Grid Analysis - Toyota Manufacturing Case

Grid Analysis is a decision making technique that weighs the factors to options by assigning each factor a numerical value, which reflects the importance of that factor to the decision making process. Grid Analysis is most useful when there are more than one valuable alternative to choose from. Grid Analysis works by identifying individual options and factors to then apply the weighted score by the relative importance of that factor to each of the options proposed (Mind Tools, n.d.).

In the Toyota manufacturing case, grid analysis is used in the decision making process between the competing plants for the Lexus RX 330 line. The potential plants for production of the RX 330 include: TMMI in Indiana, TMMK in Kentucky, NOMMI in California, and TMMC in Canada (“Toyota Motor Manufacturing Canada (TMMC): The Lexus RX 330 Line,” n.d., p. 8). Although these plants offer the capacity, production, and technology needed to produce the vehicle line, various factors must be weighted and evaluated. The internal factors to which Toyota is in control of are known as endogenous factors, and the decision external factors that are largely outside of Toyota control are known as exogenous factors (Fuchs, 2007, p. 27). Each factor is weighted from a scale of 0 to 5 assigning their importance. A weight of zero represents no significance and a weight of 5 represents an extreme significance (Mind Tools, n.d.). The endogenous factors presented in the grid analysis of the Toyota manufacturing case include Plant Capacity, technology, productivity and Quality, Plant competencies and the potential for growth. The exogenous factors presented that are largely outside of Toyota control include location, supplies and vendors, cost incentives, and union presence.