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Toyota Motor Manufacturing Usa Case Study

Essay by   •  April 2, 2016  •  Case Study  •  788 Words (4 Pages)  •  1,835 Views

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Group Name: TER

Course Name:

BA452/M Operations Management

Group Members:

 Tu Thi Thanh Tran       150105012

 Hui Fen Chen                  150105005

 Roisin Gonsalves           150105009

Case Study:

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


Toyota Motor Corporation (TMC) is one of the most famous cars manufacturing in the world, which produces automobile with good quality and meets customers’ requirement in terms of the diversity preference with reasonable price. In 1988, Toyota Motor Manufacturing attempted to expand the business area to build cars in North America and began producing in Georgetown with a yearly capacity of 200,000 Toyota Camry Sedans. During this period, the new Camry occupied 1/3 of the total American Car market and had 17% earning before tax margin due to more than 20 % sales growth in 1992. However TMM was facing problems regarding to the seat supply and the line utilization rate was below target as increasing number of cars with defective seats or no seats in the line as well as the growing demand in varieties.

Toyota Production System

To identify the waste in the process by two principles:        


Just In Time (JIT) production


  • Consistent with true production needs
  • Otherwise: Waste
  • Value-addition
  • Emphasis on quality
  • Stop producing when problems were defected
  • Otherwise: Waste

Advantage: Reduce cost & avoid overproduction

Advantage: Avoid further damage as the production line will stop when pulling and on cord


1. Seats need to be matched with each particular car; however, stock parts cannot be used in manner time.

There is an option to stop the line until the replacement seat is available that lead to the massive productivity losses. Moreover, KFS delivers seat replacements twice a day, but sometimes, they still send incorrect seat replacement. As a result, the replacement seat cannot be installed in a timely manner that leads to several four –day old vehicles in the overflow parking area.

          Let’s look at the Run Ratio Changing affecting to “ Lost Cars Per Shift “.

On April 27th the run ratio was down from 95% to 85%. ( 10%)

Stations on conveyor line


Team members


Average wage




Shift duration

525 mins

Cycle time

1.05 cars/min

 A line cycle time of 57 seconds

Productive shift mins


Run Ratio


473 (1.05x450=472.5)

95%  (450/473)


85% (402/473)


Shortfall of cars

Per shift


Cost per hour for overtime


Time required for additional car


( 1.05 x 48 cars)

Cost for producing for additional car




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