The Toyota Production System (TPS) was created by Sakichi Toyoda based on the idea
of the complete removal of all waste connecting all phases of fabrication in search of the most
proficient and practical method. Although it has taken many years, it has progressed to increase
efficiency based on the Just-in-Time method created by Kiichiro Toyoda. His notion was to
make things that are generated when machines, facilities, and individuals work together to add
value without producing waste. These values are still in practice today and have advanced into a
world-renowned manufacturing system, not only used at Toyota and the automotive trade but
within production activities all over the world.
Introduction
Exercise 1 - Critical Assessment of the Toyota Production System (TPS)
a. Demonstrate your team's basic understanding of the TPS by 1) defining in your team's
own words any eight of the terms found at http://www.toyotageorgetown.com/terms.asp and
2) applying them to one or more of your team's own companies or other organizations.
Team Schrodinger will define, in our own words, the below eight terms that were
found at http://www.toyotageorgetown.com/terms.asp which were applied to Angela’s current
organization, ABC Engineering, LLC.
Andon – a status display station. During hardware, software and mechanical design
implementation, the product is ran through the Andon testing to alert of a problem in production.
Genchi Genbutsu – gaining an understanding of the work being accomplished by
observing the actual work being done. As a hardware or software engineer, you cannot fully
understand the duties of your position in the production of the material for the customer until you
Genchi Genbutsu.
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Hoshin – strategic goals of a company, from a top-down approach that ensure objectives
from senior management, are effectively communicated all the way down the chain of command.
ABC Engineering, LLC management team practices hoshin for the lower level engineers to
understand the objective and strategic goals of the company.
Just-in-time – a method to improve the runtime performance of high-end engineering
products, software, and services for the government customer. ABC Engineering, LLC promotes
the Just-in-time method when designing, developing, prototyping, and deploying hardware,
software, and mechanical solutions for the government customer.
Kaizen – the process of making the work environment more efficient and effective
through creating a team atmosphere, improving everyday procedures, ensuring employee
satisfaction, and ensuring safety. The goal of Kaizen is to make small changes over a period to
create improvements within ABC Engineering, LLC.
Muda – a systematic method for waste minimization within the engineering system
without sacrificing productivity. ABC Engineering, LLC uses Muda when fabricating, designing,
developing, prototyping, and deploying hardware, software, and mechanical solutions for the
government customer.
Nemawashi – a meeting to explain a new plan, proposal or idea being promoted to the
upper echelons of ABC Engineering, LLC. Performing nemawashi is essential to get a decision
made or changes implemented within ABC Engineering, LLC.
Pokayoke – a piece of machinery used at ABC Engineering, LLC when fabricating,
designing, developing, prototyping hardware, software, and mechanical solutions that assist in
reducing human error. ABC Engineering, LLC is geared toward quick reaction capabilities on a
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short notice for the government customer. Thus we must use the Pokayoke to produce a pristine
product without human error.
b. Describe the TPS as a total entity. What are its purposes? Its advantages? It's
limitations? How is it now evolving? Is it getting better – or not? Has it been successfully
copied by other motor vehicle manufacturers? Why or why not?
The Toyota Production System (TPS) is a system that is immersed in the idea of
removing all waste through installing all characteristics of manufacturing in search of the most
proficient and practical method (The Toyota Production System, n.d.).
It has taken many years, and incessant improvements, but the overall purpose of the TPS
is creating the vehicles ordered by customers in the most rapidly effective way in order to
distribute the vehicles as fast as possible (The Toyota Production System, n.d.).
Advantages of the TPS are it was created on two theories; jidoka and Just-in-time. Jidoka
is the concept that when a problem arises, the equipment instantly stops, thwarting faulty
products from being produced and Just-in-Time is when each method produces only what is
necessary by the next process in a uninterrupted flow (The Toyota Production System, n.d.).
Limitations of the TPS is the difficulty in executing a new system and way of doing things, as
well as the cost in reteaching the employees.
According to Toyota, by practicing the values originally designed by Sakichi Toyoda of
"Daily Improvements" and "Good Thinking, Good Products," the TPS has advanced into a
world-renowned manufacturing system (The Toyota Production System, n.d.). Improvements to
the TPS are made regularly in order to ensure its continued progression.
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The "Toyota spirit of making things" is referred to as the "Toyota Way" and has been
executed by companies in Japan, the automotive trade, as well as production activities globally
(The Toyota Production System, n.d.).
Exercise 2 - Grid Analysis
According to the Johnson case study (2003), on 2000, Toyota concluded that there was a
need to further expand their presence and operations in North America in special during a crucial
time when the company is contemplating the new Lexus RX 330 Model production. To reach
consensus, the new plan’s location, the company need to evaluate several options. As part of
Toyota cultural development process, the deafferent departments, staff, and teams need to reach
a consensus, before presenting the case to the upper-level management. After analyzing the
North American location situations, the teams concluded that there were numerous alternatives
which required depth analysis. After having analyzed the consensus building, usually performed
during a decision-making process, it was considered the use of a matrix analysis. According to
Mind-Tools (2016). A Matrix is an excellent tool which facilitates the decision-making process,
the goal to reach a final decision.
Toyota has under consideration, to build a new Lexus RX 330 line, this will be the first of
its king build by the company outside Japan. This vehicle was considered by the firm to be its
prime vehicle, this factor, determine a location as a critical part of the decision-making process.
The company has to select a new plant’s location in the United States or TMMC in Canada. At
present, Toyota possesses three plant locations in the United States which manufacture entire
vehicles for final assembly; those locations are; Kentucky (TMMK), Indiana (TMMI) and
California (NUMMI), Johnson (2003).
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a) List of the key main factors considered by Schrodinger Team for the Toyota Motor
Manufacturing; North America Plan location decision.
Considering that Toyota has a full commitment to quality and its Toyota production
system (TPS), which modernizes the manufacturing process to build the vehicles and to make
them more efficient and effective. Those elements need to be considered in the evaluation of the
different possible locations, as a consequence, those elements have been assigned a weighted
score to determine the best plant’s location. According to Johnson (2003), there are several
factors related to effectiveness and efficiency such as plant capacity, the potential for growth and
plant’s competencies. Other factors that need consideration are the maximization of the network
performance and the TPS operation compliance. The factors considered can be classified into
two different categories; Internal (Endogenous) or External (Exogenous). Internal factors are
those factors that the company has a control which contributes to the decision making i.e. plant
capacity, growth potential, productivity, and technology. The external factors are those that the
firm has no control over, i.e. cost incentives, government regulations and network suppliers.
There is a slight variation among the plants depicted throughout the evaluation (see table one,
Decision Matrix for Toyota plan new location analysis).
Weighted Scoring. Team Schrodinger considered the following weighted criteria and
assigned scores to the internal factors as follows:
? Production was weighted at 5 considering that production is Toyota highest value during
the decision-making process Johnson (2003).
? Facility was weighted at 3, considering the facility determines the production capacity
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? Innovation and efficiency were weighted at 4; this is a clear continue improvement
indicator in the company and how efficient the resources are employ toward the company
success.
Weighted Scoring. Team Schrodinger considered the following weighted criteria and
assigned scores to the external factors as follows:
? The community was weighted at 3 because of its indirect influence on the company’s
operations growth. This factor is related to the customer relationship which Toyota have
an efficient way to influence the customers through innovative ways.
? Cost Incentives was weighted at 5, this factor is as important as the production and is and
determinant factor for the company profits
? Government Regulation was weighted at 5, Toyota is fully committed to obey and
comply with all the laws and regulations of those countries where the company has
assets.
b) Using the score from the Team Schrodinger’s weighted scoring model and considering
the Ringo Show and Nemawashi concepts, Present support recommendation for the North
America Plant location
According to Johnson (2003), Toyota uses a concept named Ringo Sho to gain approval
for an initiative; this is achieved by demonstrating the proposed ideas and elaborating business
plan accepted by other members of the company before elevating the proposal to the upper-level
management for approval.
According to Johnson (2003), Nemawashi is a consultation present to the staff to build
consensus before a meeting.
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Both concepts, Ringo and Nemawashi advocate a very conservative and risk opposed
approach to internal initiate. The final result obtained through the Matrix's calculation depicted
that California (TMMC) achieved the highest rank 110 among the other locations. Selecting
TMMC location for the new RX330 line will present the least risk of Toyota making this place
the best plant location. Since the TMMC’s opening, the plant has demonstrated a full quality
commitment and a very effective industrial process, factor significant for Toyota. Additionally,
TMMC is recognized for its high-quality production. The plants won four J.D. Power Awards for
plan quality to include two Gold awards. Most likely, TMMC will ensure growth and innovation
for the company. Based on the TMMC’s reputation for quality and proactive initiative, it is
evident that the plant will immensely contribute to the company highest production. Since its
opening, TMMC has led the way for Toyota in R&D by testing and creating innovative parts
used in the manufacturing of the RX 330 including starters, alternators, batteries, Anti-rust
protection, traction, and control systems and ABS. Johnson (2003). The TMMC is an
experienced, and skillful plant which will make sure specifics key features are included in a
model for a higher demand market. Finally, TMMC creates a comprehensive quality control
system named KPI-Congos that would help better manage key performance indicators of quality
control.
Based on the matrix analysis, TMMC is the most suitable plant to fabricate the RX 330
for Toyota as depictive by the included matrix (see table one, Decision Matrix for Toyota plan
new location analysis).
