Toyota Motor Manufacturing, U.S.A., Inc. Major Issues

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

Major Issues in the Case

Toyota Motor Manufacturing U.S.A., Inc. (TMM) has bypassed their typical response to quality issues known as "jidoka" in a special circumstance regarding seat installation. As opposed to stopping the assembly line and focusing on the underlying root of the problem, in the case of the faulty seats the cars were allowed to continue through the production line with a special marking that indicated that there was a seat defect. When the cars finished the assembly line phase they were then parked in a separate area in which the seats could be repaired or replaced. Allowing the cars to complete the assembly line saved a lot of time and expense because the team did not have to stop operations. However, at the same time it made finding the root cause of the quality issues complicated because it required more investigation and clouds the ability to clearly see what is causing the problems. Therefore, manager Doug Friesen must decide how to best go about addressing the solution to the seat problem and the production line.

Possible Solutions

There are basically three different solutions that Doug should consider. The first is to keep the current system of using the overflow lot for the quality defects. It is possible that, given more time, the crew could eventually locate the root problem under the current system and eliminate the overflow issues. The advantage to this system is that the production line does not have to be stopped for the quality issues and this maintains throughput. However, this approach deviates from Toyota's entire production philosophy and it is not addressing the root problems associated with the quality problems. Yet since the seats are produced by a strategic partner, KFS, they have limited control over external quality issues. They can work with their suppliers closely to improve their internal quality issues, but on some level they are completely dependent on their seat suppliers.

Another option would be to return to the jidoka and andon pull stations. Although this a costly option because it stops the production line, this would put pressure on the entire station to work out the issues and improve quality standards so that such issues are resolved quickly. However, since the seats are made to order in a JIT system that mirrors the production flow on the main line, there could be significant delays in production caused by waiting for the defective seats. The production line could be down for hours while the workers waited on replacement seats from their vendor.

Another version of this option might be to also require that the jidoka and andon stations be applied to the external vendors manufacturing line. This might improve the quality issues before the seats ever get to Toyota. However, this could also interfere with the pull system and prevent the supplier from being able to keep pace with the Toyota production will. If the supplier could not produce the seats in time, then there would be the potential for the production line to be stopped in this option as well.

A final option might be to try to keep a safety stock or buffer station nearby with replacement seats. Therefore, when a quality issue was detected with a seat then a replacement could be pulled from a nearby buffer station. This would represent something of a bridge between the two previously mentioned alternatives because it would allow for the seats to be fixed on the line and without any significant delays to the production line. This option would also work with the jidoka and andon system however it somewhat counter to the Just-in-Time production philosophy because it creates excess inventory which would be considered waste.

Each of the different options has its own set of advantages and disadvantages. Continuing with the current arrangement would allow the production line to continue to flow smoothly however the flood of cars in the overflow area. The traditional Toyota approach to managing quality with the jidoka and andon system might work to resolve the quality issue faster but would come at considerable cost due to the delays in production. The final option would bridge the two alternatives and address the overflow and the production line delays but it would also add significant cost through establishing excess inventory as a buffer.

Recommendations

There different directions that Doug could take, however the first suggestion that is recommended it to create a multi-disciplinary team to further investigate the quality issues. This should include management from KFS so that all stakeholders are represented. The hook issue requires that multiple parties be involved that can offer different perspectives into potential solutions. However, with that in mind, Doug can build a phased solution to the issue. The first phase would be to build the investigation team and set a deadline and prioritize the steps that need to be taken as a group.

The team desperately needs to correctly determine the root cause of the quality issues. If it is the metal hooks without a doubt, then the team would have a much clearer decision to make. However, without understanding the root cause entirely then there is limited progress that can be made. It is reasonable to suspect that there might be a different grade of steel or some different design configuration that might rectify the problem and save both TMM and KFS a substantial investment. Furthermore, if there are problems with the quality during installation, then it is also feasible that the seats might have quality issues down the road as well. If the parts do not break during normal wear and tear in the vehicles, then they might also break during service when technicians remove and replace the seats to get to other components.