Toyota Tacoma demand squeezes Baja plant

July 09, 2018 01:00 AM

A $150 million expansion at Toyota's Baja plant, which produces Tacomas, has boosted capacity to 160,000 units a year.

TIJUANA, Mexico — Nestled on a hillside a stone's throw from the U.S. border, Toyota's pickup plant sees little traffic beyond the steady flow of supplier trucks making deliveries and car carriers heading out with shiny, new Tacomas.

Inside the Baja California factory, it's a different matter.

There, you'll find the frenetic movement of electric-powered wagons carrying parts to the assembly line, slow-moving autonomous vehicles bearing naked truck cabs and workers waiting at factory intersections until it's clear to walk across.

"One of our biggest challenges now is traffic," said Sergio Solis, head of assembly and production control, amid beeping vehicles and employees using hand signals to announce their movements.

Baja's "little engine that could," in the words of Toyota de Mexico President Mike Bafan, has taken on an increasingly important role for the automaker following the plant's capacity increase to 160,000 units a year of the segment-leading pickup from 100,000. In the process, about 1,000 workers were added.

The $150 million "cap-up," Bafan told Automotive News, was just the latest in a long line of incremental steps to squeeze out as many pickups as possible from its North American factories.

The shift in consumer demand toward light trucks had outstripped Toyota's supply of the beloved "Taco" from both the Tijuana plant and one in San Antonio that also makes the full-size Tundra.

Just a decade ago, in about the same amount of physical space, the Tijuana plant was building only 30,000 Tacomas a year as a side project to its principal task: making truck beds for the former NUMMI joint venture in Fremont, Calif., (now a Tesla factory) with General Motors.

Pickup catch-up

Toyota has spent years trying to meet what it says is the actual demand for its pickups.
	Production (in thousands)
	San Antonio	Baja	Shortage
2014	235	73	50
2015	246	89	65
2016	268	105	27
2017	268	108	24
2018 (est.)	254	156	0
Source: Toyota

The journey from part supplier to medium-size assembly plant is a case study in manufacturing optimization and kaizen, or continuous improvement, a hallmark of the Toyota Production System.

When Bafan, a 22-year GM veteran and NUMMI alumnus, took over Toyota's Tijuana factory in 2014, he started laying the groundwork for its rapid transformation.

First, he expanded the work schedule to three shifts, operating 24 hours a day during the week, a rarity for Toyota anywhere in the world. What made it even more rare was the fact that the Tijuana-San Diego border is open to cargo for only 12 hours a day and the plant gets nearly all of its inputs — stampings, engines, seats — from the U.S.

Even with minimal plant automation and no on-site suppliers, the complex and costly logistics worked. Production rose from 73,000 units in 2014 to nearly 90,000 a year later.

U.S. dealers still wanted more, so Bafan kept pushing.

He added a second production shift on Saturdays, as workers applied maximum kaizen to streamline every movement and process, bump-ing output to more than 100,000 in 2016. Saturday nights and Sundays had to be set aside for badly needed plant maintenance.

Still, it wasn't enough to meet demand. The days-supply figure for the Tacoma remained in the single digits, and its market share was being eroded by GM's revived midsize pickups, the Chevy Colorado and GMC Canyon. Meanwhile, Ford was working on a reboot of the Ranger.

Plant expansion

In late 2016, Toyota finally made the capital investments the Baja plant needed to get to the next level — literally.

A second level was built above the shop floor with overhead conveyors to increase automation. Welding robots were added along with a satellite paint shop to handle the additional trucks.

New building construction was kept to a minimum. "There was not a big expansion," Solis said during a plant tour in late June. "Basically, the whole expansion we made was to hold more material."

The plant's added capacity — to about 650 pickups a day — required stocking up on parts to overcome time constraints on cargo crossing the border, plant officials said.

Production lines were rearranged on weekends because the plant had to continue churning out pickups at the same rate. Sometimes there were as many as 2,000 people working on Sundays, including plant employees, subcontractors and construction workers.

Slowly, the puzzle pieces were moved into place, plant managers said. Workers showed up on Monday morning to digest the ever-changing layouts and adjust their work processes.

During the yearlong expansion, there were just 27 nonworking days and Sundays available to rearrange the factory and reorganize the work flow.

"That was it," Solis said. "That was the window."