TOYOTA MOTOR MANUFACTURING INC.
Prepared By –
Ashwin Mehta – 313
Pratik Mehta – 314
Ishaan Parekh – 315
Ankit shah – 317
Dishank Shah – 318
Fenil Shah - 319
Suggestions and recommendations
Risks and contingencies
• Toyota Motors Manufacturing (TMM) faces increasing
problems with its seat supply.
• Kentucky Framed Seat (KFS), is a single seat supplier
• KFS is responsible for the material flaws and missing
parts as the major encountered defects.
• These problems are increasingly occurring with an
increase in varieties and demand for the seats.
• Product proliferation problems with defective seats.
• Company’s deviation from its normal production plan and lack of
a recovery system.
• Run ratio dropped from 95% to 85%.
• This means 45 less cars were being produced per shift.
• This translated in overtime of workers.
• Too many cars needed off-line operations of one type or the
another before they could go on shipping.
• Will the sales company get cars on time as promised?
• What does it mean to implement JIT and Jidoka
principles to this situation?
• Is TMM handling seat defects correctly on the line?
• Is the current routine for handling seat-defect cars
really a legitimate exception to TPS, or could it be a
dangerous deviation from TPS?
• Is there a way to kaizen TMM’s off-line routine?
Rise in number of Camry’s with defective seats,
leading to a reduced run ratio at the TMM
On April 27th the run ratio was down from 95% to a
Decrease in per-shift production is close to 50 cars.
Producing the missing cars via overtime capacity
will cost TMM in excess of $16,000 per shift.
This translates to around $8.4 Million per year
considering two shifts and a 5-day workweek.
Wage/Hour $ 17.00
Overtime $ 25.50
Cycle Time 1.05 Cars/Min
Shift Length 525 Minutes
'Productive' Minutes 450
'Lost' Cars Per Shift (95% to 85%) 47
Cost per Hour of Production Overtime $ 19,610
Time Required to Produce Add'l Cars 50 Minutes
Cost to Produce Additional Cars $ 16,215
From 3 styles x 4 colors, to 36 different seat styles.
Seats need to match each particular car, therefore stock
parts cannot be used.
Sequential pull with a 57 sec line cycle time means
response time for KFS to come up with the next seat is
Greater variety of styles and heijunka concept means more
frequent changes in seat line setup
Suppliers operate under JIT
The Root Cause
TMM did not internalize the TPS philosophy. It only
emulated the systems from Toyota, Japan.
KFS balanced capacity to meet TMM Production. It
did not have the TPS implementation to respond to
the product proliferation.
It only learnt system from the Japanese seat suppliers,
not the underlying philosophy.
Not allowing the seat problem to be solved in real time
but just tagging it for storage in the rework area is a
gross violation of the jidoka concept.
The Snowballing Mistakes
Thinking that it is too expensive to stop the line. Andon pulls
don’t stop the line at once. 353 workstations would slow down to
a halt depending upon time taken for rectification.
Illegible re-order form instead of a proper kanban system might
be leading to slower turnaround from KFS
Additional time pressure on KFS would further interrupt their
production line, deteriorating quality further
KFS is blamed for the seat defects without going for the Five
Why’s to determine the root cause of the problem
KFS being treated as a supplier as opposed to the partnership
model JIT actually professes
• Given that 88% of seat defects is from KFS, TMM needs to participate
in KFS’s QC Process, perhaps by placing its own personnel
• Defective items need to be fixed on assembly line and not postponed
• Design review needs to be done to see if so many different seat styles
are actually necessary
• Heijunka system may be avoided given the wide variety. This would
ensure that a replacement is at hand within 1 minute
• A drum-buffer-rope model of intimating KFS of replacement stock as
soon as it is discovered needs to be installed. A contingency kanban
may be designed.
Seat spec recvd
Seat setup as per
spec on KFS
by TMM QC
person at KFS
Seat recvd at
in the car
If seat found
If seat needs
kanban sent to
Seat is re-
Seat replaced if
rolls out of
Legend Normal flow Flow for replacement seats
TMM should immediately implement the following measures:
Assign an employee to manage seat correction and replacement
and implement a one-shift requirement.
Designated area should be available for the vehicles with the seat
Problems should be resolved by notifying the suppliers of
Actions should be introduced to revise current procedures in
response to problems.
TMM should consider the following long-term solutions:-
Close relationship should be maintained between KFS,
TMM and TMC to over come barriers.
TPS integration will benefit the Toyotas supplier network.
TMM should recommend a reduction in the variety of
seats with TMC.
Risks and Contingencies
• TMC might not feel that the variety of seats could be
• KFS might not be able to react to the increased
• KFS could refuse to adopt TMM and TPS procedures