Questions and Topics We Can Help to Answer
Paper Instructions;
Order Instructions
Readings (Required):
• Johnson, W.H.A. (n.d.). Toyota Motor Manufacturing Company Canada (TMMC): The Lexus RX 330 Line. Waltham, MA: Department of Management, Bentley College. http://polaris.umuc.edu/~jstewart/Amba620/TMMCCase_Final.pdf
• TPS Terms
• TPS Goals, Origins, Principles, Sharing, Workplace Management, Commonly Used Terminology
• TPS Vision, Philosophy, Concepts of Jidoka and Just-in-Time
• Toyota Unveils Revamped Manufacturing Process
• Toyota New Global Architecture to Debut This Year, Likely on the Prius
• Toyota Invests in Competitive Plants - Sustainable Growth Strategy, New Plant in Mexico, Expansion in China (15 April 2015)
Multimedia (Required)
• Knode, C.S. (2011) Decision tree video (setting up the problem): http://vimeo.com/duffer44/decision-trees-part-1. Download Transcript
• Knode, C.S. (2011) Decision tree video 2 (determining the value of perfect information valuation): http://vimeo.com/duffer44/decision-trees-part-2 . Download Transcript
• Knode, C.S. (2011) Decision tree video 3 (determining the value of imperfect information valuation): http://vimeo.com/duffer44/decision-trees-part-3 Download Transcript
This week there is a group assignment that applies several operations decision-making techniques in an international context, focusing on the Toyota Motor Company's North American Lexus production decision made a few years ago.
Toyota operations in Mexico are involved in this team assignment. Mexico is a very important trading partner of the US and a member nation of the North American Free Trade Agreement, which provides for duty (tariff)-free commerce among Canada, Mexico, and the USA.
Each group completes the tasks to be found in the Week 10 Assignment, deciding where and how Toyota should produce a particular Lexus model in North America, by the end of this week, in a succinct report that includes an executive summary.
Assignment Clarification:
To properly complete this assignment, it will be important for each team to consider the following points:
• Assignment Proper. Key to solving the assignment proper, possibly with supporting files, is to tackle its various parts one by one, fully answering each requirement. In this regard, don't get hung up on one exercise; move on to the next one. Do refer back to prior seminars or other courses (properly cited of course) if they included any of the quantitative techniques required here
• To remain motivated, remember that the overall learning goal here is to familiarize each team member with the OM techniques and concepts involved, not to make you a Toyota production planner
• Thus remember to explain the team's answers in succinct but good English, particularly if the team wishes to obtain an above-task grade
• Be sure to study all the assignment help materials that are posted here.
• Please mark your answers clearly in your assignment submission, so they can be easily found and identified.
Assignment Help Files:
Exercise 1
Toyota Motor Corporation (1998 ff). The Toyota production system. http://www.toyotageorgetown.com/tps1.asp
Exercise 2
Mind Tools. (n.d.). Grid analysis. http://www.mindtools.com/pages/article/newTED_03.htm
Exercise 3
Mind Tools. (n.d.). Decision tree analysis. http://www.mindtools.com/pages/article/newTED_04.htm
Knode, C.S. (2011) Decision tree video (setting up the problem). http://vimeo.com/duffer44/decision-trees-part-1
Download Transcript
Knode, C.S. (2011) Decision tree video 2 (determining the value of perfect information valuation).http://vimeo.com/duffer44/decision-trees-part-2
Download Transcript
Knode, C.S. (2011) Decision tree video 3 (determining the value of imperfect information valuation).http://vimeo.com/duffer44/decision-trees-part-3
Download Transcript
Exercise 4
Do online research on "Toyota production North America" and similar topics.
Consider contacting the Toyota Motor Company USA on these topics.
Assignment:
Team Assignment (10%): Planning Production for Toyota North America
Lexus RX 350, Successor in 2007 to the RX 330
Photo courtesy of Toyota Motor Company
Assignment Tasks
Address the following four exercises:
Exercise 1: Making a Critical Assessment of the Toyota Production System (TPS) Today
a. Demonstrate your team's basic understanding of the TPS by 1) defining in your team's own words any eight of the terms found athttp://www.toyotageorgetown.com/terms.asp, and 2) applying them to one or more of your team's own companies or other organizations.
For example, Pokayoke can be defined as an approach to create mistake proofing through use of devices that detect or prevent production errors. At a software development firm, pokayoke might be applied through use of a modular development process that includes extensive software module testing before proceeding to module integration and total system testing.
b. Describe the TPS as a total entity. What are its purposes? Its advantages? Its limitations? How is it now evolving? Is it getting better – or not? Has it been successfully copied by other motor vehicle manufacturers? Why or why not?
Exercise 2: Use of a Grid Analysis (Weighted Scoring Model) to Help Make the North American Plant Location Decision for the RX 330
This exercise illustrates how when deciding among two or more competing plant location options, various decision factors (which can typically be characterized as exogenous - in a company’s external environment - or endogenous - internal to the company) can be qualitatively identified, and how these factors can then be weighted to obtain an overall score for each competing location option.
a. List the factors your team considers key to the Toyota Motor Manufacturing Canada (TMMC): The Lexus RX 330 Line North American plant location decision, identifying these factors as either exogenous or endogenous, weighting them using your team's best judgment (stating any relevant assumptions or constraints), and assigning two scores to each factor: one for production of the Lexus RX 330 at TMMC, and one for production at a Toyota factory in the USA.
b. Using the scores from your team's weighted scoring model and working with regard to Ringo Sho and Nemawashi, make and support your recommendation for the RX 330 North American plant location - TMMC or a factory in the USA.
Exercise 3: Determining Production Capacity Needed at Toyota Motor Manufacturing of Canada (TMMC)
Decision trees are another important if challenging world-class operations management method which operations managers should understand and with which other managers should be familiar.
This exercise illustrates how using a decision tree, determination of an "optimal" production capacity option can be made from among several possible capacity options based on the provided probable market demand and expected costs/payoffs of events that influence the options.
It is spring 2000, and TMMC has indeed just been chosen to produce the new Lexus RX 330 line, with the first units deliverable in 2003. Toyota must now determine the amount of annual production capacity it should build at TMMC.
Toyota's goal is to maximize the profit from the RX 330 line over the five years from 2003-2007. These vehicles will sell for an average of $37,000 and incur a mean unit production cost of $28,000 (here, $ = the Canadian dollar).
10,000 units of annual production capacity can be built for $50M (M=million) with additional blocks of 5,000 units of annual capacity each costing $15M. Each block of 5,000 units of capacity will also cost $5M per year to maintain, even if the capacity is unused.
Assume that the number of units actually sold each year will be the lesser of the demand and the production capacity.
Marketing has provided three vehicle estimated demand scenarios with associated probabilities as follows:
Demand 2003 2004 2005 2006 2007 Probability
Low 10,000 10,500 11,000 11,500 12,000 0.25
Moderate 15,000 16,000 17,000 18,000 19,000 0.50
High 20,000 24,000 26,000 28,000 30,000 0.25
a. To maximize profit earned during this period, which production capacity should TMMC in 2000 decide to build - 10,000, 15,000, 20,000, 25,000, or 30,000 cars? Justify your choice.
You may use the following decision tree developed by Toyota operations analysts in Toyota City, Japan - or your group may choose to vary it in some way based, perhaps, on its presumed better local market knowledge.
b. What are the weaknesses or limitations in this analysis? How might they be corrected or at least reduced?
c. It is now late 2016. How well has the RX-330/350 actually done in the North American market? Is its quality rated as high as if it were made in Japan?
Do some online research; it's part of improving your attainment of Information Literacy, one of the UMUC MBA Competencies. Here see the Content/Week 10 references on Grid Analysis and Decision Trees
Exercise 4: Assessment of Toyota’s Current Regional Production Strategy
North America
Source:www.worldatlas.com/<wbr><wbr>webimage/countrys/na.htm,
a. After doing necessary research online or otherwise, document and evaluate the current distribution of Toyota production in North America. Here be sure to include Mexico.
b. Why does the team believe Toyota has chosen to produce its cars in the current manner? Has Toyota been wise, or not?
In effect, this exercise provides the team an opportunity to think ahead to the politico-socio-economic-technological considerations that will be quite important in DMBA 630.
