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Toyota Motor Manufacturing, USA, Inc.

Toyota Motors Manufacturing (TMM) plant in Kentucky is facing problems with its seat suppl. There are
a number of cars sitting off the line with defective seas or no seats at all. TMM has a sole source of seats
that is Kentucky Framed Seat (KFS), which is located just half an hour from TMM. KFC follows the just-in-
time system as well, and its seats are manufactured and arrive on TMMs assembly line, just as the car is
ready for the seat to be installed. This system worked magically well while there were 12 possible
combinations of seat styles and colors. As the different styles and colors for camrys and the addition of
wagon models started, product proliferation lent to increased instances of quality failure.
Because of the problems with the seats, TMMs normal production plan has suffered and the run ratio
dropped from 95% to 8%. This means that TMM is making 45 less cars per shift than before and also
translates to overtime for employees. Too many cars are requiring off-line operations and the overflow
parking area has a backlog of 3 days.
Delving further into the complexities introduced because of product proliferation, we see that the
number of products has increased from 12 possible combinations to 15 for the camry. The addition of
the wagon model introduced 18 additional seat variations In the near future cars exported to Japan and
Middle East will require another 18 seat variations. The production line is designed so that each seat
matches a particular car, hence KFS also uses the Just-in-time model and has been working with TMM to
increase its total quality control and kaizen capacity. This just-in-time system works through sequential
pull so KFS produces and trucks 58 seat sets at a time to TMMs plant. Because of the heijunka concept,
seats are not made to stock because the strategy is to distribute volume and different specifications
evenly over the span of production. Hence KFS needs to respond to the diverse mix of model variation
that is on the assembly line that very hour or so.
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From reading the case, it seems that TMM has not really learned the Toyota Production System (TPS) as
they are willing to make an exception for the seats. KFS too is struggling to implement heijunka. TMM is
also in violation of the jidoka concept wherein production problems are made self-evident through
jarring visual information. Jidoka demands that production is stopped when there is a defect and doesnt
allow defective items to move on to the customer (next station in production). Other problems include
an illegible re-order form (exhibit 9) instead of a Kanban system.
One key point, that I was struck by is that KFS is being accused for the seat defects before any root cause
investigation and five whys. Also KFS is being treated as a supplier as opposed to being a partner. Given
that at least some part of the fault lies at KFS, TMM needs to become more involved in KFSs quality
control process. KFS also needs to go back to the concepts of andon, heijunka, jidoka and kaizen and
ensure that all defective items are fixed on the assembly line before they move to the next station.
Another suggestion is that a design and market review is done to see if so many different combinations
of seat sets are actually demanded from the market. For long-term efficiency, TMM needs to continue
to build KFS capacity.
A more radical solution, might be that the lean production system is not applicable to KFS and they
might need to build made to stock. This analysis needs to be undertaken before TMM as the main buyer
from KFS tries to influence their system too much.