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Focus of the Final Paper
The final assignment for the course is a Final Paper on two cases. The Final Paper should demonstrate understanding of the reading as well as the implications of new knowledge. The eight- to ten-page paper should integrate readings and course discussions into work and life experiences. It may include an explanation and examples from previous experiences as well as implications for future applications.
Read the case study at the end of Chapter 15 and the case study at the end of Chapter 16, and thoroughly answer all the following questions. Supplement your answers with scholarly research using the Ashford Online Library. Each case study should be addressed in four to five pages, resulting in a combined Final Paper of eight to ten pages.
Chapter 15 Case Study: The Realco Breadmaster
Develop a master production schedule for the breadmaker. What do the projected ending inventory and available-to-promise numbers look like? Has Realco “overpromised”? In your view, should Realco update either the forecast or the production numbers?
Comment on Jack’s approach to order promising. What are the advantages? The disadvantages? How would formal master scheduling improve this process? What organizational changes would be required?
Following up on Question 2, which do you think is worse, refusing a customer’s order upfront because you don’t have the units available or accepting the order and then failing to deliver? What are the implications for master scheduling?
Suppose Realco produces 20,000 breadmakers every week, rather than 40,000 every other week. According to the master schedule record, what impact would this have on average inventory levels?
Chapter 16 Case Study: A Bumpy Road for Toyota
Is Toyota’s focus on quality consistent with the Lean philosophy? Can a firm actually follow the Lean philosophy without having a strong quality focus? Explain.
Who are the “coordinators” referred to in the article? What role have they played in educating Toyota’s workforce in promoting the TPS (Toyota Production System) philosophy? Why are they so hard to replicate?
According to Hajime Oba, what is wrong with Detroit’s approach to Lean? Based on your understanding of American auto manufacturers, do you agree or disagree?
There is an old saying “Haste makes Waste.” How does this apply to what is happening in the Georgetown plant? What is Toyota doing about it?
Writing the Final Paper
The Final Paper:
Must be eight to ten double-spaced pages in length, in addition to the title page and reference page, and formatted according to APA style as outlined in the Ashford Writing Center.
Must include a title page with the following:
Title of paper
Student’s name
Course name and number
Instructor’s name
Date submitted
Leave the title page blank and I will fill it in.
Must begin with an introductory paragraph that has a succinct thesis statement.
Must address the topic of the paper with critical thought.
Must end with a conclusion that reaffirms your thesis.
Must use at least four scholarly sources, including a minimum of two from the Ashford Online Library.
Must document all sources in APA style, as outlined in the Ashford Writing Center.
Must include a separate reference page, formatted according to APA style as outlined in the Ashford Writing Center.
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CASE STUDY end of Ch 15
THE REALCO BREADMASTER
Two years ago, Johnny Chang’s company, Realco, introduced a new breadmaker, which, due to its competitive pricing and features, was a big success across the United States. While delighted to have the business, Johnny felt uneasy about the lack of formal planning surrounding the product. He found himself constantly wondering, “Do we have enough to meet the orders we’ve already accepted? Even if we do, will we have enough to meet expected future demands? Should I be doing something right now to plan for all this?”
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To get a handle on the situation, Johnny decided to talk to various folks in the organization. He started with his inventory manager and found out that inventory at the end of last week was 7000 units. Johnny thought this was awfully high.
Johnny also knew that production had been completing 40,000 breadmakers every other week for the last year. In fact, another batch was due this week. The production numbers were based on the assumption that demand was roughly 20,000 breadmakers a week. In over a year, no one had questioned whether the forecast or production levels should be readjusted.
Johnny then paid a visit to his marketing manager to see what current orders looked like. “No problem,” said Jack Jones, “I have the numbers right here.”
WEEK
PROMISED SHIPMENTS
1
23,500
2
23,000
3
21,500
4
15,050
5
13,600
6
11,500
7
5400
8
1800
Johnny looked at the numbers for a moment and then asked, “When a customer calls up, how do you know if you can meet his order?” “Easy,” said Jack, “We’ve found from experience that nearly all orders can be filled within two weeks, so we promise them three weeks. That gives us a cushion, just in case. Now look at weeks 1 and 2. The numbers look a little high, but between inventory and the additional 40,000 coming in this week, there shouldn’t be a problem.”
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QUESTIONS
1.
Develop a master production schedule for the bread-maker. What do the projected ending inventory and available-to-promise numbers look like? Has Realco “overpromised”? In your view, should Realco update either the forecast or the production numbers?
2.
Comment on Jack’s approach to order promising. What are the advantages? The disadvantages? How would formal master scheduling improve this process? What organizational changes would be required?
3.
Following up on Question 2, which do you think is worse, refusing a customer’s order upfront because you don’t have the units available or accepting the order and then failing to deliver? What are the implications for master scheduling?
4.
Suppose Realco produces 20,000 breadmakers every week, rather than 40,000 every other week. According to the master schedule record, what impact would this have on average inventory levels?
_______________________________________________________________________________________
CASE STUDY end of Ch 16
A BUMPY ROAD FOR TOYOTA9
By many measures, Toyota is still barreling along. The company’s net income of $10.49 billion in yen in the year ended March 31 [2004] not only exceeded those of rivals General Motors Corp. and Ford Motor Co. combined, but set a record for any Japanese company. Toyota’s next big goal is to expand its share of the global market to 15% over the next decade, from 10% now. That would make Toyota roughly the same size No. 1 auto maker GM is today.
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But there are signs that the company’s ambitious growth agenda is straining human and technical resources and undercutting quality, one of Toyota’s most critical strategic advantages. It is the kind of paradox many highly successful companies face: Getting bigger doesn’t always mean getting better.
Toyota still tends to outscore most rivals, including Detroit’s Big Three auto makers and European brands, on industry surveys of quality and reliability. But Toyota’s lead has narrowed and in certain key segments disappeared. “Toyota quality isn’t improving as fast as it should,” Toyota’s president, Fujio Cho, concedes in an interview. To stop the quality slide, Mr. Cho says Toyota has launched multiple “special task forces” at trouble spots in places such as North America and China to overhaul shop-floor management. Toyota also has established a Global Production center in Toyota City to train midlevel factory managers so they can more effectively run plants outside Japan. Toyota now is re-evaluating some of its most fundamental operating strategies. “We are getting back to basics,” says Gary Convis, a Toyota managing officer, who is also president of the Georgetown plant.
An important part of that effort focuses not on machines or high-speed information technology, but on replicating a special class of people who were instrumental in making Toyota a manufacturing powerhouse during the past 25 years. When Toyota first began opening factories in the U.S. in the mid-1980s, kicking off its dramatic global expansion, some of the most important people in the new plants weren’t top executives, but midlevel Japanese managers commonly known as coordinators. These coordinators were experts in Toyota’s Lean-manufacturing techniques and philosophies, commonly known as the Toyota Production System, or TPS. These coordinators, usually with 20 or more years of experience, generally shunned classrooms. Instead they trained American shop-floor managers and hourly associates by attacking issues directly on the assembly line.
9N. Shirouzu and S. Moffett, “As Toyota Closes in on GM, Quality Concerns also Grow,” The Wall Street Journal, August 4, 2004.
The principles behind Lean production took shape over five decades, starting with efforts in the 1930s by one of the company’s founding fathers, Kiichiro Toyoda. The Toyota system took its current form during the 1950s with the leadership of Taiichi Ohno, a legendary Toyota engineer who drew inspiration from a trip to the U.S. during which he watched how a supermarket stocked its shelves using a just-in-time delivery of goods.
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Mr. Ohno preached there are seven forms of muda, or waste, in any process. When Mr. Ohno trained recruits to Toyota’s elite Operations Management Consulting Division, he drew a chalk circle on the floor in front of a process on the assembly line and told the trainee to watch that job until he could identify how it could be improved. A trainee could stand for nearly a day before he was able to satisfy Mr. Ohno with his answer.
When Mr. Ohno began applying his production approach full-scale, Toyota factories achieved huge gains in productivity and efficiency. The marriage of efficient production to an obsessive concern for quality helped Toyota establish a reputation for bullet-proof reliability that remains a huge competitive advantage. By the late 1980s, Lean production was a deeply entrenched way of life at Toyota, governing just about every aspect of its corporate activities. Hajime Oba, a retired TPS guru who still works for the company in North America on a project-by-project basis, likens the system to a form of religion. Managers at Detroit’s Big Three auto makers, he says, use Lean techniques simply as a way to slash inventory. “What [they] are doing is creating a Buddha image and forgetting to inject soul in it,” Mr. Oba says.
But as years went by, Toyota discovered that its corporate faith was getting watered down as the company spread its operations world-wide and hired generations of employees ever more distant from Mr. Ohno. A case in point is Toyota’s massive factory in Georgetown, Ky., the first plant the auto maker built in the U.S. from the ground up. Georgetown began production in 1986, and throughout the 1990s the plant routinely claimed the top spots in J.D. Power & Associates’ widely watched initial quality survey for cars sold in the U.S.
But after being named North America’s second-best plant in 2001 behind Toyota’s Canadian plant in Cambridge, Ontario, Georgetown has slumped. This year, it ranked No. 14, after placing No. 15 in 2003 and No. 26 in 2002. Two GM plants in Michigan, the Lansing Grand River Cadillac factory and a large car plant in Hamtramck, and Ford’s luxury-car factory in Wixom, Mich., were North America’s top three plants this year.
One big problem that Georgetown faced all along has been language. Most of the Toyota-production-system masters speak fluently only in Japanese. Most of their American employees speak only English. The linguistic and cultural barriers make deep discussions on Lean production almost impossible and can cause other problems.
Another issue is time—or the lack of it. As sales of Toyota vehicles in the North American market took off, Toyota factories had to ramp up quickly to keep up with demand. That meant a plant like Georgetown had to rapidly promote American shop-floor managers and hourly associates, instead of nurturing them gradually in the Toyota manufacturing way and deepening their skills and knowledge.
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But by far the biggest headache at Georgetown now stems from a scarcity of TPS coordinators from Japan. As the auto maker stepped up the pace of factory openings globally, those expansion plans meant fewer coordinators for older, more established plants like Georgetown.
At Georgetown, one glaring symptom of trouble, its top executives say, is that some hourly assemblers began ignoring standardized work processes—considered one of the biggest sins inside Toyota plants because of the impact on the consistency and accuracy of manufacturing. Georgetown also lost some Lean-production masters to age and competitors. Kazumi Nakada, a TPS master, worked in tandem with Mr. Cho, the then-Georgetown president, to launch Georgetown in the mid-1980s. But Mr. Nakada left Toyota in 1995 to join GM, which was intensifying its efforts to catch up with Toyota in vehicle quality by copying its manufacturing methods.
To shore up Georgetown’s mastery of Lean production to a level where it could function without relying so much on Japanese TPS coordinators, the plant’s top management circle launched an emergency 18-month project in 2000 in order to gradually build back up the core of its front-line managers. The effort has since continued as a more formalized Organization Development Group.
Mr. Convis recruited Mr. Oba, the TPS guru, to help implement the Georgetown project. Among other issues, Mr. Oba found many shop-floor leaders would spend too much time in their offices, instead of prowling the factory floor coaching and leading kaizen projects with assembly workers. To shake things up, Mr. Convis and Mr. Oba dragged about 70 midlevel managers through projects at various Toyota parts suppliers for “real life” kaizen. The goal was in part to “embarrass the hell out of them” in front of suppliers whom they had been used to bossing around, says Mr. Oba, to highlight the need for them to learn more about TPS.
Still, in 2002, Georgetown suffered one of the biggest blows to its track record for quality. The plant began pumping out the new Camry sedan in the fall of 2001, and soon buyers began griping about the car’s spongy brakes and cup holders that interfered with the shift lever when a tall travel mug was placed in them. Long skinny plastic strips, called “Mohican molding,” that covered up weld marks on the car’s roof also sometimes peeled off, in part because of lack of testing.
Those problems helped to send the number of customer complaints about the quality of the new Camry soaring in the annual initial quality survey by J.D. Power. In 2002, the car had 117 problems per 100 vehicles and was the sixth-best vehicle in the survey’s “premium midsize car” category. Just two years earlier, in 2000, the Camry was America’s best vehicle in that segment.
The Camry’s initial quality ranking continued to decline to No. 7 in 2003 and No. 8 in 2004 despite the fact that the number of customer complaints declined, placing the car well behind rivals such as the Buick Century and the Chevy Monte Carlo. Now, with some rivals closing the gap in efficiency and quality, Toyota is scrambling to take Lean production to a new level—one that is simple enough to function without the constant help of Japanese coordinators with 20 years of experience or more in Lean production.
Epilogue
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In June 2007, J.D. Power released its newest initial quality ratings.10 The good news for Toyota was that for the entire brand, defects only averaged 112 per 100 vehicles. The bad news was that this tied Toyota with Jaguar for sixth place. The top five were Porsche (91 problems per 100 vehicles), Lexus (94), Lincoln (100), Honda (108) and Mercedes Benz (111).
QUESTIONS
1.
Is Toyota’s focus on quality consistent with the Lean philosophy? Can a firm actually follow the Lean philosophy without having a strong quality focus? Explain.
2.
Who are the “coordinators” referred to in the article? What role have they played in educating Toyota’s workforce in promoting the TPS (Toyota Production System) philosophy? Why are they so hard to replicate?
3.
According to Hajime Oba, what is wrong with Detroit’s approach to Lean? Based on your understanding of American auto manufacturers, do you agree or disagree?
4.
There is an old saying, “Haste makes waste.” How does this apply to what is happening in the Georgetown plant? What is Toyota doing about it?
______________________________________________________________________________________
This paper must be written in APA format with a reference page at the end. Please let me know if there are any other questions.
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