1. utdallas.edu/~metin 1 Toyota Motor Manufacturing (TMM) A case on Just-in-time and Total Quality Management

2. utdallas.edu/~metin 2 TOYOTA - the Largest Car Manufacturer

3. utdallas.edu/~metin 3 Toyota Camry Then (1992) and Now (2007)

4. utdallas.edu/~metin 4 To Cincinnati To Dallas Toyota Georgetown Plant

5. utdallas.edu/~metin 5 Georgetown Plant

6. utdallas.edu/~metin 6 Georgetown Plant www.toyotageorgetown.com

7. utdallas.edu/~metin 7 History of the Plant –Ground breaking, May 1986 –First Car, May 1988 –Fujio Cho named the second president, Dec 1988 –1 millionth Camry, Oct 1993 –2 millionth Camry, Apr 1997 –Camry #1 selling car in the US in 97, 98, 99, 00 –Gary Convis named fifth president, Apr 2001 –Camry #1 selling car in the US in 02, 03, 04, 05 –Sixth generation Camry starts, Feb 2006

8. utdallas.edu/~metin 8 Overview of the Production Process u ???? manufacturing, ???? u ????, used for panels, bumpers, connections, protections u ????, shaping the steel coils into body parts –Uses ???? dies (analogous to cookie cutters) u ???? of the body u ???? –Trim »Heater, A/C, Wiring »Bumpers, Headliners –Chassis, underbody work, engine marriage –Final line, air bags, instrument panels, seats u Final test, ????

9. utdallas.edu/~metin 9 What is Doug Friesen’s problem?

10. utdallas.edu/~metin 10 Doug Friesen’s problem A ???? run ratio of ??%: Number assembled actually / Number could be assembled u Line is stopped due to defectives by pulling an andon cord –Too often or too rare? u ????, defective car-seat combinations sent downstream u Defectives are due to ???? rotation, product ????, ???? ????/???? design u A substantial number of cars off-line with ???? seats or ???? seats. –Some cars wait ???? days for seats in the ???? area although ???? commits to send seats in a single shift. »Is the reordering of Ex.9 form readable? »Cars served FIFO? –What is the problem with the seats?

11. utdallas.edu/~metin 11 What are the Seat Problems?

12. utdallas.edu/~metin 12 Seat Problems u ???? More problems with the front or back seat?

13. utdallas.edu/~metin 13 A Test of Japanese u Andon u Ikko-nagashi u Heijunka u Jidoka u Kaizen u Kanban u Muda u Poka-yoke u Takotei-mochi u Tsukurikomi What is violated at TMM?

14. utdallas.edu/~metin 14 A Test of Japanese u Ikko-nagashi: Lot size of one u Heijunka: Production smoothing to end up with a level plan u Jidoka: Do not pass the defects to downstream u Takotei-mochi: Worker flexibility u Tsukurikomi: Built-in quality inspection

15. utdallas.edu/~metin 15 1. Line Stoppage Setting of the stage: A worker pulls the andon cord, music starts, team leader comes. TL: - What is the problem? W: - …………. TL: Decides how long the line should stop: 1 Cycle=?? seconds or more. If the problem is severe, TL calls the group leader.

16. utdallas.edu/~metin 16 Continue to violate Jidoka? u Costs of line stoppage –Stopping for 1 cycle of 57 seconds »Loss of revenue by one car »Loss of profit –Overtime can be used to recover

17. utdallas.edu/~metin 17 Continue to violate Jidoka? u Costs of line –Stopping for 1 cycle of ?? seconds »Loss of revenue by one car, $??,??? »Deduct costs of ??% »Loss of profit of $?,??? –Overtime can be used to recover »Cost of ?? seconds of overtime ??*??*??/????=$?.???/worker »How many workers stop and do overtime? u 1 team, 1 group, assembly line, paint line, …, entire plant? u Depends on the ????? inventory between work centers and the length of the stoppage. –Ikko-nagashi couples work centers: Stopping one is stopping all.

18. utdallas.edu/~metin 18 2. Crowding in the overflow area u Can you read the reorder form in Exhibit 9? u Computerize the information flow between TMM and ???? ? u What is the benefit of dedicating an ???? area specific to seat problems? u Dealing with mistakes efficiently vs. Eliminating mistakes

19. utdallas.edu/~metin 19 3. Assembly area u Job rotation, a problem source or a fix? –Is Takotei-mochi possible without rotation? u Hook, now made of ???? as opposed to ???? –Personal experience: ???? interior front door handles in my 94 Corolla –$50,000 to improve the hook design u Build a seat safety inventory to reduce mismatches?

20. utdallas.edu/~metin 20 3. Assembly area u Job rotation, a problem source or a fix? –Empowering the ????, ???? work force –Boredom is a source of errors, Reasonable ???? improve productivity u Hook, now made of ???? as opposed to ???? –$50,000 to improve the hook design »Distribute the cost to cars »(1 broken hook per shift)*(2 shifts per day)*(1000 days for this Camry generation) »Cost per car is $??, reasonable? »What if the hook problem continues after the redesign? »Investigate/respond to hook design change »Why does not Japanese plant experience the same problem? u Does TPS work better in Japan? Does TPS work only in Japanese culture? u Build a seat safety inventory to reduce mismatches

21. utdallas.edu/~metin 21 4. Supplier u Seat quality coming down –At least for the new models –Addition of Camry Wagon and more types of seats u Who is responsible for the seat defects »The supplier? »The transporter? »The TMM receiving? –Sharing the responsibility to find the root cause of the seat defects

22. utdallas.edu/~metin 22 5. Seat Mismatches: RFID as a potential fix u See Exhibit 6 for the layout u ???? comes from main line u ???? comes from a feeder line u Both ???? and ???? are RFID tagged u When the tags do not match, the workers are alerted u This eliminates “some” errors u Implemented in conjunction with a seat supplier according to ChainLink Research (www.chainlinkresearch.com) webinar on January 10, 2007.www.chainlinkresearch.com

23. utdallas.edu/~metin 23 How much of TPS is culture? How much of it is science?

24. utdallas.edu/~metin 24 Toyota is worried of its culture being diluted with fast overseas growth “… the hardest thing for Toyota’s new American employees to accept: those colored bar [performance] charts against a white bulletin board, in plain view for all to see.” Latondra Newton, Toyota Employee in Erlanger, KY New York Times Business Feb 15, 2007. Aspiring Toyota factory leaders attend Toyota Technical Skills Academy (high school) in Toyota City, Japan. They study mechanical drawing/design. A separate institution, Toyota Institute, prepares executives for Toyota Way. The institute sends off its executives to offices around the world as missionaries.

25. utdallas.edu/~metin 25 based on a trip on Nov 19, 2002 NUMMI

26. utdallas.edu/~metin 26 To San Jose To Fremont Railway Tracks To Oakland Harbor

27. utdallas.edu/~metin 27 History/Products u Late 70’s oil crisis u GM closes Fremont, CA plant firing 6000 in 1982 u Toyota approaches GM to set up Toyota production system at a GM plant, United Auto Workers accepts the deal u GM and Toyota put together $400M in 1984. –GM is the landlord, it owns the infrastructure –Toyota is the tenant u Nummi = New United Motor Manufacturing, Inc is born in 1984 as the unique example of a Toyota – GM joint venture u Products: Toyota Corolla, Tacoma Trucks, Pontiac Vibe (Toyota bottom, GM top) and Toyota Voltz (Toyota bottom, GM top, sold in Japan), GM Prism until 13/12/01

28. utdallas.edu/~metin 28 Workers u Nummi has about 4500 unionized workers u Workers are under two types: –Production, high school graduates –Maintenance u Workers work in teams of 4-6 u Workers in a team rotate the tasks every 1-3 hours u Team leader is responsible for the rotation. u Team leader withdraws parts from the inventory (every 1-2 hours) and provides the tools as necessary u Workers make $17 per hour

29. utdallas.edu/~metin 29 Capacity u Nummi has a cycle time of –60 seconds for Corolla, 1 body –82 seconds for Tacoma, 3 bodies »only cabin is produced at Nummi, the bottom and the back are bought from suppliers u Nummi works in two shifts –I: 6:00-14:30, II: 16:30-1:00 –Each shift has 1 hour lunch/dinner break –Starting the first shift at 6:00 workers avoid heavy morning traffic –Two hours between shifts I and II is to allow for overtime after the first shift when necessary

30. utdallas.edu/~metin 30 Work Flow u Stamping: Forming metal (side, back, front) panels with presses u Body & Weld: Putting panels together u Paint: Paint inspection is the current bottleneck –Primer body paint applied by robots (chemically hazardous task) –Door jambs painted manually u Plastics: Making bumpers, inside panels u Assembly: Putting in tires, engine, seats, bumpers, harnessing. Cars, trucks on 2 km, 0.8 km conveyors u Cars contain Building manifest = BOM = Ingredients list at every step of these operations

31. utdallas.edu/~metin 31 Just in time u Kaizen: continuous improvement u Kanban: replenishment every 1-2 hours u Jidoka: Assure 100% quality. Otherwise pull the Andon chord –1000 times per shift –9% of line stops are longer than 30 seconds –Line stops longer than an hour once every month u Muda: Waste to be eliminated u Genchi Genbutsu: Go to the source to learn and to solve the problems u This Japanese terminology is all over the boards in the plant

32. utdallas.edu/~metin 32 Creative Tool / Work Place Design u Die change at the stamping in 3 hours u Tilted storage bins for ease of access u Collapsing storage boxes when empty –To reduce the empty box storage requirements in trucks returning to suppliers, say in Indiana –These boxes save about $10M annually –The worker who suggested the boxes earned several thousand points. 1 point = $1. u More info www.nummi.com

33. utdallas.edu/~metin 33 To San Antonio by I-35 I-410 Loop I-35 & I-410 Intersection Southwest of San Antonio Home of Tundra in San Antonio

34. utdallas.edu/~metin 34 Toyota Way of Finishing a Class: - ?????? !

35. utdallas.edu/~metin 35 Appendix Where is your favorite brand manufactured?

36. utdallas.edu/~metin 36 All of Toyota Plants in the North America Toyota. Tijuana, Mexico Tacoma Toyota. Long Beach Hino Nummi: Toyota-GM. Freemont. Corolla, Tacoma, Pontiac Vibe Toyota. San Antonio Tundra Toyota. Blue Springs Highlander Toyota. Georgetown Avalon, Camry, Solara Toyota. Princeton Tundra, Suquoia, Sienna Toyota-Subaru. LaFayette Camry Toyota. Cambridge Corolla, Matrix, Lexus, Rav4

37. utdallas.edu/~metin 37 All of Honda Plants in the North America Honda. El Salto, Me Accord Honda. Lincoln Odyssey, Pilot Honda. Marysville Accord, Acura Honda. Decatur TBO in 2008 Honda. Alliston, Ca. Civic, Acura, Odyssey, Pilot, Ridgeline

38. utdallas.edu/~metin 38 All of Nissan Plants in the North America Nissan. Canton Quest, Armada, Titan, Infiniti, Altima Nissan. Smyrna Frontier, Xterra, Altima, Maxima, Pathfinder

39. utdallas.edu/~metin 39 All of Hyundai-Kia Plants in the North America Hyundai. Montgomery Sonata, Santa Fe Kia. LaGrange TBO in 2009

40. utdallas.edu/~metin 40 All of Mercedes and BMW Plants in the North America Mercedes. Tuscaloosa M, R classes BMW. Spartanburg Z4, X5, X6 M roadster, coupes

41. utdallas.edu/~metin 41 All of Ford Plants in the North America Ford. Hermosillo, Mex. Ford Fusion, Lincoln MKZ, Mercury Milan Ford. Kansas City Escape, Escape Hybrid, Mazda Tribute, Mercury Mariner, F-150 Ford. Cuatitlan, Mex. F-150, 250, 350, 450, 550,Ikon Ford. Saint Paul Ranger, Mazda B series Ford. Louisville F-250, F-550, Explorer, Mercury Mountaineer Ford. Chicago Taurus, Mercury Sable Ford. Avon Lake Ford E Series Ford. Saint Thomas, Ca. Crown Victoria, Grand Marquis Ford. Oakville, Ca. Edge, Lincoln MKX Ford. Wayne Focus, Expedition, Lincoln Navigator Ford. Flat Rock Mustang, Mazda 6 Ford. Dearborn F-150, Lincoln Mark LT Ontario, Michigan, Illinois, Indiana, Ohio in Focus

42. utdallas.edu/~metin 42 All of Chrysler Plants in the North America Chrysler. Toluca, Mex. Chrysler PT Cruise, Dodge Journey Ontario, Michigan, Illinois, Indiana, Ohio in Focus Chrysler. Saltillo, Mex. Dodge Ram Chrysler. Newark Dodge Durango, Chrysler Aspen Will close in 2009 Chrysler. Fenton-South Grand Voyager, Grand Caravan, Cargo Van Chrysler. Fenton-North Dodge Ram Chrysler. Belvidere Dodge Caliber, Jeep Compass, Jeep Patriot Chrysler. Toledo Jeep Liberty, Dodge Nitro Chrysler. Brampton, Ca Chrysler 300, Dodge Challenger, Dodge Charger Chrysler. Windsor, Ca Dodge Grand Caravan, Chrysler Town Chrysler. Detroit-Jefferson North Jeep Grand Cherokee and Commander Chrysler. Detroit-Conner Ave. Dodge Viper, SRT 10 Roadster Chrysler. Warren Dodge Ram, Dakota, Mitsubishi Raider Chrysler. Sterling Heights Dodge Avenger, Chrysler Sebring

43. utdallas.edu/~metin 43 All of GM Plants in the North America GM. Ramos Arizpe, Mex. Pontiac Aztek, Chevy Cavalier, Chevrolet Checy, Pontiac Sunfire, Buick Rendezvous Ontario, Michigan, Illinois, Indiana, Ohio in Focus GM. Silao, Mex. Chevrolet Suburban, Chevrolet Avalanche, GMC Yukon, Cadillac Escalade GM. Toluca, Mex. Chevrolet Kodiak Truck Stopping in 2008 GM. Arlington Chevy Tahoe, Suburban, GMC Yukon, Cadillac Escalade GM. Shreveport Chevy Colorado, GMC Canyon, Isuzu brands, Hummer H3 GM. Fairfax Chevy Malibu, Malibu Maxx, Saturn Aura GM. Wentzville Chevy Express, GMC Savana GM. Doraville Chevy Uplander, Pontiac Montana GM. Spring Hill Saturn Ion and Vue Currently down GM. Bowling Green Cadillac XLR, Chevy Corvette GM. Wilmington Saturn L series, Pontiac Solstice GM. Lordstown Chevy Cobalt, Pontiac Pursuit, G4, G5 GM. Moraine Chevy Trailblazer, GMC Envoy, Oldsmobile Bravada, Isuzu Ascender, Saab 9-7X Will stop in 2010 GM. Fort Wayne Chevy Silverado, GMC Sierra GM. Janisville Chevy Tahoe, Suburban, GMC Yukon Will stop in 2010 GM. Oshawa, Ca Chevy Impala, Buick Allure, Chevy Silverado, GMC Sierra. Trucks will stop in 2009. GM. Lansing-Grand River Cadillac E-SRX GM. Lansing-Delta Township Buick Enclave, Saturn Outlook, GMC Acadia GM. Flint GMC Sierra, Chevy Silverado, Chevy - GMC medium trucks. GM. Pontiac Chevy Silverado, GMC Sierra GM. Detroit Buick Lucerne, Cadillac DTS GM. Orion Pontiac G6, Chevrolet Malibu