Toyota Motor Manufacturing

Case Overview

Toyota Motor Manufacturing, USA (TMM) is a subsidiary of the Japanese Toyota Motor Corporation (TMC), which TMC was forced to open under political pressure from the US in 1985, to replace the bulk of Japanese imports of the very successful Camry.

TMC had to invest heavily in TMM to ensure its success (especially implementing the Toyota Production System for the first out of Japan), mainly in human infrastructure. Top and operations managers were flown out to the Tsutsumi plant in Japan, then hundreds of supervisors and team leaders were sent out of Tsutsumi to train the work force at the TMM plant. The method they employed for developing was persuasion, showing the real benefits of the TPS.

Production started remarkably well in 1988, and went on without major incident until the Camry model change in 1991, along with the wagon model of the Camry as well. Problems with the rear seat started decreasing the whole plants throughput which resulted in delays and more costs for the plant.

This case introduced three main concepts:

1. Just in Time/Toyota Production System

2. Root cause analysis (the five whys)

3. The link between production control and quality control

Toyota Production System

The Toyota Production System (TPS) is basically a pull system, driven by the needs of the following lines. It contrasts conventional push systems, which were driven by the output of preceding lines. This is mainly done through the kanban system (conveying information in and between processes on instruction cards). TPS operated to fix two problems: actual production always deviates from planned production, and unpredictable problems will always show up on the shop floor.

It started out as an adoption of the Ford conveyer system adapted to serve the small volume production of the Japanese market in the 1930’s. then went through a major improvement to become the world-known TPS in the 1950’s when the Just in Time concept was introduced inspired from the supermarket’s simple, efficient and timely manner.

The JIT concept is to produce only what is needed, only how much is needed, and only how when it was needed. All other production would be considered would be considered waste. It is supported by the jidoka concept which highlights production problems instantly and stop production accordingly, not allowing any problems to go through the line undetected or unfixed (building in quality). Jidoka regarded lost value that could have been added to the final product as unacceptable waste as well.

TPS mainly delivers the exact demand of cars at the exact time for demand based on predicted production, with capacity for deviations from that exact number and still producing just the exact amount and holding zero inventory, dramatically increasing efficiency.

Kaizen was the methodical thinking that TPS was trying to implant in the heads of its employees, which is the change for the better, always seeking continuous improvement.

Heijunka is the practice of balancing production to match demand sequence, in order not to strain suppliers with surges of peak demand, kept the production line in synch with the exact demand, and avoided bottlenecks in the assembly line.

All the above mentioned concepts ultimately come together in the following way; naturally, Jidoka complements JIT by always detecting problems (displaying them through Kanban) and fixing them immediately ensuring no pile-up of problems will occur. From this, Kaizen occurs, continuously improving the process, according to the problems so that they would not re-occur.

The Seat

TMM encountered product proliferation problems with defective seats due mainly to the company's deviation from its