1. As Doug Friesen, what would you do to address the seat problem?

Where would you

focus your attention and solution efforts?
As Dough Friesen my approach towards the problem would be to determine another method
to deal with the defective seats as the current methodology does not follow the TPS, the
standard that Toyota developed to deal with such kind of situation. To start with the process
the first step should be to ask the correct Why? i.e.
 Why TMM is facing the problem: Because of the continuous supply of defective or
different seats.
 Why KFS is allowing the defective parts to reach TMM: Because of the poor
quality control systems at KFS.
 Why the overflow parking area is stocked with the cars: Because of the wrong seat
assemblies.
 Why KFS is delivering wrong assemblies of the seat: Because of the
communication gap between the firms because of the hand written supplier’s
receipt.
 Why the hook is broking off: Because of the wrong working angle used by the
technician.
As the solution of the major problem lies among these smaller problems, the focus should be
towards finding the solutions of these smaller issues. We should focus to find out how we can
reduce the number of defective seats arriving at TMM and minimising the frequency of hook
break off.

2. What options exist? What would you recommend? Why?

Options

Change the Widen the pool Insource Seat

Vendor of suppliers Production

Recommendation:
TMM should go with second option of widening the pool of suppliers as KFS is the oldest
supplier of TMM and it knows the requirement of the firm. Also widening the pool of
suppliers will help in increasing the quality of the product and may also help in reducing the
marginal cost. While on the other hand, insourcing the production of the seat will result in
increasing the investment of the firm. To maintain the quality of the seats and to resolve the
issue at hand certain recommendations can be made such as:
 Since the knowledge that KFS has regarding the quality check and its other
operations is mostly based on the learnings from the previous TMC Japanese
vendors, provide them with a thorough understanding of the TPS system and quality
control concepts so that they can be on the same level of operation as TMM is.
  Appoint a staff to examine the seats at the unloading bay so that problems can be
detected at an early stage and resolved in a fast manner.
 Create an automated system of generating the supplier’s receipt so that the
communication gap can be removed.
 Create a cross functional team constituting of members from KFS and TMM to find
out a way to fix the issues related to the seats on the line. This will help in
decreasing the inventory at the overflow parking lot.
 Provide training for the employees so as to lower the frequency of broking off of
the Hooks.
 Varieties of seats to be installed should be limited to a certain fixed amount.

3. Where, if at all does the current routine for handling defective seats deviate from the
principles of Toyota Production System?
Toyota Production System (TPS) is based on reducing cost through the elimination of waste.
To achieve this objective TPS relied on two aspects that are Just-In-Time and Jidoka. JIT
means getting the part as and when required while Jidoka refers to stopping the production
process until and unless the solution for the problem is derived.
TMM deviated from the TPS at the assembly stage of the seats, rather than dealing with the
issue at hand they continued the operations and left the issue to be resolved at a later stage.
This led to another problem of having a huge inventory of defective vehicles at overflow
parking area.
This deviation happened because of the following three reasons:
 The supplier process operates under Just In Time (JIT), leaving no or very low
stock of the seats.
 Since the seats are of various types the stocks if available can’t be frequently used.
 Stopping the line until a replacement seat is available is not an option due to the
massive resulting productivity losses.
This explains the stage at which the current routine for handling defective seats deviate from
the principles of TPS and the reasons for the deviation.

4. What is the real problem facing Dough Friesen?

On April 27th the run ratio was down from 95% to a damaging 85%. The calculations below
show that the decrease in per-shift production due to this is 47 cars. From exhibit 7 its clear
that most of these are because of the defective seats. Producing the missing cars to fulfil the
market demand will cost TMM an excess of $16,000 per shift. This means that for long term,
it’ll cost around $8.4 Million per year considering two shifts and a 5-day workweek.
Calculations are shown in the table below.
This is the real problem faced by the Dough Friesen that if he would not be able to fix the
issue with the seats the loss incurred by the firm will be very high. The reason behind this
chaos was simple, the firm was not able to implement the principle of TPS in an effective
manner. And if TMM is not able to implement these strategies in house than how can they
expect their suppliers to do so.
Stations 353
Employee 769
Wages/Hr $17.00
Overtime $25.50
Cycle Time 1.05 Cars/Min
Shift Length 525 Min
Productive Minutes 450 Min
Run Ratio
100% 473
95% 449
85% 402
Lost Cars per shift 47
Time Required to Produce addition cars $19,610
Cost Per hour of production overtime 50 Min
Cost to produce additional cars $16,215
Total cost incurred in a year $ 8400000