A few weeks ago we posted a video of how Toyota engineers helped a New York City food bank optimize how it packs boxes of food to be distributed to families still displaced from Hurricane Sandy. Now the New York Times has a more detailed story of how Toyota Production System Support Center has worked with various parts of The Food Bank for New York City (In Lieu of Money, Toyota Donates Efficiency to New York Charity, Jul 26). It turns out that packing boxes is only one project out of many.
One of the more interesting projects is speeding up how quickly clients can be seated for dinner at a Harlem soup kitchen.
Toyota’s engineers went to work. The kitchen, which can seat 50 people, typically opened for dinner at 4 p.m., and when all the chairs were filled, a line would form outside. Mr. Foriest would wait for enough space to open up to allow 10 people in. The average wait time could be up to an hour and a half.
Toyota made three changes. They eliminated the 10-at-a-time system, allowing diners to flow in one by one as soon as a chair was free. Next, a waiting area was set up inside where people lined up closer to where they would pick up food trays. Finally, an employee was assigned the sole duty of spotting empty seats so they could be filled quickly. The average wait time dropped to 18 minutes and more people were fed.
Why do I like this example? (more…)
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So how many different radiator models does a global car company need? Clearly it needs enough to accommodate different sized engines and cars. A big pick up with an over-sized cylinder eight-engine is going to need something different from a subcompact with an under-sized four-cylinder engine. But does that translate to twenty-something radiator designs or ninety-something?
Bloomberg reports Toyota has been thinking about this question for radiators and other car parts (Toyota Airbag Cuts Create Opening for Overseas Suppliers, Jun 10).
In one of President Akio Toyoda’s biggest initiatives since taking over in 2009, the carmaker is winnowing the number of parts it uses and increasing common components across models. The plan will cut both the time and cost for creating new models by as much as 30 percent, according to estimates from Toyota. …
In the past, Toyota focused on developing custom parts. It needed 50 types of knee-level airbags because seats for various models had different profiles. By standardizing “hip heights,” as the automaker calls it, across models, Toyota says it can reduce knee airbag variants by 80 percent.
As of last year, the automaker had slashed radiators to 21 models from about 100, according to Shinichi Sasaki, Toyota’s global purchasing chief. And the company is reducing the number of cylinder sizes in its engines to six from more than 18 by 2016, the Nikkan Kogyo newspaper reported June 4. Toyota declined to comment on the report.
“From now on, Toyota will seek the compatibility of certain parts it uses with standard parts used by many automakers globally,” the company said in a statement outlining its Toyota New Global Architecture, or TNGA, in March.
Some of the anticipated benefits here are fairly obvious. For example, the article mentions that standardizing parts like radiators that customers don’t care much about (beyond knowing that the car has one) will free up engineering time to work on body or cockpit design that customers do care about. Similarly, many of the implementation challenges (such as standardizing hip height) are fairly clear. Customers may not care about knee-level airbags per se, but standardizing those means standardizing some aspect of the interior design. Customer may or may not notice.
The most interesting part of this to me is its implications for supply chain risk. (more…)
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Posted in Auto Industry, global operations, Lean Ops, Manufacturing, process improvement, tagged Auto Industry, global operations, Lean Ops, Manufacturing, Toyota on December 2, 2011 |
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It is hard to feel sorry for Toyota. It is a mammoth corporation and a force in its industry. Still the Japanese automaker has been going through a rough stretch. Some of its problems are surely of its own making (e.g., quality issues and recalls), but others are largely beyond its control (e.g., turmoil in the world economy). One item in the latter category is the appreciation in the yen (see the graph at right).
As the Wall Street Journal reports (For Toyota, Patriotism and Profits May Not Mix, Nov 29), Toyota despite years of building factories in the US and elsewhere still has a larger share of its production capacity in Japan than its main domestic rivals. Given a weak Japanese market for new cars, Toyota would have to export heavily from Japan in order to make good use of that capacity.
How has Toyota responded to this challenge? In part they have been using innovative ways to decrease the size and cost of assembly plants. Check out this spiffy graphic:
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If you buy a Japanese built Toyota, where would you expect the final bit of assembly to be done? Would you believe Newark?
The New York Times had an article on the process of receiving imported cars (Far From the Factory, Adding Final Touches, Sep 25). What is unsurprising is that car makers have processes in place to check for and repair any damage that occurred during shipment. What is a little unexpected is that they do some additional work to customize cars such as installing Bluetooth systems or putting on roof racks (see the picture at left).
Toyota’s 98-acre operation at Newark’s port is something of a scaled-down assembly plant, though the work — adding a range of so-called port-installed options into 21 different models — is done largely by hand using simple tools, not by industrial robots controlled by computers. About 185 employees work in Toyota’s car wash, quality control center and five production shops here.
By adding items like floormats and GPS systems at its distribution centers instead of at its factories, Toyota gives customers a chance to tinker with their orders until just two days before the vehicles dock in Newark. And it gives dealers a way to stand apart from their competitors.
“We want to tailor the vehicle to what the customer wants,” said Bill Barrett, the national logistics manager at the Newark location. “We build the car they want.” …
The work would grind to a halt without Rui Sousa, whose job it is to order accessories daily from suppliers, based on expected needs in two days’ time. The key, he said, is limiting the volume of accessories for unpopular cars or those that are undergoing model changes, while keeping enough on hand for more popular cars.
“We’re trying to find the right balance,” said Mr. Sousa, who has honed his orders so finely that the amount of just-in-time inventory has been cut by about two-thirds during the last four years.
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Posted in Auto Industry, global operations, Operations Strategy, Supply Chain, Supply Chain Risk, tagged Auto Industry, Manufacturing, Merck KGaA, Operations Strategy, Supply Chain, Supply Chain Risk, Toyota on September 29, 2011 |
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A few weeks ago we had a post on how Toyota is revamping its supply chain in anticipation of the next natural disaster. Now the Wall Street Journal has a story on how an auto supplier is trying to recover from March’s earthquake (Quake Still Rattles Suppliers, Sep 29).
Take, for example, the tussle over a pearl-luster pigment called Xirallic that makes car paint sparkle. Merck KGaA produces 100% of the global supply at a factory in an area of northeastern Japan that was hit hard by the quake, forcing a temporary suspension of operations. The German company said it caught up on back orders Sept. 1, after reopening the factory in May, and remains committed to manufacturing in Japan. …
The closure of Merck’s Onahama, Japan, plant for two months after the March 11 quake set off a search for scarce stockpiles or substitutes. Many of the world’s auto makers, including Toyota, Nissan Motor Co., Ford Motor Co., Chrysler Group LLC, Volkswagen AG and General Motors Co., used metallic paints made with Xirallic, an aluminum-oxide-crystal compound, for at least some vehicles in their product lineups.
The acute Xirallic shortage nevertheless illustrates how much the global auto industry came to rely on just a handful of producers for key components and materials, many of which are made in Japan. The post-quake crisis has prompted auto makers to seek ways to diversify their supply chains for critical components, which ranged from humdrum rubber O-rings to advanced semiconductors. …
Many auto makers had been surprised to find their standard two-supplier rule for critical parts had been circumvented further down the supply chain. As a result, “traceability” of lower-tier suppliers has become an industry watchword following the earthquake, a senior Toyota executive said.
So Merck is effectively now being vilified for being really good. They had a great product and delivered reliability. As long as they did that, no one cared that everything came from one factory. Indeed, it may have had some advantages in having just one production location since this would allow for economies of scale and assured consistent production processes. (more…)
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Virtually every automaker took a significant hit when an earthquake and tsunami hit Japan back in March. (We have several posts on this.) What surprised many people — even to some in the auto industry — was that even non-Japanese firms suffered. Several firms did not find out until too late that a supplier to a supplier was dependent on components that could only made in one plant and that plant was unfortunately in the affected area. One would obviously hope that firms would learn from the Japanese crisis and try to keep such disruptions from happening again.
Toyota has been working on a plan to reduce their exposure to such disasters with the aim of being able to recover to full production in two weeks instead of the six month slog they went through this time (Toyota aims for quake-proof supply chain, Sep 6, Reuters). Toyota’s is focusing on three steps to reduce their exposure.
The first is to further standardize parts across Japanese automakers so they could share common components that could be manufactured in several locations, he said.
The second step is to ask suppliers further down the chain to hold enough inventory — perhaps a few months’ worth — for specialized components that cannot be built in more than one location, or take anti-quake measures that guarantee safety against any tremor or tsunami, he said.
This was to prevent a repeat of what happened this time with Renesas Electronics Corp, whose production of certain microchip controller units (MCUs) is still seen a few weeks away from full restoration.
Part of the second step would involve developing technology that would provide more options for parts and materials, such as substituting rare earths found mostly in China.
The third step to becoming more resilient was to make each region independent in its parts procurement so that a disaster in Japan would not affect production overseas.
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This week brought some possible good news for Toyota. The Wall Street Journal reports that the Transportation Department has studied data from a number of Toyota’s involved in crashes that supposedly were caused by sudden acceleration and found that “throttles were wide open and the brakes weren’t engaged at the time of the crash” (Early Tests Pin Toyota Accidents on Drivers, Jul 14). That suggests that these crash were due to human error and not faulty product. The appropriate question then is not “what did Toyota screw up?” but “should dad still be driving?”.
Driver error has been the industry’s default answer to all sudden acceleration complaints for over two decades. The data that the Transportation Department is looking at comes from “black box” recorders in Toyotas that record the state of the vehicle at the time of the crash. As a lawyer who is suing Toyota in cases related to sudden acceleration points out that Toyota has consistently claimed that these black boxes are not reliable and just prototypes so the Feds’ findings are likely not the end of the story here.
Which brings us to another piece of news. Toyota has announced that it is stretching out and tweaking its development process (Toyota Is Changing How It Develops Cars, Jul 5, WSJ). The time component here is the easiest to focus on but I am not sure it is where the meaningful changes are. The Journal reports that they are going to take a whole four — count ‘em 4! — weeks on the revised Avalon. I think what is more important is that Toyota is going to do more of the design work themselves.
The company is also working to bring development work that had been sourced to outside engineers back inside. Some outside engineers actually work side by side with Toyota’s engineers inside Toyota research and development centers. But using contractors has led to a breakdown in communication and potential misunderstandings, Mr. Stephens said.
A senior Toyota engineer said the company uses outside engineers to do about 30% of its development work globally and seeks to reduce the ratio to 10%. Toyota spokeswoman Cynthia Mahalak, of the Toyota Technical Center, said she couldn’t confirm the ratios.
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