Florence, Kentucky, February 24, 2011
Toyota. The word has long since acquired a meaning beyond the company it names. It has come to designate a philosophy and approach to manufacturing that facilities around the world seek to integrate, implement and benefit from. It represents a methodical approach to quality that results not only in improved goods, but more productive and cost efficient processes. Still, when the average person hears Toyota, there is an immediate association with the automobile manufacturer, though the company makes more than just cars.
In 1956, Toyota began manufacturing lift trucks and offering them in its home market of Japan. A little over a decade later, it sold its first unit in the United States. The following decades saw considerable innovation and expansion in this business area and growth eventually led the company to consider the benefits of manufacturing closer to its North American end users. In 1990, Toyota opened the doors on a world-class manufacturing center in Columbus, Indiana.
Within a decade of bringing manufacturing to the United States, Toyota had produced 100,000 lift trucks. Its Indiana facility houses two divisions, TIEM (Toyota Industrial Equipment Manufacturing) and TMHU (Toyota Materials Handling USA), that work in tandem to provide manufacturing and sales and service, respectively. By 2002, the company gained the leading market share for lift trucks in the United States, with 99% of the Toyota lift truck sold in North America being manufactured here as well. The timing of the company’s ascent is largely credited to its response to a challenging economy.
“We are absolutely committed to avoiding layoffs,” says Fred Williams, Customer Center & Service Training Manager at TMHU. “We take an inhale-exhale approach to economic troubles. When a recession hits, the common sense approach for many manufacturers is to scale back production and reduce their workforces. Instead of doing that, we look at operations that are currently being outsourced and determine which of them can be brought in house.”
When demand ebbed in 2001, Toyota evaluated multiple areas where products or processes had been outsourced, to companies ranging in location from the same city to the other side of the world. After identifying several key prospects, the company established multiple new subassembly lines and brought work in house. This capitalized on the company’s labor and helped to increase margins to make up for decreased demand. It also left the company in an incredibly strong position competitively.
“We knew the market would rebound in 2002 and when it did, it took off like a rocket,” says Mr. Williams. “A lot of our competition was mired down with rebuilding their workforces, while we had been bringing things in and refining our processes to be even more efficient. We were ready for the additional volume and it positioned us to capitalize immensely.”
Throughout the current recession, Toyota has adopted the same approach, investing in new technology, bringing processes in house and constantly looking for ways to improve efficiency and productivity. In recent years, the company has invested in seven Mazak machines produced at the machine tool builder’s plant in Florence, Kentucky.
“Working with Mazak makes a lot of sense to us, as we are very similar in several ways,” says Mr. Williams. “We both have Japanese parent companies that recognized the importance of manufacturing in the US if we were going to provide the market with the best products and services. We both use a pull system of production, where products are only manufactured once an order is received and a substantial percentage of them require customization. And we’re both highly dedicated to quality, of course.”
Another reason for the selection of Mazak as a supplier is Toyota’s need for incredibly high levels of reliability. In many ways, the lift truck manufacturing facility resembles one of Toyota’s automotive production lines. Three separate assembly lines are responsible for production of tow tractors, large trucks with a maximum lift capacity of 17,500 lbs and the company’s most successful product category, mid-size electric and internal combustion trucks with lift capacity ranging from 3,000 lbs – 6,500 lbs.
Mazak machines can be found both on the main product lines, as well as the subassembly lines that feed them. If any piece of equipment on the line goes down, the effect is immediate. Each section of production is assigned a theme song, ranging from “Mary had a Little Lamb” to “It’s a Small World” and when any piece of equipment stops operating, anyone nearby has an instant audio cue as to what has happened. Because the company builds to orders, very little safety stock is kept on hand. An issue that takes several hours to resolve could threaten to shut down the main production line, making reliability and service response areas of supreme importance when investing in equipment.
One of the more unique integrations of Mazak equipment occurs directly on the main assembly for mid-size lift trucks. Toyota purchased two VTC-200C (Vertical Traveling Column-200C) machining centers with fixed tables and traveling columns. Even though the size of the table is 154.3” x 20.1”, the fixed-table design accommodates even longer parts via removable panels on both ends of the machine that allow workpieces to overhang from the worktable. Providing this freedom of movement enables the machining of any area of very long parts. Toyota took full advantage of the VTC-200C’s design, removing the panels on both sides of each machine and installing a conveyor system that runs across the fixed table. Lengthy mast components for the lift trucks pass entirely through the machines, stopping for several cutting operations, and then continue down the line to a welding station.
This customized installment would not work with traditional chip removal, so it takes a unique approach, whereby chip conveyors are located below the workspace and feed a larger conveyor located in the floor beneath the machines.
While reliability is imperative, cost savings must also be demonstrated to justify selection of and investment in new equipment.
“Every time we purchase a new machine, we do a comparison study on equipment from three to five builders,” says Sam Wimer, Production Engineer at TIEM. “We look at reliability, performance, quality of service and ability to stick to a strict delivery schedule. Then we evaluate if there’s a cost justification to make the purchase.”
In one such decision, Toyota was considering a new machine for production of chain wheel supports. A Mazak QTN 250-II M (Quick Turn Nexus) turning center with a rotary tool spindle, along with options from two other builders. The QTN 250-II M achieved the lowest cycle time. Combined with the domestic production of the machine, Toyota was convinced it was the best option. A cost justification evaluation revealed it would save 6.47 hours of production per day at a value of $22.05 per hour. This exceeded the cost of the machine, so the purchase was made.
“The fact that Mazak builds machines in the United States is huge for us,” says Mr. Wimer. “We are very demanding when it comes to installations and support. For equipment replacements, we have to have installation during one of our five-day shutdowns in either July or December. If we’re ordering a machine from overseas and it has to spend a month on a boat to get here, it’s just not a fast enough response. By using production on demand in Kentucky, Mazak offers a quick turnaround that can meet our needs.”
Today, Toyota remains the largest lift truck manufacturer within the United States, though the employees at the company are quick to divert attention from the fact, saying that celebration of past achievements diverts focus from the unending quest to be better. The Indiana plant recently did allow itself a moment to pause and commemorate the dual milestones of its twentieth year of operation and 350,000th lift truck produced. As the economy continues its way towards a recovery, the people at TIEM and TMHU are optimistic, looking forward to truly capitalizing on the strengthening of their competitive advantage during the downturn.