is submitted, did the hook material change affect that installation process, etc. From this step in the process all the possible reasons would then be closely looked at and eliminated if applicable. From the remaining possible reasons the highest probable reason would be resolved first, while taking into consideration the cost of the resolution. The failure investigation would solve the problem and would also determine the best long-term solution to prevent it form happening again.

TMM should also be using a better Engineering Change process. They should be tracking EC's with better traceability. Shirly Sargent, the group leader of Final 2, mentioned that she had filed an EC several months prior to May but she had not heard back any information regarding a solution. She should have heard an answer faster and the EC should have been tracked by TMM. Tracking EC's would give TMM a better idea of an acceptable turn around time and ensure that it was always followed as a minimum. It turns out that it would cost KFS $50,000 to complete the EC and this was an investment they were not willing to make. When Friesen looked into the hook problem he learned that Tsutsumi had identical drawings and that the number of breakages had decreased from 7 occurrences to 1 over the course of a few months. Friesen should communicate with the lead at this plant and find out why this happened. It is possible that after the assembly line workers learned how to work with the material that the failures would decrease. Friesen needed to find out if this problem would go away with experience or would it be necessary to change the design.

KFS only delivers replacement seats twice a day and these seats are sometimes not the correct seats that match any of the cars waiting for rework. TMM needs to find out if the seats are not correct because KFS cannot interpret the fax correctly or if they are sending the wrong seats because their computer system cannot account for extra inventory in the shipment. Both problems would deliver an incorrect seat