Toyota Motor Manufacturing Case Study

Main problem:Toyota Motor Manufacturing, U.S.A. (TMM) is deviating from the standard assembly line principle of jidoka in an attempt to avoid expenses incurred from stopping the production line for seat quality defects. This deviation has contributed to the inability to identify the root cause of the problem, which has led to decreased run ratios on the line and an excess of defective automobiles in the overflow lot for multiple days. If this problem isn’t fixed quickly, an increased amount of waste will continue to be incurred and customer value will be threatened. Analysis:

Friesen is truly struggling to find a way to “have his cake and eat it too”. Friesen is passionate about TPS ways of achieving lean manufacturing by staying focused on achieving cost reduction by thoroughly eliminating waste. He knows that just in time (JIT) production is implemented to insure plants produce only what is needed, only how much is needed, and only when it is needed.

He has been thoroughly trained in jidoka principles, understanding processes are put in place to make any production problems instantly self-evident through visual deviations from normal conditions. He also understands the value of the andon pull, and that it states the andon card is not replaced until the problem is fixed – often resulting in a stop of the line.

However, he felt this problem was different, and therefore an alternate process was acceptable. He believed it was possible to deviate from some of the core jidoda principles by fixing the quality problem off the production line, and within the quality control (QC) team. He believed this would allow him to save money by not having idle machines. Even after all the alarming red flags in front of him that indicate this deviation might not be working, Friesen still wonders if the problem can be fixed off the line.

There are a few alternatives for Friesen to take at this point: 1.Continue the deviation to the production process, but start a full investigation into uncovering what the true root causes of the seat problems are, utilizing key personnel from assembly, production control, quality control and the supplier (KFS). 2.Immediately cease the deviation to production process and go back to jidoka and the andon pull standards, which would mean stopping production when defective seats are encountered. 3.Go back to the traditional production process, but have in stock a small ‘buffer’ of seat inventory to call on when defective seats are encountered on the line.

So let’s evaluate these alternatives. By implementing the first solution, to continue the attempt to solve the problem off the line, the benefits are no stoppage to the production process, and therefore, a potential cost savings. However, this benefit is short term. The downsides are numerous and most likely more costly in the long run. Until the problem is solved run ratios will continue to be low, defects will be high, and the overflow lot will continue to grow – excessive waste will continue to happen. In addition, customer value will continue to be threatened.

Also, by stopping the production line time and time again to deal with the defective seat, the flow of the production line will still be disrupted. And, since this alternative might not utilize those employees that are closest to the production line, there is a large risk that the root cause of the problem will never be uncovered. TPS philosophy stands by the fact that the employees are their greatest asset, as they have been trained to get the root of the problem.

By implementing the second solution, going back to the standard jidoka process, the downside will be a short term loss of productivity on the line, as this will most likely result in a complete stoppage of the line as seat replacement parts might not be quick to come by. In the short term run ratios will still be low (and even potentially lower), and defective cars will continue to sit on the overflow lot. However, in the long term the benefits are many, as by sticking by these tried and true jidoka processes, the root cause of the problem may have a better chance of being uncovered.

The third solution may sound like a compromise between the first two alternatives, and therefore potentially enticing to consider. However, in the end the reality is that most likely the plant doesn’t have the capacity to take on the type of buffer inventory it would need to handle all of the product lines (assuming they follow the Heijunka system) and it would just add to the current waste problem by having excess inventory, violating key Just In Time (JIT) principles. Recommendation:

Implement alternative number two: Immediately cease the deviation to production process and go back to jidoka and the andon pull standards, which would mean stopping production when defective seats are encountered.

Although it might seem like a drastic and potentially costly solution, the benefits outweigh the downsides. The TPS philosophy is a proven system, and to deviate from it can prove disastrous. The Toyota Way is implemented through a solid foundation of key principles (see Appendix A). At the base of these principles is the philosophy of making management decisions with a long term view. On the surface it might seem faster to move the defective seats through the line and solve the problem later, but in the end this is actually prolonging the ability to solve the problem. The second level of the foundation is the processes.

By moving the problem to the quality control area, they are not keeping the information flow close to the physical flow of parts. Even though on the surface it may seem to decrease waste by keeping the line moving, in the long term more waste is being created by creating re-work (e.g. installing twice, creating excess movement, over-time costs, allowing for defects, unutilized employee creativity, and waiting). The third level of the foundation is the people. This includes respecting, challenging and growing your employees and suppliers.

By making the decision to fix the problem off the line, this third foundation is being violated by not utilizing employee and supplier intelligence and knowledge of the issue to help find the root cause and solution at the time the problem is encountered. In addition, the deviation to the andon process is undermining the process, creating confusion and potentially allowing employees to question all jidoka processes. In a direct quote from Doug Friesen, attesting to the “traditional” andon card pull system, “every team member is focused on building quality in through andon pull. Leadership means standing by people for hours to help them acquire the new way. It takes patience. The Toyota Way is a philosophy based on long term thinking. Real progress doesn’t happen by implementing short term fixes.”

By deviating from the standard process, Friesen is attempting to fix the problem by skipping the first three foundational levels of key principles and jumping to the fourth level of the foundation, problem solving. Although he is implementing problem solving by going to see for himself, by skipping the first three levels he is limiting his ability to effectively get to the root cause of the problem and solve it for the long run.

Any short term gains achieved by not solving the problem on the line will not outweigh the long term gains that can be achieved by sticking to the tried and true TPS philosophies. Friesen needs to immediately cease the current deviation to the standards, and return to the proven jidoka and andon processes, which include implementing the “five whys” (see example, Appendix B), to truly uncover the root cause of the seat defects and find a long term solution.