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Toyota Industrial Equipment Manufacturing.

Toyota Industrial Equipment Manufacturing Inc., a new forklift manufacturing plant in Columbus, is a chip off the old Japanese block.

"We operate a lot like an automotive plant," says Max A. Allway, TIEM's senior manager of sales and material control. "The system we use here is very similar to what they use at Toyota Motor Co. We're trying to merge the best of the Japanese and American philosophies.'

Toyota Industrial Equipment Manufacturing is a joint venture of Toyota Motor Co. and Toyota Automatic Loom Works Ltd. Toyota has been selling fork lift trucks in the United States for 23 years, but this is its first attempt at production outside Japan.

Toyota's massive Takahama plant in Japan, which was built in 1970, is the largest industrial vehicle plant in the world. Covering more than 28 acres and equipped with the most modern facilities, including industrial robots and an unmanned conveyor system, it is a showcase of Japanese efficiency.

According to company officials, parts manufactured in the morning at the Takahama facility are installed in the afternoon. Workers there bang out one forklift every three minutes. Such efficiency provides the company with an 18 percent market share worldwide and a 9 percent share in the United States, its largest market.

With only about seven acres under roof, the fledgling facility in Columbus is considerably smaller than its Japanese counterpart. And, officials at the Columbus plant say, they have their eye on quality more than quantity, particularly during the plant's first year.

But before the first forklift rolled off the assembly line in Columbus in May, U.S. supervisors spent a month in Takahama. Prior to that the trainees attended a week of classes at Indiana Vocational Technical College in Columbus on subjects such as statistical process control, material control systems, quality assurance and Japanese culture. When they returned to Indiana, they brought back Japanese notions about engineering, training and production.

When supervisor training was finished at a mock plant that had been set up in Takahama, the company ripped the new machinery from the floor and shipped it to Indiana. The firm also sent 50 Japanese instructors to help train about the same number of new production-line workers. They welded together more than 80 forklift frames just for practice. The frames were later torn apart and used as scrap.

"I've never heard of a company that dedicates so much time and financial backing to train its people," says Steve Pontius, TIEM'S senior manager of human resources. "Because of all this training, and when you consider our paint system, we're really an improvement over what comes out of Japan," he says, referring to the $2.5 million paint system in Columbus that not only puts an automotive-quality shine on the forklifts but also draws excess paint through a layer of water, which is chemically treated, before it is discharged into the city's wastewater treatment plant.

At the heart of production in both plants is a deceptively simple process called the "kanban," or card system. The concept involves a card inside each crate of parts. "When I take the first part of a box, I turn that card in and that's the signal to either deliver or manufacture more parts," Allway explains. "We do that on a global basis." The result, with the help of computers that link dealers with factories, is a synchronized system of production with precision delivery and a minimal amount of inventory - Allway calls the Japanese process a pull" system, as compared with the push' system commonly used in the United States. 'In merging the two systems, we try to fit the Japanese approach to moving material through the factory and the practicality of dealing with outside domestic suppliers," he says. "We think we've put together a pretty good method of doing that."

Foreign parts sit only about a day and a half inside the plant before they become part of the product. A slightly larger cushion is allowed for domestic parts, if only to establish a rapport with new business partners. Depending on the supplier, parts manufactured in the United States are usually scheduled to arrive at the plant about one week before they are needed.

"Ours is not a physical inventory; it's a time buffer," Allway says.

In July, TIEM announced that it would boost its initial $40 million investment by another $20 million when it begins manufacturing the rear axle and mast-parts previously shipped from Japan. Components such as engines, drive trains and transmissions still come from overseas. About 40 percent of the parts purchased from outside the plant come from domestic suppliers, and the company says it expects to add to that percentage as the plant settles into its new home.

Another twist at the Columbus plant is the concept of "kaizen," or continuous improvement. "That means everything we do, we look at with an eye for potential improvement, "Allway says, "not just material flow, but everything-paperwork, how we treat the customer, how we give interviews."

There are no on-line inspectors at TIEM. Employees, or associates as they are called, have been trained to inspect not only their own work but also the work of the previous welders, assemblers or painters.

"Part of our thinking is that everybody takes care of checking the work up to that point and not passing it along," Allway says. "We always search, not just for the fix or the BandAid, but for the cure to that problem, and then we look to other areas where that same problem might occur."

Robotics are a big part of the operation, according to Todd Landis, a manufacturing engineer and one of the first 12 employees sent to Takahama. The indiana plant has five robotic cells and plans to add four more before the end of the year. "This is the preferred robot in the industry and it can do a lot more now than what it was designed to do," Landis says. "We enhance them a little more every week through programming. We spend a lot of time and energy making sure the welds are correct and sound, because that's where it all starts."

Brooke Tuttle, president of the Columbus Economic Development Board, says the city is greatly pleased, not only with the significant investment and boost in employment provided by the plant but with the clout that comes with the Toyota name as well. "With a respected world-class company like this, you get a ripple effect from marketing activities," Tuttle points out. "It gives people a chance to see Columbus who might otherwise not get that opportunity, and that can lead to other opportunities."

Another advantage, says Tuttle, is the diversity Toyota brings to the local economy. Unlike many employers in the community, such as Arvin Industries Inc. and Cummins Engine Co. Inc., which are closely tied to the automotive industry, Toyota and its forklifts are less subject to devastating swings in the marketplace. At the same time, however, because of the nature of its business, Toyota can put to work the extensive metal-working skills offered by the local labor force.

A well-trained work force was one of the reasons cited by Toyota for coming to Columbus. The average age of employees at the plant is 27.5 years. They're young, enthusiastic, energetic and, by damn, they want to be with us their whole career," Pontius says. "We want this to be like a marriage with lifelong opportunities. "Most people in the plant know the names of three out of every four fellow employees and a few know the names of everybody, "and that's pretty darn unusual," Pontius notes.

Allway, who helped the company select a site, says Columbus had the edge over other locations because of its proximity to components suppliers, aggressive recruitment efforts at the state and local levels, and the quality of life in Columbus. The economic development program in Columbus is "second to none in the nation," he says. "And I should know. I tramped through a lot of cornfields looking for this site."

Two state grants were earmarked for the TIEM project. The city received a $300,000 infrastructure grant to build water and sewer lines and an access road to the new facility. TIEM received another $75,000 for training of new employees.

More than 200 people responded to ads for the first few supervisory positions. Of those, about 120 submitted applications with about 45 selected for interviews. The number of employees is expected to reach 1 80 by january. Plans call for the production of about 2,900 forklifts through the end of the year and another 5,700 vehicles in 1991, the first full year of operation.

Toyota Motor Sales, the same firm that sells the cars, is TIEM's only customer. Its forklifts are sold to a variety of industrial customers through 125 Toyota outlets nationwide.
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Title Annotation:Regional Report
Author:Gard, Jon
Publication:Indiana Business Magazine
Article Type:company profile
Date:Nov 1, 1990
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