Toyota Toyota Motor Manufacturing. U.S.A, Inc.
Case Study
Operations Management
eMEP10/ePGP03 IIM, Kozhikode Date: 14-Mar-2011 14-Mar-2011
Information in the case: In 1985, o!ota Motor "or#oration $M"% &n'ei(ed it) #(an to o#en an *800 +i((ion Greene(d #(ant in Kent&k!. In &(! 1988, o!ota Motor Man&at&rin, ... $MM% 6ean 'o(&+e #rod&tion 7ith ann&a( #(ant a#ait! o 200,000 o!ota "a+r! )edan) re#(ain the 6&(k o a#ane)e i+#ort) o the )a+e +ode(. In 1992, MM 7a) e#eted to )&##(! 240,000 o the a((-ne7 "a+r!), 7ho)e )a(e) 7ere &# 6! +ore than 20 )ine the +ode( hane in a(( 1991.
Toyota Production System (TPS) o!ota had a(7a!) )tri'en or 6etter ar) or +ore #eo#(e.; P ai+ed at o)t red&tion 6! thoro&h(! e(i+inatin 7a)te 6! #ro'idin t7o &idin #rini#(e), identi!in 7hat 7a) 7a)te in rea(it!. o7 a) (o)e to the #h!)ia( >o7 o #art) a) #o))i6(e. Part) 7ere th&) #&((ed ro+ do7n)trea+ 6a)ed on at&a( &)ae.
Information in the case (Cont.): o i+#(e+ent the P #rini#(e), o!ota e+#(o!ed a 'ariet! o too(). o7 a) (o)e to the #h!)ia( >o7 o #art) a) #o))i6(e. Part) 7ere th&) #&((ed ro+ do7n)trea+ 6a)ed on at&a( &)ae. he #&r#o)e) o jidoka too() 7ere to aid i++ediate #ro6(e+ detetion and ai(itate 'i)&a( ontro(. t!#ia( di)&))ion o a #ro6(e+ 7o&(d )tart 7ith (et?) o )ee it; and then on'ere on the a)hin (iht, triered (o&d +&)i, and (it &# the 7ork )tation?) addre)) n&+6er; on the andon 6oard )to##in #rod&tion. hi) i) to a'oid 7a)te 6! )to##in #rod&tion a&(t! ar). he #(annin #roe)) re>eted I #rini#(e) in t7o +aAor 7a!). Heijunka a()o )!nhronized the a))e+6(! (ine 7ith the &(ti+ate )a(e) o the ar). he )eond I #rini#(e 7a) re>eted in the &)e o kanban ard). kanban ard in(&ded a #art ode n&+6er, it) 6ath )ize, it) de(i'er!
Information in the case (Cont.): Pratie o heijunka: a((ed or e'enin o&t $6a(anin% the tota( order in the dai(! #rod&tion )e=&ene. he heijunka #ratie ahie'ed t7o #&r#o)e). #readin o&t the de+and or #art) a) e'en(! a) #o))i6(e re(ie'ed )&##(ier) o a )&re o 7ork(oad and ai(itated their I #rod&tion.
Quality Control: ettin to&h =&a(it! )tandard), in)#etin e'er! 'ehi(e aain)t tho)e, and o((o7in thro&h on the &)to+er?) e#eriene 7ith )hi##ed 'ehi(e). ()o, #ro'ide in)tant eed6ak to diret o#eration) in(&din na( a))e+6(!. Bn the (a)t )treth o the na( a))e+6(! (ine, C" heked a))e+6(! =&a(it! 6eore ar) 7ent o to e(a6orate )hi##in in)#etion, and it ret&rned; #ro6(e+ati ar) i++ediate(! to an o-(ine a))e+6(! ro&#.
The Seat Problem: "a+r! )eat on)i)ted o )e'era( #iee): the ront (et and riht a))e+6(ie), the rear )eat 6enh and 6akre)t), and the rear )ide 6o()ter). o C", on the one hand, it 7a) a )aet! ite+ 6ea&)e it had to +eet rioro&) )tandard) or the ar?) ra)h #eror+ane. MM?) )o(e )eat )&##(ier 7a) Kent&k!
Information in the case (Cont.): he 7aon +ode() de)tined or Forth +eria added eiht )eat 'ariation) i++ediate(!, 6&t #rod&in or the 7or(d +arket added on)idera6(! to that n&+6er. @aon) de)tined or E&ro#e added another 10 'ariation), and on the horizon 7a) e#ort to a#an and the Midd(e Ea)t, addin )ti(( another 18 )eat 'ariation). he r&n ratio 7a) do7n to a +eaer 85. It had 6een aro&nd 95 a +onth 6eore. hi) 10-#oint dro# +eant a )horta(( o 45 ar) #er )hit, 7hih had to 6e +ade &# 7ith o'erti+e. he ar) 7ith )eat #ro6(e+) a&+&(atin o-(ine re>eted MM?) hoie or hand(in oa)iona( (ithe). In o'er >o7 #arkin area it i) o&nd that there 7ere 18 'ehi(e) 7ith 'ario&) )eat #ro6(e+). o+e o the ar) 7ere there )ine o&r da!), a +aAor )&r#ri)e 6ea&)e ar) 7ere )&##o)ed to (ea'e thi) area 7ith retrot )eat a))e+6(ie) 7ithin the )a+e or the o((o7in )hit. K< re)#onded 7ith a )#eia( de(i'er! o re#(ae+ent) t7ie a da! or a&(t! )eat). o7e'er, K< )o+eti+e) )ent the 7ron )eat a))e+6(ie) that did not +ath an! o the ar) 7aitin or re7ork.
Questions to be Answered Q: @hat doe) it +ean to i+#(e+ent I and jidoka #rini#(e) in thi) )it&ation
More 6road(!, 7hether )eat deet) are hand(ed orret(! on the (ine he o-(ine a))e+6(! ro&tine or hand(in deeti'e )eat) de'iate) ro+ t7o &idin #rini#(e) o MM J !IT and !i"oda. o7 #arkin area 7aitin or attention. It i) on)idered a de'iation o the tr&e #rod&tion, 7hih i) 7a)te i'en o!ota Prod&tion )!)te+ #rini#(e). eond, the &rrent a##(iation i) aain)t ikoda #rini#(e, 7hih in)i)t) on 6&i(din =&a(it! in the #rod&tion #roe)) and on )to##in #rod&tion 7here'er a #ro6(e+ i) deteted. ()o, t7o )tron attit&de) reated 7ithin oranization - )tik to the at) and et do7n to the root a&)e o the #ro6(e+ &)in #$e why%s& are inored. "ontrar! to the)e #rini#(e), the MM #(ant &rrent(! trie) to hand(e deeti'e )eat) 7ith o-(ine o#eration). ()o, the derea)ed #(ant r&n ratio) red&ed the #rod&tion and ored o'er ti+e to reo'er the #rod&tion (o)). hi) +a! not 6e ontin&ed or (on r&n.
C2: I) the &rrent ro&tine or hand(in )eat deet ar) rea((! a (eiti+ate ee#tion to P, or o&(d it 6e a danero&) de'iation ro+ P MM i) de'iatin ro+ the )tandard a))e+6(! (ine #rini#(e) o ikoda in an atte+#t to a'oid e#en)e) in&rred ro+ the )to##in o the #rod&tion (ine or )eat =&a(it! deet). hi) de'iation ha) ontri6&ted to the ina6i(it! to identi! the root a&)e o the #ro6(e+, 7hih ha) (ed to derea)ed r&n ratio) on the (ine and an ee)) o deeti'e a&to+o6i(e) in the o'er>o7 (ot or +&(ti#(e da!). hi) +a! not 6e danero&) de'iation ro+ P, i n&+6er) o )eat deet) are red&ed. MM an 7ork 7ith < to i+#ro'e their =&a(it! #roe)) to red&e the n&+6er o deeti'e )eat) )&##(ied e'en tho&h < ha) 100 'eriation o the )eat) 6eore de(i'er!. ()o, MM an think o another )&##(ier or the )eat a))e+6(! a) < +a! not 6e a#a6(e o hand(in )o +an! 'ariation) o )eat a))e+6(! or "a+r! ne7 +ode( and "a+r! @aon +ode() or dierent reiona( +arket) aro)) the 7or(d. I thi) #ro6(e+ i) not ed =&ik(!, an inrea)ed a+o&nt o 7a)te 7i(( ontin&e to 6e in&rred and the &)to+er 'a(&e 7i(( 6e threatened 7hih an a()o 6e inter#reted a) danero&) de'iation to P. End
