Toyota Motor Manufacturing, U.S.A., Inc

Case - Toyota Motor Manufacturing, U.S.A., Inc

Best Practices:

1. Adopted Jidoka as a tool to aid immediate problem detection and facilitate visual control

It adopted the principle of Jidoka to make any problem instantly self-evident and stop producing whenever problems were detected it insisted on building in quality in production process and condemned any deviation from value addition as waste. However, this principle was extremely prone to shut downs and would be paralyzed without people capable of solving exposed problems promptly and completely Therefore, Toyota instilled “good thinking” in its employees through senior management coaching and internal training programs.

1. The use of Kanban Cards

Kan’ means visual and ‘Ban’ means       card, it refers to visual cards. They were used to reduce the idle time in the production process. It helped the teams at Toyota to standardize the flow of parts in their JIT approach so that they received the material only when required, this lead to better inventory management.

1. Heijunka Practice

It served two purposes. It evenly spread out the demand for parts which relieved suppliers of a surge of workload and facilitated their JIT production. Without Heijunka, a moon roof supplier would be at risk of order cancellation and inventory obsolescence. With Heijunka, a same supplier could stick to a uniform cycle time throughout the month without wasting inventory. Heijunka Practice also synchronized the assembly line by offsetting cars that required a particular operation against those operations that did not prevent any workstation becoming a bottleneck or remaining idle.

Bad Things:

1. Due to major economic consequences of Second World War, many customers in Japan were unable to afford cars. Also, the labor productivity of the country was just one eighth that of the USA. Hence, Toyota had to lower their costs dramatically.

1. Thinking that it might turn out to be very expensive to stop the entire line, the cars went through the rest of the assembly line as usual with the defective seat in it. This resulted in off-line accumulation of cars.

1. KFS is the only vendor of seats to TMM.

Instead of going for the Five Whys (like TMM followed most of the times) to find out the root cause of an issue, KFS is directly blamed for the defective seats. Additional time pressure from TMM’s side can further interrupt KFS’s production line and hence further deteriorate the quality.

Issues Identified:

1. Company’s run ratio dropped from 95% to 85%

Run ration measured the number of cars actually assembled in proportion to the number of cars that could have been assembled with no line stoppages.

This drop of 10% was equivalent to a shortfall of 45 cars per shift and hence had to be made up with overtime.

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