Cycle time of 57 seconds and TMM’s FIFO pull process strategy along with JIT supply principles mean that KFS has no time to adjust capacity for demand variation. Thus its shipments are not doing enough to resolve TMM’s crisis. As run ratio decreased from 95% to 85%, cars produced per shift decreased by 47 cars. The
Implications of to sales loss is multifold for the company. 47 cars would have been produced by overtime capacity which increases the cost of production $16,217 for TMM. For a five day work week of 2 shifts, this amounts to $8.4 Million a year. Table 1 lists calculations resulting in these figures. Solution: We recommend what we consider is the most appropriate solution, i.e., TMM must assist KFS in transforming their production philosophy from managing capacity as to a fixed demand to TPS principles so they can keep up with fluctuating demand. We recommend they do so by lending expertise to KFS who can go into KFS facilities and train their employees while making appropriate infrastructure changes. This will improve production at TMM in the long run. TMM must also develop its system of identifying and communicating issues on the assembly line so manifestation of such complicated problems can are avoidable in the future. This will align TMM Georgetown with the core principles of TPS. For immediate improvement in production capacity, TMM must deploy quality check capacity possibly in the form of Quality check Officer at KFS facilities so they can make sure that shipments from KFS are not faulty. This will decrease the lag at the overflowing parking area and reduce the queue of cars waiting due to the incorrect delivery of seat assemblies. Alternatively, this can be accomplished by assembling quality check units at the arrival dock of TMM assembly plant so faulty assembly line of seats can be returned. However, we strongly recommend the former route because it saves the time of shipping and returning defective assemblies. We also recommend a kanban capacity for employees to alert the plant of issues in the production line. In particular, there is an urgent need for such an alarm that can facilitate quick reordering of seats when employees detect a faulty assembly in the line.
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- Fall '18
- Paul Nelson
- Toyota Production System, assembly plant, KFS, TMM