Operations Management - II
Submitted to: Prof. Omkar Desai
Toyota, the Japanese auto maker had set up a plant in Georgetown, Kentucky, USA for manufacturing Camry sedans. It wanted to achieve the same reputation of high quality at low cost. The company tried to replicate its unique Toyota Production System (TPS) in its Georgetown plant. In July 1988, Toyota Motor Manufacturing U.S.A. (TMM) began the production of Camry sedans in its plant in the USA. Later in March 1992, TMM started producing wagon versions of the new Camry, and became the sole source of these cars for the first time for Toyota worldwide. This new model created some problems related to seats in the cars.
Toyota Production System
Toyota had always striven for “better cars for more people”. It believed in high quality at low cost. But after the Second World War, running plants only in Japan seemed less profitable due to country’s low labour productivity as well as the absence of scale economies due to low demand of cars in Japan, which was due to low income of people. But, when Toyota started the plant in the US, for producing high quality cars at low cost, they needed to replicate the Toyota Production System (TPS) in the USA plant. TPS aimed at cost reduction by eliminating waste. The waste may be due to overproduction, rework (due to production of defective product), longer set-up as well as idle time and inefficient material handling. To identify what waste was in reality was a critical process. TPS provided two guiding principles for this: * Just-In-Time Production (JIT): Produce only what is needed, only how much is needed and when is needed. Any production from what is truly needed is a waste. * Jidoka: Make any production problems instantly self-evident and stop producing whenever problems are detected. This means build...