TOSHIBA OME WORKS CASE ASSIGNMENT

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History
Toshiba was formed in 1939 by merger of 2 highly innovative Japanese companies: Shibaura
Seisakusho Works and Tokyo Electric Company. Toshiba became the first in the world to produce the
powerful one megabit DRAM chip in 1985, the first laptop compute T3100also in 1985. Sales of
Toshiba was 47.9 Billion USD with a net profit of 447 million USD.

Toshiba had 13.8% of the market share for portable computers in 1994 and was expected to have a
market share of 19% of the US market.

Toshiba strengths in the personal computer market was aggressive pricing, technologically superior
products, and a focus on quality. Toshiba could maintain the market leadership by reducing costs,
which was a challenge because of the strength of Yen, dependency on Japanese plant and lifetime of
the notebook model averaged 6 months. Toshiba had large investments in technologies such as TFT
(Thin film transistor color displays), hard disk drives, Lithium ion batteries and CD-ROM devices.
Toshiba had JVs with other industry giants.

Competition: Toshiba’s competition was Compaq which was reducing costs aggressively and
companies such as Dell and Gateway, which were selling directly to customers, and saving costs by
assembling to order.

Toshiba Ome works plant was situated 50 kms from Tokyo and started operations in 1968. It was in
abuilding measuring 80000 sq meters and produced personal computers, word processors, optical
character readers, PC boards, hard disk drives, computer and communication systems. It also included
research and development design laboratories.

In 1995, there were 2600 employees with 440 were direct factory workers and 1050 were design
engineers. Toshiba had 4 categories of factory workers:

1. Full time workers

a. About 75% in Novemebr 1995
b. Paid hourly
c. Worked for 7.5 hrs per day plus overtime
d. Overtime was 30% more wages.
e. Beige caps with beige uniforms
2. Part time workers:
a. Mostly housewives
b. Worked 6 hr shifts
c. Usually worked 3 month contracts
d. Blue caps
e. About 25 % in Nov 1995
3. Temporary workers
a. Hired thorugh third party agencies
b. Usually on 1 month contracts
c. Blue caps
4. Affiliated workers
a. Sent from affiliated companies to help in case of increase in demand
b. Blue caps

Ome PC Assembly line process

History:

In 1968 laptop were assembled on 2- 60m long conveyor belts each staffed by 45 operators

In 1990, it was changed to 3- 27m long conveyor belt assembly each staffed by 14 operators

In 1995, it was further changed to 3 – 14.4 meter lines staffed by 10 operators each.

There was a fourth assembly line which was usually idle and can be used to increase production if
required.

One line was used for international market and the other 2 lines were used for domestic market.

There was an additional line for word processors. It had a single operator assembly cell and a hour
operator assembly cell used for smaller lots of word processors.

Demand:-

Production plan

8 different models of PCs whith about 6 different combinations, so total about 48 different “model
types”

Monthly plan drove the daily production plan for each model type. Each month had 20 days, so 20
daily lots were considered. Each daily lot varied in size from 10 to 100 units. Total output was 300 units
per line.

All the units of one model type was assembled followed by other model type.

Distribution of the parts

All parts and subparts were brought in from Fujihashi parts collection and distribution centre. The
parts would come from Fujihashi in 2 hrs and the production plant would get updated by computer
networks. The parts made in the Ome plant would also go to Fujihashi distribution centre to be
distributed as per the daily production plan.

Worker distribution:

Each line had 10 stations

One material handler who would supply parts as per the production plan

14.4 m assembly line, workers stood on one side of the conveyor

One highly skilled worker called supporter would be part of each Line.

Average output
One notebook was assembled every 2 mins, which means that 30 units per hr and about 225 units per
day.

Production steps:-

1. First operator laid out the major components between 2 white lines
2. Second operator entered the barcodes on these components into a centralized computer
system by scanning.
3. Next six steps involved simple hand operations such as swapping connectors and attaching
parts with small screws.
4. Hardware tests: an operator inserted a diskette containing software designed to test different
components of the computer circuitry into the floppy disk drive. After the software is loaded,
the operator tested the components. The software takes about 4 mins to load, and so the
cycle times are higher than any other step in the line. To reduce the cycle time, hardware tests
were performed in parallel on 3 different units. The units remain on the conveyor, but the
tests are staggered so that they can be performed by a single operator.
5. Shock test:
6. Burn in: the models were put in racks for a 24 hr 35C burn in of the circuit components. One
worker was responsible for burn in
7. Supplying books and manuals to the packaging area of all the 3 lines, 2 workers per line.
8. 3 workers per line packaged the finished notebooks and loaded them on pallets.

Worker Training and skill development

Toshiba believed that productivity can be improved by high skilled workforce. It was encouraged for
multi skilling of the employees and there was 5 high skilled workmen (pack-men) to replace any absent
worker and cross-train other workers.

Quality was an important part of the culture of the company. 2% of the total production failed the
quality checks and only 5% of the total repairs was due to operator errors.

Quality was checked at each stage, and each worker was responsible for checking the work of the
previous operator.

Each operator was supposed to select the screws required 1 or 2 steps forward, this cause double
checking and responsibility is distributed among individuals.

Four workers were responsible for the quality of each notebook.

1. Second operator who scanned the barcodes

2. Last workers who does the shock test
3. Worker who pre-installed software
4. Final worker in the packaging area.

Analysis
This is a multi model assembly line process and the company believes in dynamic line balancing.
Actual production is 30 units per hour which is about 225 units per shift of 7.5 hrs. (2 mins for 1 unit)

This corresponds to TAKT time of 120 secs

In order to go to 300 units per shift of 7.5 hrs, TAKT time to be achieved in 90 secs

Min no of workstations = 1048/90 = 11.64, so we can increase 2 workstations to achieve takt time of
90 secs.

With the current average of 2 mins for 1 unit, for producing 300 units, the time required is 10 hrs
which corresponds to 2.5 hrs overtime.

Current timing on each stations:

sr no station time Actual Remarks

1 1 110 110
2 2 114 114
3 3 101 101
4 4 107 107
5 5 103 103
5 6 107 107
6 7 108 108
7 8 93 93
3 units testing
8 9 310 103 Operations in
Parallel
9 10 105 102
1258 1048

Timing for each station

120

100

80

60

40

20

0
1 2 3 4 5 6 7 8 9 10

Actual
In order to improve the assembly line following improvements are to be suggested:

1. Kits of the screw drivers can be pre-assembled which can reduce 30 secs from the process and
also improve the quality by avoiding the error of not selecting of incorrect screws.

BOM can be updated using kits instead of loose screws.

Total time saved is 30*300units/line*3 lines=27000 secs of the assembly line time

Total time required to produce one unit is 1228 secs, so total additional units produced is
27000/1228 = 22 units

2. To achieve a takt time of 90 secs, the steps that need more than 90 secs needs to be
overhauled. The first step can be started earlier than the assembly line starts, as the first step
takes 100s. so that the line can start at a later stage with an initial inventory of the layout of
principal components in a bin on the conveyor.

Following are the 2 proposed assembly design that can be tried to improve the time from 120 to 100
or 90 secs, which can reduced the over-time hrs by achieving the same output in the standard 7.5 hrs.

sr no Operation Time sr no Operation Time

1 1 100 1 1 100
2 2-7 98 2 2-6 85
3 8,10-15 100 3 7,8,10,11,12 84
4 16-25, 43 100 4 13-20 82
5 26-37, 41 95 5 20-30 88
6 38-46 94 6 30-39 78
7 47-53 98 7 40-46 89
8 54-58 96 8 46-52 65
9 59-62 50 9 53-55 55
10 64,65 76 10 56-60 88
11 66-68 100 11 61-63 244
12 64, 65 76
13 66-68 90

At present with 3 lines total production is around 900 units with 7.5 hrs of overtime.

Another approach can be to use a cluster method, where LCD, keyboard can be assembled separately
and also testing can be done separately. However not much information is available for changing the
precedence for the processes for that.