Toyota Manufacturing

Toyota Motor Manufacturing Case

Problem Identification

In 1992 Toyota Motor Manufacturing USA, Inc. (TMM) saw significant problems with defective seats that resulted in a compromise of Toyota’s lean manufacturing system. This problem stemmed from a couple of major deviations from Toyota’s standardized production system (TPS). This problem was initially caused by a change in world market demand for variations of seats and TMM’s facility being made the sole manufacturer of the Toyota Camry Wagon. Toyota faced significant production issues in the wake of the proliferation of these seats. Toyota’s production facility quickly amassed a total of over 30 variations of seats. This was a change from the previous number of 8 variations.

Analysis

In April 1992, Toyota’s run ratio dropped from 95% to 85%. This ratio represented the amount of cars that potentially could have been produced by Toyota under ideal circumstances. This change resulted in 45 less cars being produced per shift. This result was against everything Toyota valued in its lean manufacturing process. This manufacturing problem had significant impact on many processes within the plant. It translated into more overtime for the workers, more off-line attention for the cars and decreased levels profit and employee morale.

As heretofore mentioned, the main culprits in this production weakness were seat defects. Under normal production rules, when a defect was found in a car part the “andon” was pulled. This triggered an alarm that stopped the manufacturing line and called for the group leader to come and assess the situation. If the problem could be solved the line was re-started. It was during this quality control process that TMM began to deviate from normal production standards. Toyota had established a principle called “jidoka” within their production standards. An important principle of Judoka was to “make any production problems instantly self-evident and to stop producing until the issue was resolved.” This principle becomes so important because of TMM’s approach to JIT delivery. If cars are being taken off-line it poses many possible problems for the timing and delivery of inventory parts to TMM.

For whatever reason, when it came to solving the problems with the seats, TMM decided to deviate from their best practices. When a defective seat was encountered, rather than stop production and fixing the problem, it was decided to keep the defective seat in the car throughout the remainder of the manufacturing process. Since no other manufacturing process depended on the seat, this was deemed acceptable. The seat was simply left in the car until a later time. If a defect was found during seat installation, the seat was transferred to the Code 1 clinic where employees would try to fix the defect. If they were unsuccessful there, the car was transferred “off-line” to await a replacement seat from the seat manufacturer. Statistics from Exhibit 10 show the number of Andon pulls during the first shift for the rear seat increased dramatically from 20 at the beginning of the month to nearly 120 by the end.

It is worth mentioning at this point that the seat itself had violated many of Toyota’s established guidelines for production. In other manufacturing environments Toyota had