PREPARED BY

DAMINI VARSHNEY
PIYUSHA BHARTI
JITENDER SINGH PARIHAR
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1. Toyota’s background
2. Toyota’s Motto
3. Toyota’s principles – operations
4. Problem
5. Analysis
6. Solutions
7. Recommendations

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 TMM in Georgetown - annual
Toyota building cars in
capacity of 200,000 Toyota
North America
Camry sedan

1980s 1988

1985 1992

TMC plan to open TMM was expected to

$800m plant in Kentucky supply >20% since fall
1991
 Flawless Quality

Perfect Timing

Affordable Price

Diverse Preferences
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 • Aiding immediate problem detection
Jidoka • Facilitate visual control

Andon • Signal highlighting problem

Kaizen • Change for better

JIT (Just-in-time) • Producing only what, how and when are needed

Heijunka • Production smoothing and leveling

Kanban Card • Signal board – ordering parts

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 Jidoka, Andon,
01 Assembly ● Production line
Kaizen

● Mission: to feed necessary parts

Product into operation Heijunka,
02 ● Tasks: coordination with TMC, Kanban
Control sales company & local suppliers
● Provide instant feedback to direct
Quality operations
Jidoka, Andon
03 ● Proactively prevent problems in
Control the 1st place

● Manage cost over the long haul

04 Purchasing ● Estimate cost using cost data Kaizen
shared by the suppliers
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 Run-ratio Old Camry model
decreases
95% to
• 3 styles and 4 colors
85%

1992 Camry model

• 5 styles and 3 colors

Product
Proliferation Mar. 1992 - Launch Camry wagon

(increase 12 kinds of For North America: add 8 seat variations

seat to over 30) For Europe: add another 10 seat
High level of Defective cars
are left variations
off-line unattended for
inventory For Japan & the Middle East: add another
a long time 18 seat variations

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Sharp increase of product (seat set) variations

* Sole seat supplier: Kentucky Frame Seat

* Inefficient supplier’s quality control

* Incidents were not closely followed up

* QC detected the issue but didn’t report timely

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 On April 27th, 1992 – Doug Friesen, Manager of Assembly, noticed that
the Run Ratio has declined from 95% to a damaging 85% .
 Decrease in per-shift production is close to 50 cars.
 Producing the missing cars via overtime capacity will cost TMM in excess
of $16000 per shift.
 This translates to around $8.4 Million per year considering two shifts and a
5 –day workweek.

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 In, 1992 they have launched a new model of their popular car Camry. The old
model seat had three styles and four colours; the 1992 new model offered three
seat colours and had five styles.
 In March 1992, TMM launched the Camry Wagons and became the sole source
of these cars first time for Toyota worldwide.
 The wagon models destined for North America added eight seat variations.
Wagons for Europe added another ten variations and on the horizon was export
to Japan and the Middle East, and this would add still another18 seat variations.
 It is noticed that the cause of the problem was product proliferation at KFS, by
addition of new styles and colours.

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 Old Camry: 3 styles x 4 colors = 12 variations of seats
 New Camry: 3 colors x 5 styles = 15 variations of seats
 Camry Wagon added the below variations:
 Already introduced → North America – 8 variations → Europe – 10 variations
 Planned for Japan and the Middle East – 18 variations

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 The addition of the new variations could be the main reason for the defects in the seats manufactured by
KFS.
 During the analysis of the issue, the following things were observed as well:
• The majority of the problems in the seat were in the Rear Seats
• Total problems in the seat were approx 130 for April. The top issues were:
 1) Material Fault [KFS] – 44 (34%) 2) Missing Part [KFS] – 31 (31%) 3) Seat Bolster [TMM] – 14 (10.8%)

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 the third problem was in to the bolster hook was changed from metal to plastic in the design
of the new Camry. The team was facing problem while connecting the bolster hook with the
body – the hook sometimes broke off probably due to the sharp edge it was brittle.
 Moreover, it was learned from QC that:

a) Modifying the tooling for the hook would cost KFS about $50,000
b) Tsutsumi, their other plant, which used the identical engineering drawing for the part, had not
reported the problem
c) Hook breakage frequency had gone down from about seven occurrences per shift at the new
model introduction to one per shift in April.
 TMM team was not fitting the rear seat in the right way or the quality of the seat from KFS
was not up to the mark - as there were no precise standards in this area

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 In such a situation, what does it mean to implement JIT and jidoka? In this situation, if we
implement JIT and jidoka, then we need to stop the production line and wait for a
replacement for the seat. This wait time can incur high costs, and to handle this wait time we
will have to maintain inventory. This will again be an exception to JIT.

 In such a situation, if we halt the production line for a replacement seat when KFS is not
entirely ready to support, then the impact on our finances will be much more than $11
million.

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1. Deploy TMM’s QA team at KFS site to reduce the number of faulty seats sent to the factory.
2. The “Five Why” Analysis of the seat issue was probably not performed and should be completed immediately.
3. TMM adopted the TPS philosophy and implemented it in KFS. The case mentions that entities sometimes don’t
wholly imbibe the TPS Culture of JIT and jidoka, but try to copy whatever fits.KFS needs support from TMM
and Toyota to help implement TPS philosophy completely, as currently, KFS is not able to handle the issues
arising from the product proliferation.
4. The Seat Reordering Form (exhibit 9) is not clear and neat. Probably that’s the reason that the replacement seats
had not arrived. They should follow a Kanban card process for reordering of defective inventory like seats.
These cards can be sent to the supplier, KFS, for quick replacement.
5. There are two pieces of evidence that point highly towards the skilling and learning needs of the labour to fix
the seat without any breakage of bolster.
6. The design for 1992 Camry had also modified the hook material from metal to plastic, so it was more prone to
breaking if installed improperly. So, to avoid hook breakage issues while fixing the seat, TMM should improve
the learning and should not hamper the learning curve of the employees working there (disrupted by the rotation
of employees). Also, the Tsutsumi staff can conduct training for TMM, because the staff in the Tsutsumi plant
are not facing any issues of bolster breakage while affixing rear seat.

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THANK YOU

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