Toyota Motor Manufacturing, U.S.A., Inc

Problem Identification Doug Friesen, Toyota Motor Manufacturing, U.S.A. (TMM)’s manager of assembly, has an urgent issue on hand. His focus on current production and on manufacturing the needed quota for suppliers has led to deviation from Toyota Production System (TPS)’s core competency of lean manufacturing. Because Friesen holds an important position as manager of assembly, this deviation has trickled down to his employees and possibly even their suppliers. He must now work to quickly resolve the issues “The Toyota Way” before the very culture that gives TMM their competitive advantage is compromised. Analysis

Friesen’s decision to make an exception to the rule of stopping the production line when 8 cars were in the clinic was made based on an emphasis to achieve immediate goals needed to meet customer demands. Had TPS principles been followed, a “Code 1” would have stopped the line while countermeasures were discussed.

Fraizen’s decision was contrary to TMM’s jidoka principle requiring any production problems to be visible and corrected immediately. The principle of jidoka is implemented via human capital. This is apparent in TMM’s culture of problem solving and focus on the philosophy of TPS (emphasizing long-term decisions and de-emphasizing short-term consequences). Leaders who live out this philosophy of problem solving are key to its success. Without the commitment of top management and leadership to total quality management practices such as jidoka, they will fail.

This is already beginning to happen at TMM. The assembly line workers are not viewing the defective seats as a problem. Thus, they are not asking, “why?” and are not motivated to determine the true cause of the problem or to fix it. Moving the cars to the overflow lot has eliminated the involvement and teamwork of the assembly line. Furthermore, time has been allowed to pass, compounding the problem. The cause of the problem is still undetected. Although the time taken to get the replacement seats seemed like a good reason not to shut down the production line, they are now paying the price. Because the problem was not corrected on the spot, more andon cords were pulled, which slowed production.

TMM’s run ratio was down to 85% from 95%, due to these increased stoppages. Additionally, an inventory of cars piling up in the overflow lot is creating scrap and rework costs and unnecessary waste (waiting, unnecessary transport, unnecessary movement, defects, unused employee creativity) – contrary to the lean TPS way. Friezen must fix this problem immediately in order to avoid losing market share. The competition in the automotive industry is intense, and TMM must fight for its market share. As assembly manager, Friezen needs to figure out how to address these issues as quickly as possible and minimize the impact on TMM’s long-term operations.

Friezen could try to improve the flow of the defective cars from the assembly line to the clinic, and then on to the final customer. This would avoid having to stop the line and lose valuable production time. Another advantage of addressing this problem off the assembly line is that applying kaizen, or continuous improvement in the clinic will help to shorten the amount of time cars spend there when future problems are detected. However, the main disadvantage of this approach is a large one: it goes against TPS’ key principals of problem solving, people and partners, processes and philosophy.

This decision would go against the key concept of basing decisions on long-term philosophy, even at the expense of short-term financial goals. The flow would also be compromised due to the large number of vehicles still going into the clinic and overflow parking areas, the problems would not be visibly solved on the line, and the teams would not be involved in the problem solving. Also, inventory, bottlenecks, and scrap and rework costs would need to be addressed.

Friezen could also opt to fix the problem on the assembly line. The assembly line workers are the closest to the problem, and would have the best information as to figure out the root cause of the problem. The problems arising from the defective seats would be visible. Additional advantages of this option include a reduction in inventory in the clinic and overflow lot, the flow of the production process would be maintained, the problems would be fixed immediately, and above all, the TPS philosophy would not be compromised. However, this option means delays on the assembly line.

Stopping the assembly line will set back production even further. Overtime was already required to catch up, and shutting down the line would likely mean that TMM would get too far behind to catch up without some negative effects on their customers. Hurting customer relationships could have an adverse affect on demand and TMM’s ability to generate profits. AlternativeAdvantagesDisadvantages

Address the seat problems off-line and apply kaizen to the clinic area•Production is not stopped •Applying kaizan to the clinic would help in addressing future issues•Key TPS principles compromised •Long-term strategy is displaced by short-term goals

•Production flow not efficient •Inventory bottlenecks •Scrap and rework costs rise Address the seat problems on-line, even if production must be stopped•Assembly line workers involved to determine root cause of problem •Visibility of problems •Maintain ideal flow of production •Problems are fixed immediately •TPS philosophy adhered to•Assembly line delays •Possible negative effects on customers •Short-term ability to generate profits compromised

Conclusion and Recommendations Short-term set-backs should not be weighed against long term goals. The best option for the long-term is to fix the seat problems on the assembly line. The TPS culture cannot be compromised, without further, more detrimental problems arising. TMM has gained their competitive advantage based on TPS. Neglecting this core competency will only hurt TMM in the long-run.

Furthermore, if TMM does not fix the root problem, but only continues to put it off by sending the vehicles to the clinic, the lag in production will only worsen. TMM is able to move their cars through the assembly line quickly using lean, just-in-time methodologies and avoiding inventory. Sending the vehicles to the clinic will cause inventory bottlenecks and delays that TMM is not set up to deal with. While addressing the problem on line, Kentucky Framed Seat (KFS), the seat supplier, needs to be involved. If the root problem is determined to be a problem at KFS, TMM’s kaizen experts can help KFS solve the problem in a timely fashion.

Extending total quality management to all suppliers in the value chain is a key component of TPS. Following the TPS philosophy should be the number one objective during this time. The TPS philosophy is what has given TMM is competitive advantage. It is imperative TMM not lose this advantage. Moreover, straying from the philosophy only causes more problems down the road. Friezen, in particular, needs to be sure to adhere to the TPS principles. His deviance from the principles is observed and followed by all his assistant managers, followed by their team leaders, and followed by each team member.

Living out the total philosophy of TPS from the top down is essential for maintaining the culture needed to keep competitive advantage. Friezen needs to set the example, respecting, developing, and challenging himself, his assistant managers, his team leaders, and each assembly line worker.