This will result in even more defects in the near term The 50000 investment

This will result in even more defects in the near

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with the wagon. This will result in even more defects in the near term. The $50,000 investment will resolve TMM’s problem with the Plastic hook and may justify the expense. Currently, the hook breaks about once per shift. Assuming two shifts per day and a five-day workweek, there will be approximately 500 breaks per year. Further assuming an internal rate of return of 15%, each replacement would have to exceed $15 to justify avoiding the $50,000. Statistics represent that this occurrence has significantly
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declined, most likely due to learning curve benefits. Furthermore, no problems have been reported in Japan where they have used the same design. Therefore, we do not recommend investing the $50,000 at this time. TMM could also change the seat supplier or get an additional supplier. Toyota generally prefers to resolve issues with its suppliers rather than just replacing them. Additionally, it would be challenging to find a supplier that is geographically closer than KFS.
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RECOMMENDATION & IMPLEMENTATION TMM should immediately implement the following measures: Designate an employee to manage seat correction and replacement and implement a one- shift requirement. In the same manner, have an employee check the seats at the arrival dock so those problems can be identified early. Also, to better monitor the trends, a designated area for vehicles with seat problems should be available in the overflow parking area to visualize the fluctuation in defects. Positively reinforce time limits on replacement seats and time limits on how long a vehicle can stay in the overflow parking area. If the limit is exceeded, a problem-solving meeting should be initiated. The supplier should be notified of defective seats as soon as they are discovered. Employees on the assembly line and in quality control should immediately inform KFS. These short-term measures are to address the current situation and should become obsolete when the underlying problems are resolved. Finally, actions should be introduced to revise current procedures in response to problems. QC personnel should be placed with KFS to analyze why so many defective seats are getting to TMM. In addition, an effective IT solution should be implemented to improve information flow and prevent problems and mitigate costs. IT should also be used to reorder seats that are defective or incorrect. Shutting down the line if a seat needs to be replaced is generally not recommended but the employees should be reeducated to follow the TPS philosophy and maintain high quality and volume.
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