Toyota Motor Thailand

8/3/2019 Toyota Motor Thailand

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Learningthe

way

of

capability

building

fromthecaseofToyotaMotorThailand

Amano,Tomofumi

AssociateProfessor

GraduateSchool

of

Economics

TheUniversityofTokyo

JBICLPEMworkshop

Comparativeperformanceassessmentfrom

Managementperspectives

ThecasestudyaimstobeusedinJBICLPEMworkshop.Thecitationisnecessarytobeapprovedbythe

author


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Contents

Japanesemanufacturingactivitiesabroadandabrief

history

of

Toyota ProfilesofToyotaMotorThailand(TMT)

Buildingthecapabilitieswhilebeingsmall

Overcomingtheeconomiccrisisandfurthergrowth Implications


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JapanesemanufacturingactivitiesabroadandabriefhistoryofToyota


4/45

Japanesefirms foreignactivities Manufacturing

sectors

vs

Non

manufacturing

sectors

Source:METI


5/45

Source:METI

OverviewofJapanesefirms foreignbusinessactivities Insidethemanufacturingsectors


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LongtermperformanceofJapaneseautomobilefirms

DataSource:DevelopmentBankofJapan

050100

150200250300350400450500

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991


7/45

Theriseofproductivityattheearlystageofgrowth

1959 Motomachi

1965

Kamigo

1966 Takaoka

1970 Tsutsumi

1974 Shimoyama1979

Tahara

Establishment

ofTPS

EijiToyodaandTaiichiOhno

1.Earlystruggleoflowproductivitiesandlowqualitieswithhostilelaborrelationshipand

financialshortageinthe1950s

2.Toyota

laid

off

their

employees

and

announcedJointlabordeclaration

in1962to

promisethelaborsecurities.

3.

TPS

was

developed

at

the

early

stage

of

their

growthtoovercomesuchshortages

Situationsbefore

TPS


8/45

Upgradingof

productivityand

quality

Sustainthelongterm

laborrelationshipand

upgradingorganization

capabilities

Therobustproduction

systemto

the

demand

fluctuationanddiversity

Missions

Components

Justin

Time:

demand

pullproduction

Therespectofworking

standard

and

application

to qualitycontroland

Kaizen(Jidoka)

Normalizationofprocesses

basedon

the

cycle

time

(DohkikaandHeijunka)

Skillevaluation,

education

andtrainingtobemulti

skilledworkers

ThephilosophyofTPS(ToyotaProductionSystem)


9/45

ThefirstexperienceofexecutingTPSoutsideJapan

Toyotatried

to

seek

joint

venture

partner

and

started

partnershipwithin1981

Twoheads:GMJohnSmithandToyotaEiji Toyoda ManagementisToyota,UtilizingtheGMsunusedfactoryinCalifornia,Corollawithbrand,400,000carsannually

There

were

many

opponents

inside

and

outside

the

firms,

howevertheypersuadedtheimportanceofthejointventure

TheimportanceofNUMMIs caseinthe1980s(USA)


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TheNegotiationoflaborissuescomesfirst Negotiation

with

UAW

(United

Auto

Workers

Union)

Rejectingthetraditionaljobbasedwagesystem,takingtheuniformwagesystem

toeveryfactoryworkersallowingthemulti

jobworkers,becauseoftheintroductionofTPS. Hiring

UAW

workers

Fullsupportfrommotherfactory

In1984,Takaokaplantaccepted250UAWworkerstotraintheconceptandskillsofTPS.Workerslearnedthebasicsandmanagerslearned

how

to

make

the

system.

Californiagovernmentsupportedthetrainingfee(3milliondollars).

JapanesemanagersopenedpartieseverySundayduringtheirstays.

Building

the

trust

through

practices

at

NUMMI

In1985theysucceedinlaunchingthe1st car

Fullandbestsupports fromToyotamotherfactory


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ToyotasanothersuccessinTaiwan

0

10

20

30

40

50

60

70

1994

2000

2001

2002

2003

2004

2005

10,0

00units)

(DomesticProduction)Imports)

0

5

10

15

20

25

30

1994

2000

2001

2002

2003

2004

2005

Toyota

Mitsubish

Mazda)

Nissan

Honda

Ford


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ProfilesofToyotaMotorThailand


13/45


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ToyotaMotorThailand(TMT)Establishment

1962

Capital7520millionBaht

Shareholders TMC 86.4%

Local13.6%

(Siam

Cement

10%)

Employees 13,500

Plants Samrong,Gateway,BanPho

Number

of

Dealers

119

Chairman PramonS. President SonodaM.


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TMTplants

Samrongplant(1964)

220,000unit/year

430,000

4,500emps

IMV13Tact

time

1.1

min.

TAW(1988)

55,000unit/year

40,000

1,100emps

IMV34Tact

time

4.0

min.

BanPhoplant(2006)

110,000unit/year

760,000

1,800emps

IMV

3

Gatewayplant(1996)

200,000unit/year

1,000,000

4,400

empsCamryCorollaViosWish

Yaris


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TMT organizationchartin2008


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TMThistory

Importingcompletecars

CKDassembly(196070s)

Carassemblytolocalmarket(197090s)

Dev.ofSoluna

IMVandglobalSamrongFactory(1964)

GatewayFactory(1996)SamrongFactory(1975)

BanPhoFactory(2006)

TAW(1988)

TMTHeadquarter(1989)

ToyotaThailand

Foundation(1992)

ToyotaEducation&TrainingCtr(1996)

APGPC(2005)

ToyotaAutomotiveSchool(2004)

Phase

Phase


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Buildingthecapabilitieswhilebeingsmall


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Buildingstrongdealershipsince1956.

Contacting60

reliable

local

commission

partners

Onestrongdealerinoneprefecture(territorysystem)

Onedealerhas510shops

Strong

service

system

(mechanics,

pure

parts

supply

network)

TMTsupportedtheeducationofsalespersonsandmechanics

Directcommunicationwithdealers(stocks)

Financial

backup

from

Bangkok

Bank

Creatingtrustwithlocaldealers


20/45


21/45

Buildingthestablelaborrelationship

Learningfrom

Japanese

labor

relationship

and

proposing

Joint

labordeclarationin1993(quality,massproduction,productivity)

70%ofemployeesareunderoneunionandtheunionplaysan

importantrole

in

promoting

communication

between

the

companyandlabors.

TMTcontinuededucatingemployeestounderstandtheToyota

waybybothOJTandOffJT

Jointlabordeclarationandrelationshipwithunions

Whenlaunchingnewmodels,

Toyotacelebrateditwiththe

laborunion

leaders.(1993)

Localization of management and organizational capability


22/45

TMTslocalizationpolicy(Thainization)

TMTeducated

and

promoted

local

managers

in

20

years

Japanse Thai

Advisorysystem(Kuroko

system)

Localmanagershouldstandonthelines.Japanesearestaffs.

Localizationofpromotioncommittee

Evaluationand

promotion

of

managers

are

all

localized

Localizationofmanagementandorganizationalcapabilitybuilding

President(1)

EVP/SVP(35)

VP(20)

GM/M(500)


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TMT organizationchartin2008

L li d i ti t TMT


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LocalizedorganizationatTMT

TMTinthe1990s

Appraisalbased

on

competencies

andperformance CurrentsalesorganizationinTMT


25/45

Skill

formation

in

Toyotas

factories

in

JapanProfessional

Knowledge

Practical

Skills

Basic

Skills

LevelS

25

year

LevelA

10

year

LevelB

5 year

LevelC

1 year

Professional

Knowledge

Practiceand

maintenance

of

everyprocess

Practiceand

maintenance

of

80% processes

Practiceand

maintenance

of

60%processesBasics

Practiceof

20%

processBasic

skills

TeamleaderisfromlevelB

(Ref)Educationandtrainingtomultiskilledworkers


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OvercomingtheEconomicCrisisandfurthergrowth


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IMV

project

to

increase

the

export

of

completepickuptrucksandtheirparts

Internalcapabilitybuildingofsalesand

productionfor

domestic

market

in

Thailand

Bahtcrisis

in

1997

Productionvolume

decreasetoalmost30%.

SOLUNAprojectisstuck


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Maintainingemployeesthroughdeepcostcutting

TMTshowed

strong

commitment

to

uniting

with

the

whole

workforce,dealersandsupplierstorideoutthecrisis

Makingoperationsmoreleanandutilizingtheexcesslabor

toimplement

improvement

initiatives

and

additional

educationofemployeesandsuppliers

RespectstotheKingofThailand

Theking

of

Thailand

asked

TMT

to

stay

in

Thailand.

TMT

presentedSOLUNAtohisMajesty.Themotivationof

employeesrose.

Maintaininglaborrelationshipandsocialtrust

HismajestyinSOLUNA

IMV (I ti I t ti l M lti V hi l P j t )


29/45

IMV(InnovativeInternationalMultipurposeVehicleProjects)initiatedbyJapaneseheadquarter

IMVproject

was

initiated

by

Japanese

headquarter

as

their

global

strategiestoemergingcountriesin2002.

DispersionofR&Dcentresto4areas1)

NagoyaTechnicalCentre

2)ToyotaMotorEngineering&

Manufacturing,NorthAmerica

3) ToyotaMotorEurope,R&Dand

Manufacturing

4) ToyotaMotorAsiaPacific

Engineering

andManufacturing(Thailand)


30/45

IMVprojectinSamrong plantinThailand IMVprojectroomstartedinSamrong

plantin2002.

Maximum200

Japanese

engineers

moved

to

the

factoryandinitiatedtheproject

MotherplantisHinosHamura plant.TheymovedtheproductionlinestoSamrong

plantand

launchedtheir

production

for

exporting

their

turcks

13taskforceteams.Obeyaroommethod,E kanban,qualitygatesandothernewmethodswereintroducedwhenlaunchingthelines.

Thefirst

truck

was

introduced

in

2004

Thetacttimeisshortenedfrom1.7secto1.0secin2006.

Gateway plant


31/45

Gatewayplant

Establishedin1996,Factoryofpassengercars(Vitz,Corolla,Camry,

WishandYaris),Sales(Domestic

110thousandandexport76

thousandcars)

,Increase

export.

Oneproductionlinetreats5differentmodelwithabout1minute

cycletimeandthehighestqualitiesinAsia.

Theleader

of

production

line

with

best

practices

in

Asia

Pacific

ThecontinuousKaizenandtheimprovementofworkers skills


32/45

IMVpartsuppliesfromThailandtotheothercountries

OEM

parts

of

13,200

containers

per

year

areexportedto13countries


33/45

HumanresourcedevelopmentatAPGPC

Overcomingthelimitationofmotherplantsystem

ThenumberofJapaneseengineeringstaffsarelimited

GPCstartedinToyotaMotomachi

plantinNagoyain2003

andsoonexpandedtoAsia,NorthAmericaandEU.

APGPS

started

in

2005

near

Samrong plant 700workersaretrainedbasicskillsin2months

Educatingtrainerstrainer

Spreadingtheirbestpracticestoothercountries

GlobalProductionCenter(GPC)

withintheMotomachi

Plant

Learningthebasicskillswithvisual

methods


34/45

StrengtheningthetotalvaluecreationinThailand

ToyotaMotorThailand(1962)

AutoManufacturingand

Sales

Toyota

Motor

Asia

Pacific

Engineering&

Manufacturing(2006)

Technical&Production

Support

Toyota

Auto

Body(1978)

,

SiamToyota

Manufacturing(1987)

InternalPartsManufacturers

HinoMotor

Manufacturing(1964)

TruckManufacturing

and

Sales

Denso,Aisin

AutoPartsSuppliers

ToyotaTransport(1993)

Logistics

Toyota120 Lexus 3

Dealers

ToyotaLeasing1993),AICI

Leaseand

Insurance

ToyotaAutoWorks(1988)

AutoManufacturingand

Sales


35/45

DealernetworkinThailand

D l t f d l t t


36/45

StandardizationofOperationProcedure(SOP)

Times

of

dealer

visits,

Contents

of

communication,

Whom

to

talk, How

to

trainthem,Salesachievement,partsupplies,financialsupports

andhuman

skillsupportsetc.

Thesystemsarestandardizedandimprovedbystaffseverymonths.Theyarealsousedfortheeducationofstaffs.

PartsCentreatBanPho plant JITsupplyofservicepartstodealers Trainingcentreforservicemechanicsofdealers

TETC(Toyota

Education

&

Training

Centre)

in

1996

AfterservicehasbeenrecognizedasanimportantcashsourceevenintheeconomicslowdownlikeBahtcrisis.

Localizationofserviceengineersandthecreationoftheirown

managementsystem

Areal

marketing, DemandSupplymatching,Nationaldemandforecast,

CR(customer

retention)system,CSsurveyetc.

Communicationthroughthedealerclub

Developmentofdealersupportsystem

S i biliti t TMT d l


37/45

ServicecapabilitiesatTMTdealers


38/45

Useof

carrying

charge

in

purchasing

acar:

70

80%

in

Thailand

ToyotaLeasingThailand

Establishedin

1993

Shareholders:BangkokBank10.0%,TABT0.83%,TMT0.26%.

JapaneseBanks10%.

Caseof

carrying

charge

FinancialServicesofToyotaLeasingThailand

High level of integration among the departments of


39/45

Highlevelofintegrationamongthedepartmentsof

manufacturing,sales,R&D,andhumanresourcewithhighly

localizedorganizations


40/45

RegionaltechnicalandproductioncentreinThailand

TMAP(ToyotaMotorAsiaPacific,Thailand)in2006,supporting

productionand

part

supplies

in

Asia

pacific

region

TMAPThailandwillsupporttheregionwithTMAPSingapore

andToyotaTechnicalCentreAsiaPacific(TTCAP)inThailand

TheImportanceofsocialcontributionactivitiesinThailand

ToyotaThailandFoundationwasestablishedin1992

Currently400millionbahtfund

Supportingpublicactivitiesincludingeducation,lifesupport

andhealthcare.


41/45

CEOEijiToyotavisitedKingseveraltimes

BirthdaypresenttoLoyalfamily

Launchingof

new

cars

in

1970s

Establishmentofnurseschoolin1995

Notonlylocalization,butalsosocialization


42/45

TheeffectsofautomotiveindustryonSMEsinThailandTherearelargeclustersofmechanicsandpartsimportersaround

Bangkok

(Siancon)

SourcesandPhotosarefromT.RachottandShintaku(2008)

ManycarusersrepairgasolineenginestoLNGusableengines


43/45

Implicationsfrombusinesshistory

l f h d


44/45

The

importance

of

foreign

firms

operations

and

the

role

of

theirtechnologytransfersandlocalizationpoliciesinnationallevelofeconomicdevelopment

Market

attractiveness

+

export

manufacturing

advantage Theimportanceofbottomup styleeducationandtraining(Trainingtothemiddleclass)withinandoutsidetheMNEs.

Longterm

and

stable

labor

relationship

for

the

commitment

totheaccumulationoftechnologicalskills

Goodandreliablerelationshipofforeignfirmswithlocal

governmentand

overall

society

CreatingqualitativecapabilitiesnotlikeonlyvolumebuildingisveryimportanttoJapanesefirms

Someimplicationsfromthecasestudy


45/45

(Ref)ToyotasnextchallengeinRussia(St.Petersburg)

Toyota Motor Thailand

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