Toyota Motor Manufacturing USA, Inc. (TMM) encountered product proliferation problems with defective seats due mainly to the company’s deviation from its normal production plan and lack of a recovery system. In April 1992, TMM’s run ratio dropped from 95% to 85%, meaning that 45 less cars were being produced per shift, which in turn translated into overtime for the workers. As a result, too many cars needed off-line operations of one type or another before they could go on to shipping. The main source of the problem was the seats defects in the cars, in which case the car would go through the assembly line with the defective seat still in it. Then the car would proceed to the Code 1 clinic area where workers would try to fix the defects, or it would be moved to the overflow parking area to await a new seat to be delivered from the supplier. This process is an exception to the quality control process in TMM. According to Exhibit 10, in April 1992 the number of andon pulls during the first shift for the rear seat increased dramatically, from about 20 pulls in the beginning of April to about 120 pulls at the end of the month; pulls for the second shift also increased greatly.
It should be noted that the seat itself poses several problems, besides those attributed by faulty processes: it is the most expensive purchased part, it is prone to damage, it is the bulkiest of all installed parts, its surface finish must satisfy customers, and it has to meet rigorous standards for the car’s crash performance. Exhibit 8 shows that the most frequent defect occurrences are material flaws with the seat. There are a number of reasons that most likely contributed to the seat defect problem: 1.) The occasional error made by a team member shooting a bolt at an angle, which was minor and easily correctable; 2.) Damage to the seat covering from hand tool usage, which was rare; 3.) The Fall 1991 model change, which introduced many challenges for KFS, but should not have contributed so greatly to the seat problem, being that Tsutsumi, the company’s plant in Japan, had not reported any similar difficulties, and its hook breakage frequency actually went down at the new model introduction; 4.) KFS sometimes sent the wrong seat assemblies to TMM; and 5.) The hook breakage problem, which was the main setback, and most likely derived from the assembly process.
As manager of assembly, Doug Friesen should address the problem by focusing on this exception and reasons for allowing such a deviation from TMM’s normal way of handling problems and the communication and synchronization between Kentucky Framed Seat (KFS), the seat supplier, and the plant. Even with KFS’ bi-weekly special delivery of replacements, there were too many off-line cars in need of maintenance (so many that at one point there were cars that had been waiting for new seats for more than two days), and the duration of this inventory being in the overflow parking area led to much accumulation of defective cars.
Friesen should identify the processes needing improvement, being that they are at the root of the defective seat problem, and by speaking to assembly workers in order to know their input about the assembly process, being that they work directly with the seats and witness the process firsthand. He should then analyze this data and use it to compare breaches between TMM’s output standards with the actual output at the time of the problem. By individually interviewing each assembly worker, he has a better chance at pinpointing the exact location of every part of the production process that has to do with the defective seat problem, and he will then be able to relate these glitches to the missing production numbers.
There are a few options that exist for Friesen regarding how to handle the seat problem. One option would obviously be to revise or reconstruct the seat assembly team, being that the occurrence of seat damage took place during the assembly. The first real signs of the problem are seen after the number of seat styles increased from 3 to 18, so the team might need to be slightly changed in order to be able to adapt to this increase in styles. In doing this, Friesen should take into consideration the extra work that the plant was given after TMM became the sole source of Camry wagons for the first time. Another option deals with off-line operations. If the manager decides to continue the process of correcting defective seats off-line, he should improve or redesign these operations so that there is not so great an accumulation of off-line cars, and also so there is not much overtime work. This is crucial because the high level of off-line inventory, caused by the 10% drop in the run ratio, not only affected sales negatively, but also hindered the important JIT principles of the company.
Friesen could also consider revising the seat design in order to minimize and have better control over assembly defects. Another option deals with the fact that TMM had only one supplier, KFS. Perhaps the company should have multiple suppliers so as to lighten the burden on KFS, instead of having this company exclusively deal with 18 different seat variations. Finally, it should also be noted that the efficiency of each step of the production process is crucial to maintaining quality in the long run. The recommended plan of action for Friesen would be to take all of the aforementioned options into consideration and act on them, since each option focuses on a certain aspect of the whole assembly process or a certain part of the seats. The most important steps to take, however, should focus on the revision and redesign of assembly teams, and the possible increase in the amount of suppliers, because these two areas have the most impact on the assembly process.
The Toyota Productions System (TPS) was created to help deal with the challenge of cutting costs dramatically without the scale economies that American firms enjoyed in order to satisfy customers with variety, quality, and timeliness, all at a reasonable price. In order to try to achieve this, TPS aimed at cost reduction through thorough waste elimination. Since identifying waste was not an easy task, there were two guiding principles that TPS provided to smooth the progress of this process. The first was the JIT production principle. TMM should only produce what was needed, only how much was needed, and only when it was needed. The other principle was that of jidoka. TMM should make any production problems instantly self-evident and if problems were detected it should stop producing. These two principles put high emphasis on the belief that deviations from true production needs and the addition of value were condemned as wastes, and they also made it crucial that plant people be alerted to deviations from any plans about how production was to proceed.
The current routine for handling defective seats deviates from the two TPS principles in a couple of ways. First of all, the high level of defective cars contradicts the JIT principle in that it is a deviation of the true production and therefore considered a waste. The current routine also contradicts the jidoka principle in that the production process does not stop whenever a problem is detected; this detracted from building quality. Secondly, the routine allows for the ignoring of the work ethic of TPS, which is to stick to the facts and get to the rot of the problem. Instead of adhering to these principles and attitudes, the plant is trying to handle defective seats with off-line operations. It does not try to analyze the problem with the “Five Why’s” exercise as it is should.
Defective inventory continued through the assembly line, in contrast to the jidoka principle, and eventually accumulation in the overflow parking area began, which in turn created the need for overtime, two happening that contradict the JIT principle. Finally, the current routine not only contradicted TPS’ guidelines for handling problems, it also ignored the need for methodical thinking to achieve kaizen, or “change for better.” Workers at TMM were supposed to be set on trying actively to continuously find better ways of doing a certain job. The way that the production and assembly processes are currently handled do not coincide with this standard.
The real problem facing Doug Friesen is the identification of the root cause of the defective seats and the faulty processes, which not only disturb the production operations and detract from sales, but also contradict the two firm TPS principles that are supposed to help eliminate problems such as the seat problem before they get out of hand. This problem is concentrated mainly on the off-line operations, which are not suitable to the overall design of the plant. Also, The production process as a whole contributes to the seat problem because currently the plant is overloaded and the workers suffer from overtime. Problems with assembly and production develop from the requirements of running such processes with the aid of JIT and jidoka principles.
Due to the known fact that plants practicing these principles are highly prone to shutdowns, it is necessary that such plants have workers that are capable of solving exposed problems in a prompt, complete, and systematic matter. This is so because true needs would deviate from a production plan unpredictably, and also because shop floor problems were inevitable and would crop up constantly, in turn making deviations from planned operating conditions unavoidable. Any departure from the aforementioned method of handling exposed problems would paralyze the plant, leading to problems like that of the defective seats, hence the need for exercises such as the “Five Why’s.”