TOYOTA MOTOR MANUFACTURING, USA.

, INC

By - Group 4

Background

1980s Japanese auto makers contemplated building cars in North America Trade imbalance Unclear whether cars produced outside Japan could live up with the hard-earned reputation of high quality at low cost In 1985 TMC unveiled its plan to open $800 million greenfield plant in kentucky It became a live experiment for others to watch

Contd

1988-TMM, USA started production on a 1300 acre site in Georgetown Annual capacity- 200,000 Toyota Camry Sedans In 1992, TMM was expected to supply 240,000 of all the new-Camrys Sales will be up 20% Returned an average 17% pretax profit margin on a sticker price averaging $18,500

Toyota Production System

Better cars for more people After second world war, since most people in Japan could not afford a car even at cost The countrys labor productivity was only one eighth of the US Toyotas challenge was to cut-cost Without scale economies American companies enjoyed it Toyota entirely needs new source of economies to satisfy customers with variety, quality and timeliness, all at a reasonable price

TPS Contd

TPS aimed at cost reduction through eliminating waste TPS provided two principles to facilitate the critical process JIT and JIDOKA- stop producing Parts pulled from downstream Heijunka- level loading Kaizencontinuous improvement Kanban- Digital boards Andon- signals HR infrastructure is symbolized by Good Thinking, Good Products Lets go and see it Five Whys

The Georgetown Ramp Up

First, TMC assigned to TMM the 1987 Camry that was already being mass-produced in its Tsutsumi plant in Japan Second, it replicated Tsutsumi line as closely as possible at TMM And third, it set a deliberately slow ramp up schedule Training people with a long trip to Tsutsumi

Operations

Two plants- Power train and assembly plant Power train plant supplied engines and axles to the assembly plant Assembly plant performed sheet-metal stamping, plastic molding, body welding, painting and assembly operations TPS was employed in all operations

Assembly

Were performed along 354 stations on a conveyer line Over 5 miles in length and consisting of several connected line segments: the trim line, chassis lines and final assembly lines The entire assembly line was buffered from the power train plant and the paint line plant with about half an hours production Operated on cycle time of 57 second

Contd

Assembly and part handling required 769 members Pain an average of $17 an hour and also premium for over time Every station on the assembly line embodied with jidoka and kaizen tools Green line, Red line and Yellow line Team member was behind at this yellow line or due any other problem pulls andon card: a rope running along the assembly line over the work area

Production control

Mission is feed necessary parts into TMM operations in right number and right mix There were 23 sedan and wagon models, 11 exterior colors, 29 interior variations, and 30 other options like a moonroof PC relied on extensive forecasting and planning To prepare for may production PC received Production Planning Order(PPO) for key specifications from sales company PPO was revised in February and, after one more update, was fixed Total Vehicle Order(TVO) by end of march During third week of April, the initial May weeks information was translated into final part orders for local suppliers as well as daily production sequence for TMM

Contd

Planning process reflected JIT principles in two ways, heijunka-balancing and kanban cards

Quality Control

Quality standards were set QC engineers were called on by assembly group leaders to help them solve assembly quality problems 20 patrol inspectors on each shift also observed problematic items Two approaches: instant feedback and proactive approach

Purchasing

Low cost suppliers

The Seat

A Camry seat consisted of several pieces: the front left and right assemblies, the bench and backrests, and the rear side bolsters Soft part prone to damage It costs $740 TMMs supplier was Kentucky Framed Seat(KFS) Operated through sequential pull

The Supplier

KFS had been a rare exception to Toyotas multi-vendor policy 10 days to change over its process and 10 weeks to build up to full capacity for the new models

Signs of Problems

Product proliferation Cross threading Hook Breakages Hook protruding

Solution

Back end recovery

Requisition

form Hand written Faxed Illegible Plastic Hook

Solution (contd.)

Middle Level Accommodation

Metal

to Plastic Rotation
Multi

skill Higher Production Avoid Boredom

Solution (contd.)

Front end prevention

Seat

supplier Plastic Hook