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MAPUA INSTITUTE OF TECHNOLOGY

School of Graduate Studies

In

Engineering Management

Production and Operations Management

Toyota Motor Manufacturing, USA, Inc.

Submitted by

Olivia Mae D. Del Rosario

Carla Angelica I. Santillan

Angelo C. Santos

Submitted to:

Professor Robin Owens

May 21, 2011

Executive Summary

Problem Statement/Key Issues

Key issues lie on two standpoints: quality of seat sets from KFS and deviation to Jidoka practice at assembly operation of TMM. The secondary problem is the increase of andon pulls from 12 to 120 pulls per shift in the rear seat installation station. (Please Refer to Appendix 1 for Why-Why Analysis)

Supporting Argument

Based on Pareto chart (Please refer to Appendix 2), out of 79% of found defect reasons, 86% is KFS’s failure to provide quality seat sets to TMM. Due to this, TMM needed to incur unnecessary overtime cost of $391.58 and opportunity lost of $1,665,000 for the 90 cars that were not produced as planned. (Please refer to Appendix 3 for computation).

Misalignment of quality standards between KFS and TMM is also evident because of the sudden increase of seat set defects in April. This is were the result of the limited time allotted tofor KFS for changeovers, considering the increase in variation of seat model which resulted to increase in change-over time. and building of capacity for the new model. This, therefore, imposes high risk of no operation for TMM because supply of seat sets is dependent on the KFS productivity operation.

In addition, TMM’s violation to Jidoka practice did not help address the seat problem. Although KFS is pursuing for quality seat sets, inspection for possible defects was only done by KFS before its delivery to TMM. (Please refer to Appendix 4 for Processing of Seat Sets from KFS to TMM). On the other hand, despite the awareness on seat defects, TMM still allowed these defects enter their assembly line and only treat them off-line. (Please refer...