Alive and WellJIT thrives in its birthplace - Japan

TOYOTA CITY - If Toyota Motor Co. is rethinking the basics of "just-in-time" delivery at its North American plants - as some reports have indicated - it's hard to see evidence of it here in Japan.

If anything, kanban, a form of "just-in-time" delivery particular to Japan, is likely to increase in importance as the industry shifts away from "mass production" of vehicles to "mixed production."

Recent visits to the automaker's Takaoka plant in Aichi Prefecture and Miyata plant in Kyushu confirm that the system is alive and well. Changes are being made - constantly - but these changes are mostly to fine-tune the system in order to keep pace with developments in technology.

For instance, Toyota now employs an electronic form of kanban for part of its distribution and logistics requirements. This became essential in the early 1990s when the company opened two large plants outside of Aichi - Toyota Motor Kyushu Inc. in Miyata and Toyota Motor Hokkaido Inc. in Tomakomai.

Toyota Motor Hokkaido, in operation since 1992, makes automatic transmissions and aluminum wheels for the Japanese and U.S. markets. Toyota Motor Kyushu, which oversees Toyota's newest assembly plant in Japan, currently makes four models, including Lexus RX300 and ES300.

Shigetoshi Fujimoto, a senior plant official at Takaoka who is responsible for final assembly of the Vitz and Yaris, and soon the Echo, all new strategic models in the subcompact segment, says there has been no basic change in the kanban concept since its introduction in the early 1960s. And that concept, he explains, is to supply "only what is needed, when it is needed and in the quantity needed."

Still, Mr. Fujimoto warns that it is nearly impossible to match precisely components supplied with components used in production "resulting in the need to build flexibility into the system." Traffic congestion, inclement weather, a late surge in orders all impact on the daily production schedule and planning.

Merrill Lynch Japan analyst Takaki Nakanishi believes that Toyota eventually will have to overhaul its "just-in-time" system. "But the time hasn't arrived yet," he says, adding that it will not "until the industry makes a major shift to modular production." And no one knows when that might happen.

Others feel the automaker may be pressed to make changes sooner in the wake of new, more stringent clean air standards. The result: Toyota will have to reduce the number of trucks - which currently run in the thousands daily - that transport components to its assembly plants.

As things stand today, the line-side supply of most final assembly parts is still kept at a super "lean" 30 minutes, largely unchanged from a decade ago. And plant officials both at Takaoka and Miyata insist that as long as the company builds cars in the current monocoque fashion, this is not likely to change.

This does not mean, however, that Toyota suppliers deliver components and materials to the plant at 30-minute intervals. In fact, deliveries are made throughout the day at intervals as short as one hour, in the case of car air-conditioners and heaters, and as long as a day for wipers, seat belts and trim parts. Small, inexpensive parts such as fasteners and bolts are stored within the plant complex for several days.

In fact, at most Toyota auto plants in Japan, a portion of the assembly shop is set aside as a staging area for the supply operation. At Takaoka, for instance, one-fourth of the Vitz/Yaris assembly shop has been converted into an in-plant parts depot from which scores of logistics employees, operating with precision timing efficiency, bring 150 components to the line including modules like the fully dressed 1SZ-FE engine. Trucked 16 times a day from Daihatsu's Shiga plant, 62 miles (100 km) away, engines are counted as a single component.

Aisin AW Co. Ltd., which in December began production of automatic transmissions for the Vitz and Yaris at a new $420 million plant in Okazaki, 10 miles (16 km) south of Takaoka, makes eight shipments daily (four truckloads each) to Takaoka and the Nagakusa plant of Toyoda Automatic Loom Works, the second assembly site for the models.

At present Aisin AW, a joint venture between Aisin Seiki Co. Ltd. and Toyota, supplies around 350 transmissions per day to the Vitz/Yaris line at Takaoka and another 250 units to Toyoda Automatic Loom Works. The new Okazaki plant, which also makes car navigation systems, has capacity to produce 1,000 units per day on two shifts, or 20,000 units per month.

A senior Aisin AW official says there is no precise shipping schedule, though generally shipments are made twice each morning and afternoon (at around 9 a.m., 11 a.m., 3 p.m. and 5 p.m.). Frequency will increase in early summer with the addition of the Echo sedan to the Vitz/Yaris line.

Toyota's largest supplier, Denso Corp., literally makes hundreds of shipments each day to the automaker's assembly plants throughout Japan. Denso's Nishio plant alone dispatches 16 truckloads of air-conditioners and heaters to Takaoka, nearly one every hour, covering a distance of 15 miles (24 km).

Nationwide, the Nishio plant arranges for an estimated 200 truckloads daily just to Toyota and its affiliated assemblers. Besides Toyota, plant customers include Honda, Mitsubishi, Suzuki and Daihatsu; its major overseas customer is DaimlerChrysler.

Generally, suppliers outside of Aichi rely on warehousing facilities proximate to the assembly plant to ensure on-time delivery. For example, Matsushita Communication Industrial Co. Ltd. daily ships two large truckloads of audio systems from its Matsumoto plant in central Japan to a warehouse in Nagoya, a distance of nearly 100 miles. From that warehouse, the morning after delivery, the company dispatches four trucks to Toyota City, a distance of 15 miles, making scheduled stops at each of the automaker's main assembly plants.

The situation is almost identical at the Miyata plant of Toyota Motor Kyushu. The plant currently builds four models on three platforms - the all-wheel-drive RX300 (sold in Japan as the Harrier), front engine/front drive ES300 (the Windom in Japan) and the front-engine/rear-drive Mark II and Chaser. When the facility opened in 1992 it built the Mark II, Chaser and Cresta, all domestic models sharing a common platform.

Components from Toyota's home base in central Japan - representing nearly half of the plant's production requirements - are brought to Kyushu by ship. Weekly, the automaker ships close to 500 40-ft. trailerloads of parts including engines and transmissions from Toyota's Kamigo, Shimoyama, Tsutsumi and Kinuura plants. All together, it's more than 3,000 different parts from 100 suppliers.

These arrive on a pair of "roll-on/roll off" cargo ships owned by Toyo Fuji Kaiun, a Toyota-affiliated ship operator. Assembly parts are placed on pallets and squeezed into nearly 100 40-ft. trailers, the number transported per daily sailing. They are not organized into knockdown sets. Each container carries about 1.5 days' inventory of parts.

Daily, nearly 100 trailers are unloaded and transported to the plant, which is about 50 minutes away. Once they arrive, the trailers are kept outside in a loading bay. Line-side supply, much like Takaoka, is around 30 minutes. For the most part, the trailers return empty to the ship.

Suppliers based in Kyushu now number around 50 and include Araco Kyushu Corp. (a subsidiary of Araco Corp.) for seats, Bridgestone Corp. for tires, and Nippon Steel Corp. and Sumitomo Metal Industries Ltd. for steel stampings.

Generally, bulky and/or small, low-value parts (seats, carpet, headliners, bolts and fasteners) are sourced locally. An estimated 90% of body parts are stamped by Toyota Motor Kyushu in Miyata.

Denso, from its plant located 15 miles north of Miyata in Kitakyushu, supplies HVAC (heating, ventilating and air-conditioning) units. Denso officials claim that the production schedule is set three days in advance; Toyota informs the plant of the schedule by computer.

Daily, the Kitakyushu plant ships 12 truckloads of HVAC units and air-conditioners to Toyota Motor Kyushu (and six truckloads of heaters to Mazda Motor Corp. and Mitsubishi; three truckloads to each).

Toyota Motor Kyushu completes assembly of the HVAC unit on the plant's No. 2 trim line. Key components shipped separately to Miyata from Nagoya as part of Toyota consolidations include piping from Denso's Nishio plant and the HVAC controller from Kojima Press. The radiator is sourced from Denso's Hiroshima plant.

Denso's Kitakyushu plant keeps 1.5 days supply of assembly parts in a first-floor warehouse. In total, the facility stores 14,000 different parts including heater cores, evaporators and compressors for 70 different vehicles.

And unchanged since the early 1960s, a record of those various parts passes hands in the form of a paper tag or kanban. Ironically, several years before his death in 1990, Taichi Ohno, the Toyota executive credited with inventing the kanban system, predicted that the system's real benefits would not be realized until the industry moved into "mixed" or "variable" production. That age is now upon us.