TOYOTA MOTOR MANUFACTURING, U.S.

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Case Analysis

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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.

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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.
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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

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PURCHASE DEPARTMENT SUGGESTIONS TO TOP LEVEL MANAGEMENT

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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
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 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.
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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.
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QUALITY CONTROL DEPARTMENT

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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

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MANUFACTURING AND INSTALLATION

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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.
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INVENTORY MANAGEMENT DEPARTMENT

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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.
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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. Powerpoint Templates

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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.

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SUPPLIERS HANDLING

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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.

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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.
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COMPILED BY AAMUKTA MURTI DEVENDRAN S.P GAURAV KHATRI PUSHPAM SHREE SIDDHARTH TRIPATHI TIMSI LUTHRA VANDANA MADHURI SINGH

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