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Table of Contents
Summary of the case: ................................................................................................................................... 3 Operations in Georgetown Production Plant: .......................................................................................... 3 Different Elements of TPS: .................................................................................................................... 5 Issues Affecting the plant:......................................................................................................................... 6 ANALYSIS ....................................................................................................................................................... 9 Recommendation........................................................................................................................................ 12 Risks and Contingencies .............................................................................................................................. 15 Conclusion : ................................................................................................................................................. 15
terminology describing the idea of distributing volume and different specifications evenly over the span of production such as a day, a week, and a month. Under this practice, the plants output should correspond to the diverse mix of model variations that the dealers sell every hour) called for evening out (balancing) the total order in the daily production sequence. , TMMs assembly line exhibited a variety of shapes and colors, with every car displaying a printout (manifest) that informed team members of the vehicles full specifications. The heijunka practice achieved two purposes. Spreading out the demand for parts as evenly as possible relieved suppliers of a surge of workload and facilitated their JIT production. Heijunka also synchronized the assembly line with the ultimate sales of the cars. Quality Control: TMMs quality control (QC) department pursued a mandatory routine of setting tough quality standards, inspecting every vehicle against those, and following through on the customers experience with shipped vehicles. QC served two other functions as well. The first was providing instant feedback to direct operations including final assembly. When eight cars filled up this limited clinic space, the assembly line was shut down under a Code 1 status. This procedure worked as an equivalent of andon pulls for the managers. QCs second unique function was proactive: preventing problems from occurring in the first place. Purchasing: Purchasing department concentrate on managing cost. They prefer low cost supplier and encourages supplier to share their cost data with them and then they discuss with the supplier how they can improve their manufacturing process.
The Georgetown production plant uses Kentucky Framed Seat (KFS) to supply the seat sets for the entire production taking place at the plant. KFS follows a JIT system of production. When the body shells are finished with the paint line the information about the car is sent to KFS. This information enables KFS to ship out the corresponding seat sets in the correct amount of time to synchronize when the car arrives at final assembly and the seat sets are needed to be installed.
for carrying out daily production. The purpose is to eliminate waste in seven categories: (1) overproduction, (2) waiting imposed by an inefficient work sequence, (3) handling inessential to a smooth work flow, (4) processing that does not add value, (5) inventory in excess of immediate needs, (6) motion that does not contribute to work, and (7) correction necessitated by defects. Kaizen requires that a process be first standardized and documented so that ideas for improvement can be evaluated objectively. Kanban: Kanban means signboard in Japanese. The one used for a part supplied by an outside supplier indicates the name of the supplier, the receiving area at Toyota, the use-point inside the Toyota plant, the part number, the part name, and the quantity for one container. A bar code is used to issue an invoice based on actual part usage
The rear seat andon pulls have soared by 450% and 150% for the 1st and 2nd shifts respectively, during April(As per the Exhibit10). Defects are mostly the responsibility of KFS, and KFS owns on average 85% of the defects found in seats on a single day (As per Exhibit 8). With KFS owning 85% of the defects on the TMM production floor Doug knows that it is now time to make changes and identify exactly why they are having so much trouble with the rear seats. In Dougs attempt to adequately address the problem he interviewed his assembly teams and found very few new problems. His assembly staff could not think of anything new that could cause the problem with the seats. This leaves Doug with a couple options internally, first he could reassign the seat assembly teams and bring on more experienced crew to solve the problem, he could improve the off-line operations in the cases where manages decided to continue correcting seats off-line, and lastly he could address the issue of overworking KFS. As Doug Friesen, I would concentrate my efforts on the root case of the problem and not the outcome of the problem. The solution to the rear seat problem should be addressed in a dual effort attack. First, KFS should be contacted to identify exactly why the rear seats are having problems. With this TMM and KFS should work closely together to complete a process evaluation to narrow down the possible sources of the defects. Subsequently, I would concentrate on TMM in-house problem. As we can see from exhibit10 the andon pulls (along the seat installation stations) in April increased gradually throughout the month. This clearly indicates a problem with the installation of the rear seat. TMM must look into the following three internal issues to resolve this problem. Increased number of defective items from supplier (KFS), defects build on defects Gradual decline in part quality, such as screws, fixtures, tools etc. New Team members in the rear seat installation group still learning
The issue with KFS can be solved by working closely with their management team to education and train their employees. The issue of part quality can be easily controlled by addressing the issue with the production control foreman and the purchasing agents responsible for those parts. The last issue is with TMMs new team members. Data shows that the increase in andon pulls occurred when the new crew was assigned to the rear seat assembly section. This is more than likely the major cause of the in house based defects. TMM could combat this problem by partner each new employee with a more experience mentor and have the senior employee train the junior employee as an apprentice until they are ready to work on their own.
ANALYSIS
A failure investigation should be in place which would best serve Toyota in the long-term and would also help all employees study the problem rather than just use a short-term solution. This failure investigation could be similar to the Five Why approach (exhibit 2). The failure investigation would reinforce the Toyota emphasis of good thinking, good products by sticking to the facts and getting down to the root cause of the problem. The failure investigation would begin with an engineering investigation into the problem. This would consist of generating possible reasons for the failure. In the case of the seat failure some possible reasons that would require deeper investigation would be: 1) Whether KFS have an inventory problem when a special request is submitted. 2) Whether the hook material change can affect the installation process. TMMs workers occasionally install a seat-bolt at the wrong angle, but this problem is easily fixed within 30 seconds. This only accounted for approximately 11% of all seat problems between April 14 and April 30, 1992 according to the Group Leaders Seat Defect Data in exhibit 8, so KFS is responsible for the remaining problems. The two most significant problems are material flaws and missing parts, which account for almost 60% of all defects. It is clear that the problem should first be analyzed on the supplier side. TMM should also be using a better Engineering Change process. They should be tracking Engineering Change request (ECR) with better traceability. Shirly Sargent, the group leader of Final 2, mentioned that she had filed an ECR several months prior to May but she had not heard back any information regarding a solution. She should have heard an answer faster and the ECR should have been tracked by TMM. Tracking ECR would give TMM a better idea of an acceptable turnaround time and ensure that it was always followed as a minimum. It turns out that it
would cost KFS $50,000 to complete the ECR and this was an investment they were not willing to make. When Friesen looked into the hook problem he learned that Tsutsumi(Plant in Japan) had identical drawings and that the number of breakages had decreased from 7 occurrences to 1 over the course of a few months. Friesen should communicate with the lead at this plant and find out why this happened. It is possible that after the assembly line workers learned how to work with the material that the failures would decrease. Friesen needed to find out if this problem would go away with experience or would it be necessary to change the design. KFS only delivers replacement seats twice a day and these seats are sometimes not the correct seats that match any of the cars waiting for rework. TMM needs to find out if the seats are not correct because KFS cannot interpret the fax correctly or if they are sending the wrong seats because their computer system cannot account for extra inventory in the shipment. Both problems would deliver an incorrect seat to TMM therefore creating a delay in production. Due to which the run ratio was down from 95% to a damaging 85% in April. The calculations below demonstrate that the decrease in per-shift production is close to 47 cars. Most of this can be blamed on the seat problem. Producing the missing cars via overtime capacity will cost TMM in excess of $16,000 approx. per shift. This translates to around $8.4 Million per year considering two shifts and a 5-day workweek.
Stations Employees Wage/Hour Overtime Cycle Time Shift Length 'Productive' Minutes Run Ratio
100% 473 95% 449 85% 402 'Lost' Cars Per Shift (95% 47 to 85%) Cost per Hour of $19,610 Production Overtime Time Required to Produce 50 Minutes Add'l Cars Cost to Produce $16,215 Additional Cars TMM and KFS should have an electronic order system instead of a fax system. An electronic ordering system would make certain that no information on the seat reordering form is misinterpreted. TMM should file the order electronically using a designated computer system and KFS could notify TMM electronically when they received the order and shipped the seat back. If TMM received a correct seat that matched the order they could close out the replacement seat purchase order and could therefore track the complete delivery time on all replacement seats from KFS. This information could be used as a bargaining chip when prices were being negotiated. To solve the shipment problem KFS could ship more frequently than twice daily. A good amount of shipments would be to ship twice per shift. This would help TMM with their goal of completing the retrofitted seat assemblies within two shifts. TMM could also help with the replacement seat inventory by keeping a certain amount of seats in stock. By keeping a certain amount of seats in inventory TMM
would be able to fix all seat problems within the ideal two shift time limit. TMM would have to look into the cost of carrying the inventory and see if it would be better to change the inventory holding principle or to implement changes between themselves and KFS. TMM has the two shift maximum goal of a turnaround time to fix the seat problem. It was found that some cars had been sitting in the overflow parking area for four days. The cars should have the date of submission in large font so it has better visibility to the workers. TMM should also make sure that the cars in the overflow parking area are following a First in First out (FIFO) inventory flow. This is the best way to ensure that the cars are not idle in the overflow parking area for an excessive amount of time. If a car is sitting for more than two shifts the supervisor of the overflow parking area, Jim Cremeens, should raise a red-flag and bring this car to the top of the priority list.
Recommendation
The short-term recommendation 1) Create a routine to deal with defective seats off-line (outside of the TPS system). This will allow time for a thorough root case investigation of the defective seat problem with minimal impact to the production line. 2) Designate an employee to manage seat correction and replacement and implement a one-shift requirement. In the same manner, have an employee check the seats at the arrival dock so those problems can be identified early. 3) Cars with defective seats should continue to be kept in the clinic area awaiting replacement seats. This will ensure that the production line is not interrupted and that all other aspects of production care not affected. 4) Deliveries from KFS should be increased in frequency to two deliveries per shift in order to maintain production levels and delivery. This will also ensure that cars do not line up in the clinic area.
5) The overflow parking area to visualize the fluctuation in defects. Positively reinforce time limits on replacement seats and time limits on how long a vehicle can stay in the overflow parking area. If the limit is exceeded, a problem-solving meeting should be initiated. 6) Awareness of the potential for seat damage caused by the hook should be communicated immediately to all line workers and KFS in order to help reduce defects as much as possible. 7) Finally, actions should be introduced to revise current procedures in response to problems. QC personnel should be placed with KFS to analyze why so many defective seats are getting to TMM.
finished, the pallet is removed to be reused to carry another seat through the assembly line, and the tag is re-written with a new job number. The pallets with their tags can be used over and over again. Tags chosen for this application require no batteries; instead they receive electrical power from the energy of the RF field when passing an RFID system antenna. These passive RFID tags contain digital memory that can typically store from 1000 to 2000 bytes of data. Integrated RFID controller/antennas are installed into the conveyor system at each work station to automatically read the job identification data from the tag embedded in the bottom of the seat pallets. Any incorrect (skipped steps, out-ofsequence steps) are flagged and corrective action taken. B)Implementation of Barcode: Barcode labels can also be chosen to identify the seats as they move down the line. After all, the barcode is a unique identifier associated with the job and the individual barcode labels cost less than RFID tags. The reasons are simple but key to the success of this application: reliability cost function. First, EMSs readers and tags provide much higher reliability of data in manufacturing environments than can be achieved by barcode techniques. The EMS readers and tags achieve as many as a million read cycles with only a few failures. This means that Intier Seating has a bullet-proof method of identifying each seat pallet. This level of reliability is not possible for barcode reader systems in the manufacturing environment. 3) The TPS system should be implemented at KFS and throughout Toyotas supplier network. KFSs proximity and significance in the manufacturing process are also a good reason why KFS and TMM will benefit from a TPS integration. KFS employees should be trained to identify problems in the line so that solutions can be found. Extensive education is needed for this to work. KFS inspectors should pursue training in the Five Whys. 4) TMM should recommend a reduction in the variety of seats with TMC. In addition, seat parts from Japan should be sent and compared scientifically with the parts that KFS produces and buys. The variety of seats that Toyota is requiring should be minimized to avoid additional problems and to ease the scope of problems when they occur.
Conclusion :
TMM managers have significantly deviated from the TPS principles in order to accomplish short term goals. This creates a dislocation in the system, erodes the benefits from TPS, hides the source of problems and introduces higher costs, time lags, and errors. To tackle the problem Doug Friesen should go back to the TPS supported by jidoka and heijunka principle. To do that he has to enforce these principle and provide intensive coaching. Once the TPS is fully restored, Mr. Friesen should launch a several of initiatives at different point of the line since it appears that instead of a single problem, the seat issue has different sources that have been aggregated and identified at the overflow stage.