Toyota Tps Case Study

In the 1980’s Japanese automakers Toyota was trying to decide if they should open a vehicle manufacturing plant in Northern America. Due to the trade imbalances, political pressure, and the rapidly rising yen, Toyota was unsure if they could keep their hard-earned reputation of high quality at a low cost that the automaker was known for. In 1985, Toyota Motor Corporation decided to open a new $800 million-dollar plant in Kentucky. In July of 1988, the Toyota Motor Manufacturing (TMM) opened the 1,300-acre site in Georgetown, KY, and the plant had a 200,000-annual capacity for the Camry sedan model, and in 1992 the plant was estimated to have produced 240,00 new body style of Toyota Camrys. The manufacturer is well known for its Toyota Production System (TPS), which is world renounced and often the topic of discussions in all business education.

There were two fundamental key principles of TPS. The first was the concept of Just-in-time (JIT) production. The basis of this concept was simple, produce only what is needed, only how much is needed, and only when it is needed. Anything outside of what is required is considered waste. The second principle is Jidoka; essentially this is the instant identification of any production problems, self-evident and stops production whenever a problem is detected. The Jidoka process worked on building in quality to the production process and condemned any deviation from value-addition as waste. This TPS business model did not stop Toyota from having problems of their own in the new Kentucky Plant, in 1992 the assembly line faced a problem with the Camry Seats.

The first issue I notice in reading the case study is that the production plan was ignored. While the case study does not give enough information to determine who authorized the ignoring of the production plan, this is a factor that could be of concern Since Toyota prides itself on following the concepts behind its TMP model. As the shell of the Camry exited the paint line a small radio frequency identification (RFID), the tag would send manifest information to TMM and Toyota sole supplier Kentucky Framed Seat (KFS), in real time. As stated in the case study, “With this system, something truly magical happened,” Every 57 seconds as the vehicle passed through one of the final assembly work stations, a set of seats matching the model appeared next to the Camry they were to go in. A big problem in this situation was the information flow had already been developed and delivered to both KFS and TMM, but the information of the vehicle recirculating for paint was not told to TMM management or KFS. This could be why the third highest occurrences of defects in Exhibit 8 is “Wrong part.”

If I were Doug Friesen, I would ensure that there was a system in place for Camry’s that needed to be repainted. I would have an andon pull as the car exited the paint line and train employees to notify a supervisor so that the flow of information was relayed back to KFS so that they knew to either pull those seats. Another process could be if TMM did not want to slow the flow of parts they should make KFS use Kanban with the VIN and notating that they belonged to a vehicle in repainting status etc., as of right now KFS is doing a Kanban “lot of one.” In exhibit 9 TMM has a kanban number, I think if KFS switched to the same method the mismatched seats wouldn’t be an issue. A holding area should be established at either KFS, or the TMM delivery/load dock size should be increased or a holding area for seats waiting for their vehicle to be completed with paint. Another thing would be to have KFS to have a holding area, for situations like the repainting or doing a kaizen event to see how either proposed scenario could benefit both for TMP’s Just-in-time (JIT), maybe KFS can hold a supermarket for repainted cars and when they are ready send out a shipment and keep the clinic at eight cars max. In my opinion, this violates JIT, the Kanban, and Andon of Toyota’s TPM.