Toyota Motors Manufacturing (TMM) faces increasing problems with its seat supply.

TMMs
single seat supplier, Kentucky Framed Seat (KFS), is responsible for the majority of the problems with
material flaws and missing parts as the major encountered defects.
These problems are increasingly occurring with an increase in varieties of and demand for the seats.
Toyota currently addresses these problems offline; however, this is a deviation from the policies and
procedures under the Toyota Production System (TPS). Now, as TMM ramps up for the production of
the Camry Wagon, it must address the seat issue before seriously impacting production performance.
THIS IS CAUSED BY THREE FACTORS

1) Seats need to match each particular car, therefore stock parts cannot be used

2) The supplier process operates under Just In Time (JIT)

3) KFS cannot readily supply replacements for defective seats

PURCHASE DEPARTMENT SUGGESTIONS TO TOP LEVEL MANAGEMENT

Q1.BUYING QUALITY MATERIAL AT LOW PRICES:

SOLUTION:

Purchase Department has suggested following ways to procure material at low price
and with best quality:

Downward Integration: As Toyota is huge industry and requires large no of stock so if it can
go for downward integration it would be a good idea as than it can very well control the
inventory for JIT and it will also have a total quality control and will save the cost.

Quality Control : Quality check Teams can be formed which would work in close collaboration
with suppliers so to check on quality of materials supplied by them and suggest them measures
to overcome any defect in their manufacturing process

Build a Supplier Chain Development Program: This program would help in providing
suppliers training and development for their existing staff and manufacturing process by
providing them technological aid and at the same time management expertise.
It can include development of techniques like

1. Six Sigma

2. JIT

3. KAIZEN

All this will reduce their cost of production which in turn will help Toyota to acquire raw materials
and low price without actually lowering profit margin of suppliers and gaining their confidence.
Problem 2: Providing Data having Cost of Production to TOP LEVEL MANAGEMENT
Solution: This would be tough deal to crack as nobody will like to share their cost of production
with other company but this can be done by entering into contract with them to share their cost of
production so that without lowering their profit margin we can help them to reduce their cost of
production and providing them aid in management as well as production process so that they can
work up to their full efficiency.
QUALITY CONTROL DEPARTMENT
1.Procurement schedule should match with production schedule.
2. Seat material would be provided at the time of procurement of seats.
3. When the cars would be finally made, a quality check would be done.
4 . Direct link between production and operation department.
5. Scheduling process= production schedule
MANUFACTURING AND INSTALLATION
Q. How do we reduce the manufacturing and installation time?
Ans. The manufacturing and installation time can be reduced by following the following options:
1. As Toyota can use combined seat installation technique, as they have made two separate
systems in a divided order, in order to install two seats, so these systems can be combined so that
the seats are installed in a car simultaneously, and the time would be saved.
2. We can use a better robot, which is much efficient and quick. As when the robot will be quick
enough to cope up with faster production , painting system would receive the car sooner, thereby
increasing the manufacturing speed.
INVENTORY MANAGEMENT DEPARTMENT
Q1-Provide all information on Kanban cards for inventory movement?
Ans.- A Kanban Card include a part code number, its batch size, its delivery address and other
related information. Every part container sitting on the flow rack along the assembly line held one

batch & had its own card. The card would physically travel between this part -use point & the
supplier, whether in house or outside to signal the actual parts needed. When the supplier receive
the Kanban, it began making that part in the stated quantity, & shipped a container full of that part
to the proper address on the assembly line. Assembly group leaders adjust the number of
circulating kanbans for each part within the set range to avoid having team runs out of every parts.
Kanban cards are used by PC department to determine appropriate kanban range & to feed
information back to parts ordering for even better inventory control.
Q2- Feed necessary parts into TMM operating that are needed and write the no. of cars
that could be delivered to sale with JUST IN TIME.
Ans.- To feed necessary parts into TMM operating PC relied on the extensive forecasting and
planning that TMC performed for worldwide markets. To prepare for May production, for example,
PC first received, in January, a Production Planning Order (PPO) for key specifications from the sales
company. This PPO was revised in February and, after one more update, was fixed as a Total
Vehicle Order (TVO) by the end of March. While total volume was fixed in the late March, the PPO
was generally accurate only within "20%" of the TVO for most specification categories at that
point. Next, the TVO was broken down weekly: by the end of the second week of April it was done
for the first week of May. During the third week of April, the initial May week's information was
translated into final part orders for local suppliers as well as a daily production sequence for TMM
operations. This procedure left one full week for production preparation.
The number of cars would call for 500 base models and 500 luxury models every single day and
also demand that a base model and a luxury model be made alternately.
Q3- Need to balance out the total order in daily production sequence Hijunka practice?
Ans.- By balancing of the total order in daily production sequence Hijunka practice, the same
supplier could stick to a uniform cycle time throughout the month without creating the waste of
inventory. Similarly, offsetting cars that required a particular operation against those that did not
prevented any particular work station from becoming a severe bottleneck or remaining
unreasonably idle. Hijunka also synchronized the assembly line with the ultimate sales of the cars.
SUPPLIERS HANDLING
CONTRACT BETWEEN TOYOTA AND COMPONENT SUPPLIERS
Based on the principle of long-term stable transaction, Toyota makes an unique basic control of
component transaction with a component supplier. On this contract Toyota confirms to promote
long lasting prosperity for both parties and an ideal quality assurance for customers. Hoping that,
perfect quality control is carried but by every component manufacturer, Toyota includes in the
contract the basic rules of quality control, the steps to be followed when defective goods come out
and etc.
UPBRINGING OF COMPONENT SUPPLIERS

In order to develop the component suppliers Toyota assists them in improving management as
well as quality control. Various means are available for assisting suppliers in improving systems
of management such as:

Toyota quality Control Reward

Guidance of Toyota Production system (Kanban System)

Mutual development by suppliers organization and etc.

1. 2. Agenda Current Scenario Problems Faced Analysis Suggestions and recommendations Risks
and contingencies

2. 3. Current Scenario Toyota Motors Manufacturing (TMM) faces increasing problems with its seat supply.
Kentucky Framed Seat (KFS), is a single seat supplier for TMM. KFS is responsible for the material flaws and
missing parts as the major encountered defects. These problems are increasingly occurring with an increase in
varieties and demand for the seats.
3. 4. Problems Faced Product proliferation problems with defective seats. Companys deviation from its normal
production plan and lack of a recovery system. Run ratio dropped from 95% to 85%. This means 45 less cars
were being produced per shift. This translated in overtime of workers. Too many cars needed off-line operations
of one type or the another before they could go on shipping.
4. 5. Questions Raised Will the sales company get cars on time as promised? What does it mean to implement JIT
and Jidoka principles to this situation? Is TMM handling seat defects correctly on the line? Is the current routine
for handling seat-defect cars really a legitimate exception to TPS, or could it be a dangerous deviation from TPS?
Is there a way to kaizen TMMs off-line routine?
5. 6. Analysis
6. 7. The Problem Rise in number of Camrys with defective seats, leading to a reduced run ratio at the TMM
Georgetown Plant.
7. 8. On April 27th the run ratio was down 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 $16,000 per shift.
This translates to around $8.4 Million per year considering two shifts and a 5-day workweek.
8. 9. Stations 353 Employees 769 Wage/Hour $ 17.00 Overtime $ 25.50 Cycle Time 1.05 Cars/Min Shift Length 525
Minutes 'Productive' Minutes 450 Run Ratio 100% 473 95% 449 85% 402 'Lost' Cars Per Shift (95% to 85%) 47
Cost per Hour of Production Overtime $ 19,610 Time Required to Produce Add'l Cars 50 Minutes Cost to Produce
Additional Cars $ 16,215
9. 10. The Reason Product proliferation From 3 styles x 4 colors, to 36 different seat styles. Seats need to
match each particular car, therefore stock parts cannot be used. Sequential pull with a 57 sec line cycle time
means response time for KFS to come up with the next seat is minimal Greater variety of styles and heijunka
concept means more frequent changes in seat line setup Suppliers operate under JIT
10. 11. The Root Cause TMM did not internalize the TPS philosophy. It only emulated the systems from Toyota,
Japan. KFS balanced capacity to meet TMM Production. It did not have the TPS implementation to respond to
the product proliferation. It only learnt system from the Japanese seat suppliers, not the underlying philosophy.
Not allowing the seat problem to be solved in real time but just tagging it for storage in the rework area is a
gross violation of the jidoka concept.
11. 12. The Snowballing Mistakes thinking that it is too expensive to stop the line. Andon pulls dont stop the line at
once. 353 workstations would slow down to a halt depending upon time taken for rectification. Illegible re-order
form instead of a proper kanban system might be leading to slower turnaround from KFS Additional time
pressure on KFS would further interrupt their production line, deteriorating quality further KFS is blamed for the
seat defects without going for the Five Whys to determine the root cause of the problem KFS being treated as a
supplier as opposed to the partnership model JIT actually professes
12. 13. Suggestions Given that 88% of seat defects is from KFS, TMM needs to participate in KFSs QC Process,
perhaps by placing its own personnel Defective items need to be fixed on assembly line and not postponed
Design review needs to be done to see if so many different seat styles are actually necessary Heijunka system
may be avoided given the wide variety. This would ensure that a replacement is at hand within 1 minute A drumbuffer-rope model of intimating KFS of replacement stock as soon as it is discovered needs to be installed. A
contingency kanban may be designed.
13. 14. Suggestions (Contd.) Seat spec recvd at KFS Seat setup as per spec on KFS Assy Line Seat inspected by
TMM QC person at KFS Seat despatched to TMM Seat recvd at TMM (different dock for replacement) Seat carried
above TMM Assy Line Seat installed in the car Seat checked for defect during installation If seat found defective,
andon cord pulled If seat needs replacement, a kanban sent to KFS Car continues with other processes Seat is rechecked. Seat replaced if replacement is indicated Car Assy completed Finished car rolls out of Assy line Legend
Normal flow Flow for replacement seats

14. 15. Implementation TMM should immediately implement the following measures: Assign an employee to
manage seat correction and replacement and implement a one-shift requirement. Designated area should be
available for the vehicles with the seat problems. Problems should be resolved by notifying the suppliers of
defective seats. Actions should be introduced to revise current procedures in response to problems.
15. 16. Recommendations TMM should consider the following long-term solutions:- Close relationship should be
maintained between KFS, TMM and TMC to over come barriers. TPS integration will benefit the Toyotas
supplier network. TMM should recommend a reduction in the variety of seats with TMC.
16. 17. Risks and Contingencies TMC might not feel that the variety of seats could be reduced. KFS might not be
able to react to the increased demand KFS could refuse to adopt TMM and TPS procedures

Toyota Case Study

1. As Doug Friesen, what would you do to address the problem? Where would you focus your attention and
solution efforts?
The major problem that Doug, manager of assembly, needs to address is of Seat Problems. Due to seat
problems, production level is decreasing and which resultant leads to increase in overtime works, leadtime and off-time vehicle inventory.
The major problem that is observed is improper seat quality management in KSF. Most of the seat
problems were occurring because of this mismanagement like, wrong, missing and broken parts,
wrinkles and missing bolster.
Also, KSF inspection of seats before shipping is not proper. There need to check the method followed
by KFS while inspection of seats because several of defective seats are being send as fit. May be by
providing more training to the worker this problem could be solved.
Also, there was ineffective feedback system, due to which Doug was not able to reach the specific
solution for the seat problems. So, by properly sharing and discussing all the feedbacks may gave best
optimum solution to the problem.

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

The options for the seat problem are: 1. Fixing of bolts and hooks in a proper manner As the members of the teams were trying to fix the bolt in the
front seats they tend to shot the bolt at a wrong angle because of which cross threading happens. If they can
work for 30 sec. more on it then they will be able to solve this problem at that particular moment.
2. Company was following JIT method because of which seats reaches at TMM on time but because of this there
is no time left for solving any problem related to the quality of the seat at the time of installation.
3. Back Up for seats As seats are the delicate object to be installed in a car so any mishandling can cause
damage to it very easily which can cause problem while installation to stop this kind of problems they must
have a backup of the seats in their warehouse.
4. Use of plastic hooks as company was using metal hook which can cause body of the consumer some damage
to reduce that company can use plastic hooks which will do the work as well as will no harm the costumers to.
3. Where does the current routine for handling seats deviated from TPS?
Toyota Production system was based on the principles of Just In Time (JIT) and JIDOKA which stated that production
should be stopped when problems are detected.

a) Deviations from JIDOKA As it implied that production should be stopped when problems surfaced but as in the
case of defective seat problem production was not stopped and car passed through assembly line with defective seats
in it. Car was taken to Code 1 clinic area to detect the problem and then to overflow parking area for seat replacement.
b) Deviations from JIT principle As it stated that produce what was needed and when it was needed. So it aimed at
reduction of waste and inventory but in routine for handling of defective seats cars were moved to overflow parking
area where seat replacement was done so it resulted in increase in inventory as well as waste. Secondly seats with no
defects were not produced at a time when they were needed.
These deviations occurred because the production people knew that stopping production was too expensive and it was
possible to finish the car without seats in it.
4. What is the real problem facing Doug Friesen?
The production of cars was getting low or shortfall of 45 cars per shift. The main problem was regarding the car
seats.Then Friesen find the reasons behind the problem and they found that the designing of small part used in the
assembly of the seat was the main problem.
The material of the hook used in earlier models was metal in the new model it is a fabric material whereas the
assembly line was designed for metal hook as a result the hook is even damaged at times in the process of assembling
the seat as a result the time is delayed and is even an issue of quality control.