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Toyota Motor Manufacturing (TMM)

A case on Just-in-time and Total Quality Management

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TOYOTA - the Largest Car Manufacturer

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Toyota Camry Then (1992) and Now (2007)

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To Cincinnati

To Dallas

ToyotaGeorgetown

Plant

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Georgetown Plant

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Georgetown Plant www.toyotageorgetown.com

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History of the Plant

– Ground breaking, May 1986

– First Car, May 1988

– Fujio Cho named the second president, Dec 1988

– 1 millionth Camry, Oct 1993

– 2 millionth Camry, Apr 1997

– Camry #1 selling car in the US in 97, 98, 99, 00

– Gary Convis named fifth president, Apr 2001

– Camry #1 selling car in the US in 02, 03, 04, 05

– Sixth generation Camry starts, Feb 2006

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Overview of the Production Process ???? manufacturing, ????

????, used for panels, bumpers, connections, protections

????, shaping the steel coils into body parts– Uses ???? dies (analogous to cookie cutters)

???? of the body ????

????– Trim

» Heater, A/C, Wiring» Bumpers, Headliners

– Chassis, underbody work, engine marriage– Final line, air bags, instrument panels, seats

Final test, ????

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What is Doug Friesen’s problem?

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Doug Friesen’s problem

A ???? run ratio of ??%: Number assembled actually / Number could be assembled

Line is stopped due to defectives by pulling an andon cord– Too often or too rare?

????, defective car-seat combinations sent downstream Defectives are due to ???? rotation, product ????, ???? ????/????

design A substantial number of cars off-line with ???? seats or ???? seats.

– Some cars wait ???? days for seats in the ???? area although ???? commits to send seats in a single shift.

» Is the reordering of Ex.9 form readable?

» Cars served FIFO?

– What is the problem with the seats?

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What are the Seat Problems?

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Seat Problems

???? ???? ???? ????

Mor

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oble

ms

with th

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nt o

r bac

k se

at?

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A Test of Japanese

Andon Ikko-nagashi Heijunka Jidoka Kaizen Kanban Muda Poka-yoke Takotei-mochi Tsukurikomi

What is violated at TMM?

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A Test of Japanese

Ikko-nagashi: Lot size of one

Heijunka: Production smoothing to end up with a level plan

Jidoka: Do not pass the defects to downstream

Takotei-mochi: Worker flexibility

Tsukurikomi: Built-in quality inspection

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1. Line Stoppage

Setting of the stage: A worker pulls the andon cord, music starts, team leader comes.

TL: - What is the problem?

W: - ………….

TL: Decides how long the line should stop: 1 Cycle=?? seconds or more. If the problem is severe, TL calls the group leader.

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Continue to violate Jidoka?

Costs of line stoppage– Stopping for 1 cycle of 57 seconds

» Loss of revenue by one car

» Loss of profit

– Overtime can be used to recover

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Continue to violate Jidoka?

Costs of line– Stopping for 1 cycle of ?? seconds

» Loss of revenue by one car, $??,???

» Deduct costs of ??%

» Loss of profit of $?,???

– Overtime can be used to recover» Cost of ?? seconds of overtime ??*??*??/????=$?.???/worker

» How many workers stop and do overtime? 1 team, 1 group, assembly line, paint line, …, entire plant? Depends on the ????? inventory between work centers and the length

of the stoppage.– Ikko-nagashi couples work centers: Stopping one is stopping all.

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2. Crowding in the overflow area

Can you read the reorder form in Exhibit 9? Computerize the information flow between TMM and ???? ? What is the benefit of dedicating an ???? area specific to seat

problems?

Dealing with mistakes efficiently vs. Eliminating mistakes

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3. Assembly area Job rotation, a problem source or a fix?

– Is Takotei-mochi possible without rotation?

Hook, now made of ???? as opposed to ????– Personal experience: ???? interior front door handles in my 94 Corolla

– $50,000 to improve the hook design

Build a seat safety inventory to reduce mismatches?

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3. Assembly area Job rotation, a problem source or a fix?

– Empowering the ????, ???? work force– Boredom is a source of errors, Reasonable ???? improve productivity

Hook, now made of ???? as opposed to ????– $50,000 to improve the hook design

» Distribute the cost to cars» (1 broken hook per shift)*(2 shifts per day)*(1000 days for this Camry

generation)» Cost per car is $??, reasonable?» What if the hook problem continues after the redesign?» Investigate/respond to hook design change » Why does not Japanese plant experience the same problem?

Does TPS work better in Japan? Does TPS work only in Japanese culture?

Build a seat safety inventory to reduce mismatches

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4. Supplier Seat quality coming down

– At least for the new models

– Addition of Camry Wagon and more types of seats

Who is responsible for the seat defects» The supplier?

» The transporter?

» The TMM receiving?

– Sharing the responsibility to find the root cause of the seat defects

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5. Seat Mismatches: RFID as a potential fix

See Exhibit 6 for the layout

???? comes from main line ???? comes from a feeder line Both ???? and ???? are RFID tagged When the tags do not match, the workers are alerted This eliminates “some” errors

Implemented in conjunction with a seat supplier according to ChainLink Research (www.chainlinkresearch.com) webinar on January 10, 2007.

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How much of TPS is culture?How much of it is science?

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Toyota is worried of its culture being diluted with fast overseas growth

“… the hardest thing for Toyota’s new American employees to accept: those colored bar [performance] charts against a white bulletin board, in plain view for all to see.”

Latondra Newton, Toyota Employee in Erlanger, KYNew York Times Business Feb 15, 2007.

Aspiring Toyota factory leaders attend Toyota Technical Skills Academy (high school) in Toyota City, Japan. They study mechanical drawing/design . A separate institution, Toyota Institute, prepares executives for Toyota Way. The institute sends off its executives to offices around the world as missionaries.

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based on a trip on Nov 19, 2002

NUMMI

26utdallas.edu/~metin To San Jose

To Fremont

Railway TracksTo Oakland Harbor

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History/Products Late 70’s oil crisis GM closes Fremont, CA plant firing 6000 in 1982 Toyota approaches GM to set up Toyota production system at a GM plant,

United Auto Workers accepts the deal GM and Toyota put together $400M in 1984.

– GM is the landlord, it owns the infrastructure

– Toyota is the tenant Nummi = New United Motor Manufacturing, Inc is born in 1984 as the

unique example of a Toyota – GM joint venture Products: Toyota Corolla, Tacoma Trucks, Pontiac Vibe (Toyota bottom,

GM top) and Toyota Voltz (Toyota bottom, GM top, sold in Japan) , GM Prism until 13/12/01

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Workers

Nummi has about 4500 unionized workers Workers are under two types:

– Production, high school graduates

– Maintenance Workers work in teams of 4-6 Workers in a team rotate the tasks every 1-3 hours Team leader is responsible for the rotation. Team leader withdraws parts from the inventory (every 1-2 hours)

and provides the tools as necessary Workers make $17 per hour

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Capacity Nummi has a cycle time of

– 60 seconds for Corolla, 1 body– 82 seconds for Tacoma, 3 bodies

» only cabin is produced at Nummi, the bottom and the back are bought from suppliers

Nummi works in two shifts– I: 6:00-14:30, II: 16:30-1:00– Each shift has 1 hour lunch/dinner break– Starting the first shift at 6:00 workers

avoid heavy morning traffic– Two hours between shifts I and II is to

allow for overtime after the first shift when necessary

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Work Flow Stamping: Forming metal (side, back, front) panels with presses Body & Weld: Putting panels together Paint: Paint inspection is the current bottleneck

– Primer body paint applied by robots (chemically hazardous task)

– Door jambs painted manually Plastics: Making bumpers, inside panels

Assembly: Putting in tires, engine, seats, bumpers, harnessing. Cars , trucks on 2 km , 0.8 km conveyors

Cars contain Building manifest = BOM = Ingredients list at every step of these operations

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Just in time

Kaizen: continuous improvement Kanban: replenishment every 1-2 hours Jidoka: Assure 100% quality. Otherwise pull the Andon chord

– 1000 times per shift– 9% of line stops are longer than 30 seconds– Line stops longer than an hour once every month

Muda: Waste to be eliminated Genchi Genbutsu: Go to the source to learn and to solve the problems This Japanese terminology is all over the boards in the plant

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Creative Tool / Work Place Design

Die change at the stamping in 3 hours Tilted storage bins for ease of access Collapsing storage boxes when empty

– To reduce the empty box storage requirements in trucks returning to suppliers, say in Indiana

– These boxes save about $10M annually

– The worker who suggested the boxes earned several thousand points. 1 point = $1.

More info www.nummi.com

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To San Antonio by I-35

I-410 LoopI-35 & I-410 IntersectionSouthwest of San Antonio

Home of Tundra in San Antonio

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Toyota Way of Finishing a Class: - ?????? !

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Appendix

Where is your favorite brand manufactured?

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All of Toyota Plants in the North America

Toyota. Tijuana, MexicoTacoma

Toyota. Long BeachHino

Nummi: Toyota-GM. Freemont.Corolla, Tacoma, Pontiac Vibe

Toyota. San AntonioTundra

Toyota. Blue SpringsHighlander

Toyota. GeorgetownAvalon, Camry, Solara

Toyota. PrincetonTundra, Suquoia, Sienna

Toyota-Subaru. LaFayetteCamry

Toyota. CambridgeCorolla, Matrix, Lexus, Rav4

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All of Honda Plants in the North America

Honda. El Salto, MeAccord

Honda. LincolnOdyssey, Pilot

Honda. MarysvilleAccord, Acura

Honda. DecaturTBO in 2008

Honda. Alliston, Ca.Civic, Acura, Odyssey,

Pilot, Ridgeline

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All of Nissan Plants in the North America

Nissan. CantonQuest, Armada,

Titan, Infiniti, Altima

Nissan. SmyrnaFrontier, Xterra, Altima,

Maxima, Pathfinder

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All of Hyundai-Kia Plants in the North America

Hyundai. MontgomerySonata, Santa Fe

Kia. LaGrangeTBO in 2009

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All of Mercedes and BMW Plants in the North America

Mercedes. TuscaloosaM, R classes

BMW. SpartanburgZ4, X5, X6

M roadster, coupes

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All of Ford Plants in the North America

Ford. Hermosillo, Mex. Ford Fusion, Lincoln MKZ, Mercury Milan

Ford. Kansas CityEscape, Escape Hybrid,

Mazda Tribute, Mercury Mariner, F-150

Ford. Cuatitlan, Mex. F-150, 250, 350, 450, 550,Ikon

Ford. Saint PaulRanger, Mazda B series

Ford. LouisvilleF-250, F-550, Explorer,Mercury Mountaineer

Ford. ChicagoTaurus, Mercury Sable

Ford. Avon LakeFord E Series

Ford. Saint Thomas, Ca.Crown Victoria, Grand Marquis

Ford. Oakville, Ca.Edge, Lincoln MKX

Ford. WayneFocus, Expedition, Lincoln Navigator

Ford. Flat RockMustang, Mazda 6

Ford. DearbornF-150, Lincoln Mark LT

Ontario, Michigan, Illinois, Indiana, Ohio in Focus

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All of Chrysler Plants in the North America

Chrysler. Toluca, Mex.Chrysler PT Cruise, Dodge Journey

Ontario, Michigan, Illinois, Indiana, Ohio in Focus

Chrysler. Saltillo, Mex.Dodge Ram

Chrysler. NewarkDodge Durango, Chrysler Aspen

Will close in 2009

Chrysler. Fenton-SouthGrand Voyager, Grand Caravan, Cargo Van

Chrysler. Fenton-NorthDodge Ram

Chrysler. BelvidereDodge Caliber, Jeep

Compass, Jeep PatriotChrysler. ToledoJeep Liberty, Dodge Nitro

Chrysler. Brampton, CaChrysler 300,

Dodge Challenger, Dodge Charger

Chrysler. Windsor, CaDodge Grand Caravan, Chrysler Town

Chrysler. Detroit-Jefferson NorthJeep Grand Cherokee and Commander

Chrysler. Detroit-Conner Ave.Dodge Viper, SRT 10 Roadster

Chrysler. WarrenDodge Ram, Dakota, Mitsubishi Raider

Chrysler. Sterling HeightsDodge Avenger, Chrysler Sebring

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All of GM Plants in the North America

GM. Ramos Arizpe, Mex.Pontiac Aztek, Chevy Cavalier, Chevrolet

Checy, Pontiac Sunfire, Buick Rendezvous

Ontario, Michigan, Illinois, Indiana, Ohio in Focus

GM. Silao, Mex.Chevrolet Suburban, Chevrolet Avalanche,

GMC Yukon, Cadillac Escalade

GM. Toluca, Mex.Chevrolet Kodiak Truck

Stopping in 2008

GM. ArlingtonChevy Tahoe,

Suburban, GMC Yukon,

Cadillac Escalade

GM. ShreveportChevy Colorado, GMC Canyon, Isuzu brands, Hummer H3

GM. FairfaxChevy Malibu, Malibu Maxx, Saturn Aura

GM. WentzvilleChevy Express, GMC Savana

GM. DoravilleChevy Uplander, Pontiac Montana

GM. Spring HillSaturn Ion and Vue

Currently down

GM. Bowling GreenCadillac XLR, Chevy Corvette

GM. WilmingtonSaturn L series, Pontiac Solstice

GM. LordstownChevy Cobalt, Pontiac

Pursuit, G4, G5

GM. MoraineChevy Trailblazer, GMC

Envoy, Oldsmobile Bravada, Isuzu Ascender, Saab 9-7X

Will stop in 2010

GM. Fort WayneChevy Silverado,

GMC Sierra

GM. JanisvilleChevy Tahoe,

Suburban, GMC YukonWill stop in 2010

GM. Oshawa, CaChevy Impala, Buick Allure,

Chevy Silverado, GMC Sierra.Trucks will stop in 2009. GM. Lansing-Grand River

Cadillac E-SRX

GM. Lansing-Delta TownshipBuick Enclave, Saturn Outlook, GMC Acadia

GM. FlintGMC Sierra, Chevy Silverado, Chevy - GMC medium trucks.

GM. PontiacChevy Silverado, GMC Sierra

GM. DetroitBuick Lucerne, Cadillac DTS

GM. OrionPontiac G6,

Chevrolet Malibu