Toyota motor manufacturing: Problems and solutions


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Toyota motor manufacturing: Problems and solutions

  1. 1. TOYOTA MOTORMANUFACTURING, U.S.A Case Analysis Powerpoint Templates Page 1
  2. 2. 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 ofthe problems with material flaws and missing parts as the major encountered defects. Powerpoint Templates Page 2
  3. 3. These problems are increasingly occurringwith an increase in varieties of and demand forthe seats. Toyota currently addresses theseproblems offline; however, this is a deviationfrom the policies and procedures under theToyota Production System (TPS). Now, asTMM ramps up for the production of theCamry Wagon, it must address the seat issuebefore seriously impacting productionperformance. Powerpoint Templates Page 3
  4. 4. 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
  6. 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.• 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
  7. 7. • 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. It can include development of techniques like• 1. Six Sigma• 2. JIT• 3. 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. Powerpoint Templates Page 7
  8. 8. Problem 2: Providing Data having Cost ofProduction to TOP LEVEL MANAGEMENTSolution: This would be tough deal to crack as nobodywill like to share their cost of production with othercompany but this can be done by entering into contractwith them to share their cost of production so thatwithout lowering their profit margin we can help themto reduce their cost of production and providing themaid in management as well as production process so thatthey can work up to their full efficiency. Powerpoint Templates Page 8
  9. 9. QUALITY CONTROL DEPARTMENT Powerpoint Templates Page 9
  10. 10. 1.Procurement schedule should match with production schedule. 2. Seat material would be provided at the time of procurement of seats. 3. When the cars would be finally made, a quality check would be done. 4 . Direct link between production and operation department. 5. Scheduling process= production schedule Powerpoint Templates Page 10
  11. 11. MANUFACTURING AND INSTALLATION Powerpoint Templates Page 11
  12. 12. Q. How do we reduce the manufacturing and installation time?Ans. The manufacturing and installation time can be reduced by following the following options:1. As Toyota can use combined seat installation technique, as they have made two separate systems in a divided order, in order to install two seats, so these systems can be combined so that the seats are installed in a car simultaneously, and the time would be saved.2. We can use a better robot, which is much efficient and quick. As when the robot will be quick enough to cope up with faster production , painting system would receive the car sooner, thereby increasing the manufacturing speed. Powerpoint Templates Page 12
  13. 13. INVENTORYMANAGEMENTDEPARTMENT Powerpoint Templates Page 13
  14. 14. Q1-Provide all information on Kanban cards for inventorymovement?Ans.- A Kanban Card include a part code number, its batchsize, its delivery address and other related information. Everypart container sitting on the flow rack along the assembly lineheld one batch & had its own card. The card would physicallytravel between this part -use point & the supplier, whether inhouse or outside to signal the actual parts needed. When thesupplier receive the Kanban, it began making that part in thestated quantity, & shipped a container full of that part to theproper address on the assembly line. Assembly group leadersadjust the number of circulating kanbans for each part withinthe set range to avoid having team runs out of every parts.Kanban cards are used by PC department to determineappropriate kanban range & to feed information back to partsordering for even better inventory control. Powerpoint Templates Page 14
  15. 15. Q2- Feed necessary parts into TMM operating that are needed and write the no. of cars that could be delivered to sale with JUST IN TIME.Ans.- To feed necessary parts into TMM operating PC relied on the extensive forecasting and planning that TMC performed for worldwide markets. To prepare for May production, for example, PC first received, in January, a Production Planning Order (PPO) for key specifications from the sales company. This PPO was revised in February and, after one more update, was fixed as a Total Vehicle Order (TVO) by the end of March. While total volume was fixed in the late March, the PPO was generally accurate only within "20%" of the TVO for most specification categories at that point. Next, the TVO was broken down weekly: by the end of the second week of April it was done for the first week of May. During the third week of April, the initial May weeks information was translated into final part orders for local suppliers as well as a daily production sequence for TMM operations. This procedure left one full week for production preparation. 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. Powerpoint Templates Page 15
  16. 16. Q3- Need to balance out the total order in daily production sequence Hijunka practice?Ans.- 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. Similarly, 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. Hijunka also synchronized the assembly line with the ultimate sales of the cars. Powerpoint Templates Page 16
  17. 17. SUPPLIERSHANDLING Powerpoint Templates Page 17
  18. 18. CONTRACT BETWEEN TOYOTA AND COMPONENT SUPPLIERSBased on the principle of “long-term stable transaction”,Toyota makes an unique “basic control of componenttransaction” with a component supplier. On this contractToyota confirms to promote long lasting prosperity for bothparties and an ideal quality assurance for customers. Hopingthat, perfect quality control is carried but by every componentmanufacturer, Toyota includes in the contract the basic rules ofquality control, the steps to be followed when defective goodscome out and etc. Powerpoint Templates Page 18
  19. 19. UPBRINGING OF COMPONENT SUPPLIERS• In order to develop the component suppliers Toyota assists them in improving management as well as quality control. 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. Powerpoint Templates Page 19
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