Jacob Muscianese

MAN 4504
Operations and Supply Chain Management
Professor Walsh
Toyota Chassis Case Study
In the early 2000’s, Toyota Motor Manufacturing Macon, Georgia (TMMGA)
operation was going through what some would call a rough patch. This series of events ended
with a crisis in 2004 where the Surprima chassis production was both slow and ineffective.
There was not just one problem that caused the crisis for Toyota in 2004. In fact, both Toyota
and ChassisCo share part of the responsibility for what happened that year.
For years the TMMGA assembly plant was the top in the nation and even received
awards in quality making them one of the top in the nation. When it came to 1993, they were
concerned about producing the chassis for the newer models. Since building the rear
suspension chassis was a difficult process and space at the TMMGA plant was already
constrained, Toyota needed to look somewhere else to outsource the work. They eventually
chose ChassisCo to be the ones responsible for the Suprima chassis.
The first 5 years of working for Toyota was great for ChassisCo with a quality award
in 2002. The Suprima rear suspension cradle contract was the first job ChassisCo had with
Toyota and they were unfamiliar with how Toyota operated. But the team at ChassisCo was
well equipped and ready for what they had coming. ChassisCo was not only successful with
the 1997 Suprima but they also found success with the 1999 Responsa. So it makes sense that
they were excited for the 2003 Suprima launch but little did they know that things were about
to take a turn for the worst.
Since the crisis in 2004 was both parties' responsibility, let’s start by talking about
how ChassisCo was a contributor to the story. For the 2003 Suprima launch, Toyota felt
confident in giving ChassisCo project management control. As it turns out, they lacked these
necessary skills and to add onto the struggles, ChassisCo did not have the proper resources
for the launch. Walt Bernstein, Director of Production Control for TMMGA, said “we failed
to recognize how much more TMMGA needed to do to make the ChassisCo Athens plant
successful, particularly in the areas of quality certification and inventory management”. They
did not realize how far behind ChassisCo’s skills were in relation to what Toyota was asking
them to do.
ChassisCo also did not have the proper resources to support the 2003 Suprima launch
and both parties were slow to realize this. Bob Curtis, ChassisCo’s Program Manager for the
2003 Suprima launch, said “No matter how loud I yelled, I could not get the resources I
needed to support the Suprima launch in Athens”. Since they were unable to keep up with the
requirements set in place by Toyota and lacked the resources needed, ChassisCo had to
sacrifice the quality of the parts in order to meet production. Even though they were not able
to meet production goals at the start up anyways.
All of the blame does not fall on ChassisCo though. A big part of the responsibility
for the crisis in 2004 was caused by Toyota themselves. Toyota was unaware that ChassisCo
was not ready for this assignment and they continually put more stringent requirements on the
production. TMMGA was responsible for training the ChassisCo plant in Athens so the lack
of necessary skills is the fault of Toyota for lackluster training and performance. When
Toyota would give them resources, it would be something that ChassisCo had never worked
with before, so they had to spend time learning how to use these tools. This causes a big
problem in production since they have to meet the goal by a certain deadline. TMMGA
needed to spend more time training the members at the Athens Plant in order to ensure the
production of the 2003 Suprima would go smoothly. ChassisCo team members were not up to
speed on how production would flow and how the skills would impact the product.
Since the underlying problems of the crisis are based in the ChassisCo plant in
Athens, resolving the problem starts with this plant. In late 2004, Walt Bernstein spent much
of his time at the Athens facility. He would visit the plant at least twice per week and help the
members identify problems and develop checklists for what to do. ChassisCo needs someone
to step up and lead the team to success. They need leadership and someone with the
necessary skills to complete the project. Going into the year 2004, they were far behind and
bleeding money. They have continued putting workers into the Athens facility and barely
seeing progress being made.
If I were in charge of the ChassisCo plant in Athens, I would delegate the staff that I
have been given. Since Toyota continually brings in new members for this branch, it should
be easy to delegate the people into different teams based on skills and necessary tasks. The
branch needs a strong leader to show them how to properly take on a massive project by
themselves.
Solving the problem for Toyota is a more difficult solution. Toyota has been spending
and spending to try and fix the money pit in Athens. In order to solve this issue, they will
most likely have to raise prices in order to cover the additional costs. Not only does Toyota
face the issue of price but they are also struggling with the quality being delivered out of the
Athens facility. Toyota can either spend more time and money at the branch and hope for a
magical turn or they can dump the effort, move somewhere else and try to catch up. There are
not many options as I see things and Toyota needs to act fast to stop the bleeding.
If I was in charge of Toyota in this scenario, I would continue trying to fund the
Athens facility and communicate with them more. It seems like a lot of the problems are
simply caused by poor communication skills. The team at Athens has poor resources and they
are not trained well enough with the resources they do have. As the person in charge, I would
send qualified individuals to the Athens plant and show the people in charge over there how
things can be done more effectively and efficiently. Again this scenario can be fixed with
proper leadership and understanding both sides of the situation.
Fixing the issues with the Suprima Chassis from 2003-2004 is not going to be an easy
solution. Both sides of the situation are going to need to work together and fix the crisis that
is in front of them. They both need a leader to show the correct path and teach those around
them. ChassisCo has worked well for Toyota in the prior years so fixing the problem could be
something as simple as going back to what worked for them in the past.