Toyota Production Control Regarding Production Planning and Scheduling

Interview on August 21, 2008, with David Burbidge,Vice President of Production Control,Toyota

The purpose of the interview was to discuss the role of production control regarding production planning and scheduling.

David Burbidge described how the production plans are adjusted to accommodate both minor hiccups in the production process as well as a major shift in demand. When a minor hiccup happens, the selectivity lanes at the paint shop and some inventory at the assembly line play a role to recover the schedule. At the paint shops, the mix of vehicles is adjusted to restore a smooth sequence. In order to do that effectively, the Yamazumi charts for each variant (i.e., charts that show the planned cycle times for each process) are used to ensure that associates do not get overburdened and thus guarantee quality. In addition, assembly buffers at the end of each line enable production smoothing.

David then discussed the major rescheduling that took place in the case of the Toyota sports utility vehicle, the Sequoia. This SUV was launched with an annual volume estimate of 103,000. Most people at Toyota felt that the demand for the first year would be very high, but soon this volume was cut to 78,000 then 72,000. Sales revised it again to 66,000 before launch. The actual looked to be closer to 35,000, thus leaving 175 days of supply for the vehicle. As David described the situation, it appeared to be the perfect storm. Just as Toyota launched the new SUV, consumer sentiment for these larger cars had turned, and the SUV was viewed as disreputable—shunned by the public (like, say, a fur coat) as an inappropriate purchase during a period of high fuel prices and global warming.

A decision was made to stop production of the Sequoia for three months. When such a determination is made, the recent suppliers are compensated financially. Strategic suppliers help out Toyota by sharing the pain. Sequence suppliers also get some help. The system has to plan both shutdown and startup to ensure that quality is maintained. Some of the employees are shuttled to other Toyota plants around the country to replace temporary workers. David remarked that this was new territory for Toyota—it had seen a growing market in the United States for 20 years and North America used the capacity in Japan as a buffer to ensure stable U.S. production.