Harvard Business School

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Rev. September 5, 1995

Toyota Motor Manufacturing, U.S.A., Inc.
On the Friday before the running of the 118th Kentucky Derby, Doug Friesen, manager of assembly for Toyota’s Georgetown, Kentucky, Plant, was approaching the final assembly lines, where shiny Camrys took shape. He heard a cheer go up. Team members on the lines were waving their hand tools towards a signboard that read “no overtime for the shift.” Smiling broadly, Friesen agreed: everyone in the plant surely deserved a relaxed Derby weekend. The plant had been hectic lately, as it was both supplying brisk sales of the all-new Camry sedan and ramping up station wagon versions for the European as well as North American markets. Overtime also had been necessary early in the week to make up lost production because the line utilization rate was below the projected target. In addition to these immediate problems, a growing number of cars were sitting off the line with defective seats or with no seats at all. The seat problem had been the subject of an urgent meeting called by Mike DaPrile, general manager of the assembly plant, that morning, May 1, 1992. At the meeting, Friesen learned of the situation firsthand from key people in both the plant and the seat supplier. He then spent the afternoon on the shop floor to learn more about the problem while the issues discussed were fresh in his mind. By the end of the day, it became clear to Friesen that the seat problem needed solving once and for all; the trouble was that trying to do so could hurt line utilization. This was not the first tough question Toyota’s famous production system had encountered, nor would it be the last. But this seat problem was especially delicate and undoubtedly would demand Friesen’s attention in the following week.

Background
In the early 1980s, Japanese auto makers contemplated building