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

Problem Statement

Toyota Motor Manufacturing, U.S.A. (TMM) is one of the largest automotive manufacturers in the world. In July 1988, they looked to expand their reach by breaking ground on a new 1300-acre site in North America that would produce 200,000 Toyota Camry Sedans annually. This site was expected to maintain the Toyota Production System (TPS) philosophy.

In March 1992, TMM started producing wagon versions of the new Camry in order to meet global demand. Following production of the new Camry in April of 1992, Doug Friesen, Manager of Assembly, became aware of a growing quality issue occurring with seats on the Camry. This has led to a reduced run ratio at the TMM Georgetown Plant. The new Camry has increased their product proliferation significantly and has posed a challenge to the TMM facility and their single seat supplier Kentucky Framed Seat (KFS). Doug’s role is to address three main issues contributing to the problem with seat quality:

1. Examine the plants deviation from its normal TPS policy and procedures in resolving seat quality issues

2. Product Proliferation issue with TMM’s single seat supplier, KFS is responsible for a majority of the defects related to material flaws and missing parts

3. Asses the run ratio drop from 95% to 85%

Doug would attempt to address the three main issues utilizing the TMM and TPS principles. As a leader in quality, TMM’s philosophy to strive for “better cars for more people” meant to produce cars meeting diverse customer preferences with flawless quality. Doug must address the seat quality issue and their procedures for quality control in order to stay true to their guiding principles.

Situation Analysis

Doug faces the challenge of resolving a seat quality issue that was raised in April of 1992, following production of the new wagon model Camry. In the TPS philosophy, Jidoka is one of the guiding principles, “make any productions problems instantly self-evident and stop producing whenever problems were detected” (Mishina K. & Takeda, K., 1992, pg. 2). This principle insisted on building in quality in the production process and condemned any deviation from the value-addition as waste. Exhibit 2 illustrates the “Toyota House of Quality” in which Jidoka is integrated into their Lean System Philosophy.

The TPS at Georgetown deviated from this principle, “managing seat problems off-line, reflecting TMM’s choice for handling occasional glitches” (Mishina K. & Takeda, K., 1992, pg. 9). This was caused by three main factors; 1) Seats need to match each specific car therefore any stocked parts on the line cannot be used; 2) The supplier (KFS) operates under Just in Time (JIT); 3) KFS cannot immediately