Regional Workshop on Promoting e-Commerce/Business, 2004/9/2

IT Innovation in the Auto Industry

1. Business change in the Digital Economy
2. IT new business for car value chain
3. Digital engineering and supply chain management
4. IT enhanced Toyota Production System
5. Synergy of people with IT
Satoshi Kuroiwa
(skuro@mb.ccnw.ne.jp)
Visiting professor, Nagoya Institute of Technology
The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of the Asian
Development Bank Institute (ADBI), the Asian Development Bank (ADB), or its Board of Directors, or the governments they
represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any
consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

Measures for the advanced digitization of industry,

starting 1995
Management issues in the
manufacturing industry

Advent of the zero-sum eraGlobalization

Reduced rigidity of industry structures

Electronic Commerce Verification Project (1995)

CALS Project (10 business categories)
Automotive SteelAviation Electronics
EC projects for companies & consumers
B-B, B-C)

Newly established in April 2000

(integration of 4 related bodies)

Electronic Commerce Promotion

Council of Japan
(ECOM)
(Chairman: Mr. Cho, Toyota President)

http://www.ecom.jp

IT Strategy Conference2000
1. Ultra-high speed net infrastructure
(Murai)
2. Electronic commerce rules (Miyauchi)
3. Realization of e-government (Kishi)
4. Personnel development (Cho)

e-Japan Program2001
Aiming to become a world-leading
IT nation within 5 years
e-Japan Program2003
Focusing on IT applications and contents

ECOM Activities and Achievements

1. Support of legislation
Electronic Signature Law The Personal-Data Protection Law

Junsoku (Interpretative Guidelines)

2. Guidelines and agreements

Guidelines for Consumer Protection Certification Authority Guidelines
Security Guidelines Standard Agreement on Electronic Settlement

3. Standardization
Maintenance/diffusion of Japans EDI standardization (CII
Japans representative of STEP and eb/XML international standardi zation

4. Dissemination of EC and formation of organization

Online release of info. and lectures On-line Trust Seal System
International Online Disputes ResolutionEC enterprise business model
Survey and projection of Japanese EC MKT scale

Supply Chain and Product Traceability

Junsoku

ODR International Standardization

Comprehensive interpretative
guidelines for EC over the Internet
regarding the application of current laws

Collaboration of ADR organizations among Japan,

the US, and S.K Discuss how international ADR
organizations should be.

Projects or Organizations for Digital Innovation

Key words
Customer centered, Agile & Lean, Concurrent Engineering,
Collaboration, Defacto- standard, e-Business, e-Commerce
ECOM : Electronic Comme rce Promotion Council of Japan
NCALS : Japanese commercial CALS ( 1995-1998 )
VCALS : Vehicle CALS (One of NCALS Projects)
AIAG
: Automotive Industry Action Group (U.S.)
- Founde d in 1982
- NPO of 1500 U.S. Auto Industry
- Projects ( MAP, STEP, ANX, etc.)
IST
: Information Society Technology
- One category of the Fifth Framework Program
(European Community)
- merged Program; Esprit, Telematics and ACTS

Information enhancing Projects by AIAG

MAP( Manufacturing Assembly Pilot )

Source: AIAG
(Automotive Industry
Action Group)
http:// www.aiag.org

Supply chain improving project in automobile industry

ANX(Automotive Network eXchange) 11/98

84
proprietary EDI

GM net
Ford net
Chrysler net

8592

99

AIAG
ANX
Standard Network
(X.12)
ENX (EU)
JNX (Japan)
KNX (Korea)
AANX (Australia)

e-Marketplace of the OEM in the US.

e-Business expansion of Big 3 from ANX
based on physical N/W to EB/EC applications
Buyer

e-Marketplace
OEM
OEM
OEM

Covisint
GM
For
d
DCR

Seller

Business plan
1) Purchasing (indirect materials)
2) Purchasing (parts,materials)
3) Production &Logistics
( production& logistics control
4) Product development collaborative design

NissanRenualt

Covisint

Supplier
Supplier
Supplier

Co = connectivity/collaboration
/communication
vis = visibility/vision
int = integration/international

JNX: Common Network Infrastructure

JNX=Japanese automotive Network eXchange

ANX is modified to JNX to fit into Japanese telecommunication environment.

(1) Reducing Communication Cost

Auto Makers
A B
C

Auto Makers
A
B
C

JNX
Trading
Partner
CSP

JNX
X

Suppliers

CASP

Trading
Partner

Suppliers

CEPO

CSP

Trading
Partner

JNXO
CSP
CSP

CSP
Trading
Public Partner
Internet
ISP

Cost Reduction of BB-B Supply Chain in Japan

is 540$ /unit (Roland Berger and Deutsche Bank)

ANX,JNX,Internet

Upper)
Lower)

IS
(2) Guaranteed quality & security Trading
Partner
ISPP
IPsec Security Gateway

CSP = Certified Service Provider

(3) Standard Technology
Applications, Data
TCP/IP, no proprietary protocol
CADProcure-EDI
(4) Modified network service of ANX
Infrastructure

Structural change to the auto industry

Almost issues brought by ICT and digital economy
- Open - Speedy - Global - Collaboration
1. Globalization of economy (M/A)
2. Environment and energy issues
3. Change of the value chain
4. Cost reduction (Modularity of the vehicle )
5. Agile and lean organization
Vertical Structure

All Products

IBM
DEC

All Products

(1960~1985)

Horizontal Structure NOW

CPU Intel etc.
OS Microsoft, Mac, Linux
Application Microsoft, SAP etc.
N/W
Ciscoetc.
Peripheral HP, Canon etc.
Assembled
hardware Dell etc.

Expansion of auto business value chain

New vehicle sales account for around 25%
Added value (unit: \10,000)/user
of the 40 trillion yen auto market in Japan
Enhancement of the value chain
150
30% 25% , 8% 37%
is important to raise customer satisfaction
dealer
levels
100
50

Four-sided approach to IT at Toyota

ITS
Information
communications

Card
Rent-a-car
lease

Installments

New vehicles

Value

U-Car
Used cars
Vehicle insurance

Materials,
Parts

Afte r marke t

Distribution,
Service

UpstreamDownstream

25%
Customization

Service
After market

Accessories

Assembly

Parts
After market

Creating high functionality vehicles

Smart cars

nt cars
e
g
li
l
e
t
n
i
e
Mo r
Safety, smoothness, comfort

Progress of
autonomous functions
Cruise
control
t
or
p
up
t
s
or
l
p
a
p
n
su
io
t
g
n
ra
Blind corner
ki
pe
a
O
m
monitor
on
i
t
r
s
o
p
ci
up
s
De
n
Advanced positioning
t io
i
n
correction
c og
Re
(D-GPS)

Cruise control with

built-in brake controls
Synchronized navigation
shift controls

Lane deviance
warning
Reverse guidance
monitor

Electronic signs
Night vision

ETC
Map updates

VICS
Multi-media Navigation

Maintain distance
between cars

G-BOOK

Commercialization of autonomous systems

Year

cooperative infrastructure systems

Creation of new car values through G-BOOK

Embodiment of vehicle-IT integrationCreation of new car values
Establishment of a system to maintain long-term contact points between
Toyota and its customers
Expansion of the compound value chain of vehicles and other areas

G-BOOKService contents
Information News, weather, traffic info. integrated with carnavigation systems, town info., etc.

Download Maps, music, images, electronic books, etc.

CommunicationsReceiving/sending email, etc.
Entertainment Games, network karaoke, etc.
e-commerce GAZOO
Net care (car care on the net)Car repair/maintenance information

G-BOOK ; on board information service

Information Network Services realized co-existence
People, Vehicle and Social life

People

Vehicle closer to People

G-BOOK
Vehicle smarter
and more intelligent

C o-exi stence
Dri ver deli ght

Vehicle

Society

Vehicle better
relation to Society

GAZOO (Toyotas EC site) started from TPS

From cars to EC sites, to Toyotas portal site in the car
business value chain
TPS=Toyota Production System
Scope of Just-In-Time
kaizen activities
in the past

Areas of Gazoo group

kaizen activities

Manufacturer

Dealer

Establishment of information
Network for used cars
UVIS

(Used car Visual

Information Selection)

Gazoo: from real to virtual

Amazon: from virtual to real

Toyotas EC site (www.gazoo.com)

Travel
Car parts
Finance
Gourmet

Music

Gazoo

Books, etc
Entertainment
Fashion

GAZOO

Used car information

New car information
Car examination information
Body shop & repair information
Insurance information
Assessment price information

New business models in the Internet era

Changing Toyotas business model
Means of
handling orders
Inventory sales

Ship to Stock (STS)

Raw
materials
processing

New car devt.Parts

procureme
nt

Final
assembly

BTO sales
Parts

Engineer to order (ETO)

Lead time

Half-finished product
Lead time

Lead time

No inventory only long-term parts

Price

Half-finished product

Build to Order (BTO)

Order-based engineering

Lead time

Delivery time

to Order (MTO)

Lead time

Final product

Order-based assembly

Order-based production

Response to product requests

Dell model

Assemble to Order (ATO)

Configure to Order (CTO)

Short Hard Cheap

Final product

Order-based assembly

Order-based configuration

Distribution,
inventory

stock point

Forecast production

Make to Stock (MTS)

Shipment,
transport.

Response
to values

Lead time

Long Easy Expensive

Real & virtual sales & marketing

Hybrid marketing that combines face-to-face sales in a
real store by sales staff, with the provision of virtual
information via the Internet
Customer
Information
gathering

To the store

Real

Actual
display

Catalog

Negotiations,
order, delivery

Sales staff

After-sales
service

Sales staff
Service staff

Virtual

Customers behavioral
trends
Comparisons by
lists

Virtual
showrooms

GAZOO

GAZOO

Shopping Mall

G-Tower

Online
contract
agents

Telephone
consultation
with garages,
outlets

Replacement

Sales staff
Trade -in price
Tradesearches

GAZOO
Shopping Mall

Deployment images of GAZOO and GBOOK

GAZOO, GBOOK: Provision of an interactive information service to customers
GBOOK: Embodiment of vehicle-IT integrationCreation of new car
values
CRM enhancement by improving contact points with customers

GAZOO Center, GBOOK Service

Dealer B

Product development/marketing
Life service
ecommerce

Integrated
Customer
info.

eEnter commerce Car life

service
tainment

Card
Possessed
cars

Dealer A
Customers
manage d
by its own

Card Traffic info.Customer

service
finance
ITS

Kiosk
terminals

GBOOK

MainteInsuranceRental
sale /lease
nance

Ai21(Dealer Key Business System

Total portal site

Internet/mobile

Car
sale

In-vehicle
terminals Phones

General
stores

Customers

Dealers
stores

Car rental & Purchasing

leasing stores
store

Basic stance of Toyotas management

1. Victories of environmental technologies
Product
Reduced vehicle emissions & improved fuel efficiency
Process
Recycling economy, recycling production system
2. Surviving global competition
Cost reduction activities
Product
Process

Shared platforms
Modularization of parts
Common parts
Independence
Elimination of waste
Incorporate all, from design to sales
Make full use of IT (information technology)
Work as one with parts suppliers

Toyotas origin of making things

1. Enterprising spirit
Commit yourself to research and creation. Always go ahead of the times. (Toyotas platform)
2. Principle of genchi genbutsu (actual places and goods)
Try first. Dont be afraid of making mistakes (Sakichi Toyoda)
Engineers who do not wash their oil-stained hands more than two times a day are not
engineers at all. (Kiichiro Toyoda)

3. Total participation
Good products, good thinking (Companys slogan for inventiveness)

4. Making things is making people

Things can be made by people and accumulated know-how. You cannot start work
without first developing people. (Eiji Toyoda)

Toyota Production System

Two pillars

Toyotas unique idea/system of making things

Making problems apparent and solving

Just-In-Time
Jidoka (Autonomy)

them quickly by genchi genbutsu,

visualization and information sharing

Toyotas DNA, according to

Harvard Business Review Magazine
Decoding the DNA of the Toyota Production System
by S. Spear and H.K. Bowen Sep.& Oct. 1999

The tacit knowledge that forms the basis of the Toyota Production System can
be understood according to four rules. These rules are used as a guide for
process design, work, and improvements in all activities and procedures used
for products and services.

Rule 1:
Rule 2:
Rule 3:
Rule 4:

How People Work

How People Connect
How the Production Line Is Constructed
How to Improve

On-site managers do not teach these rules directly to supervisors and

workers, but teach the rules (ways of working, links between tasks, zero
defects, improvements) and ways of learning on site.

Sharing Vision the Toyota Way 2001

Established as an action program of Toyotas basic principles in 2001.
Established based on TPS People are the most important
management resource.
Toyota original
ideas/sense of values
/methodologies that
exist as tacit knowledge
<Two pillars>
Continual
Improvement

Knowledge &
improvement
Respect for
People

Respect for
humanity

Morph into
a true global
company

Visual control
/sharing information
throughout Global Toyota
in Toyota Way
<5 key words>

Challenge
Kaizen
Genchi Genbutsu
(Lineside)

Respect
Teamwork

Business reform & Toyota Production System

Three approaches to business reform
1. TQM (Total Quality Management) activities
Deployment of Toyota Production System (TPS)
to development & marketing

2. BR (Business Reform) Program

Business reengineering activities

3. Utilization of IT (Information Technology)

Product development, production & logistics, sales & service

Toyota Production System (TPS)

Also called Toyotas production philosophy, management philosophy,
and Toyotas DNA

No innovation without improvement (Kaizen)

Goal

To create a human organization that continuously improves,

while constantly striving to achieve the To Be ideal

Company-wide TQM Activities

Axes of TQM activities
TPS (Toyota Production System)
TDS (Toyota Development System)
TMS (Toyota Marketing System)

Trinity activities
based on TPS
What is
necessary?
What to
produce?

Product
planning

How were past sales?

What kinds of
products will sell well?

Sales
planning

Design

Market
research

SQC-based activities
Engineering
design

TDS

Experiments
Evaluation
Preparation
for production

How to
produce?

TMS
TPS for on-site
improvement

TPS
Production
engineering

Service

Sales
Distribution

How to sell?

Inspection
Manufacturing

Were good products

produced?

Business reform (BR) using IT

BR based on utilization of total optimization IT,
integrated with management strategy
Digitization of developmentproduction arrangements
procurement
Enhancement & visualization of supply chain
Customer-focused marketing value chain
Global real-time management
Management strategy
Global real-time management

System
Production

Development

Arrangements

System
Procurement

System
Production

System
Logistics

System
Sales

System
Af ter sales

System

System

Customer-focuse d marketing
value chain

Enhancement & visualization

of supply chain

Business

Digitiz ation of de velopment

production arrangements
procurement

Need for New Product Development Process

Evaluation with
Actual Object
Mass
Production
Evaluation

Product
Planning

Serial Development

SOP

Production

Product
Development
Product
Evaluation
Production
Preparation

Production

Better
Cheaper
Faster
to Worldwide Customer
Team Design by Digital Engineering
Virtual Evaluation
Planning

New
Process

Trial
Manufacturing

Production
Preparation

3D Models

Virtual Evaluation
Parallel Development

Production
Preparation

Drawing

Product
Evaluation
Actual
Object

Design

Process

Product
Product
Planning Development

SOP

Production

Conventional

Mass Production Design

Sales

Trial Manufacturing Design

Front Loading of Business Process

-Job Organization Reform
-Reengineering
+
-Concurrent Engineering
(Man hour)
Now Conventional
Fast
Review

< Design >

IT Support
<Production Preparation>

(Man hour)
Conventional
Performance
Now
Assembling
Production
Equipment

Re design

Fast Evaluation

Fast
Review

-Process
Design
-Equipment

Complete
Equipment

Procurement
-CAD/CAM/CAE
-Quality Planning
-Digital Assembly

-Quality Analysis
-Process Design
& Project Mgmt.
Support System

Toyotas globalization
Current

production ratio is 2 (domestic) : 1 (overseas)

Overseas production doubled from 1990 to 2000.
Global expansion is being planned.
Export of finished
vehicles
1975

Export of parts
Local assembly
1985

Business expansion in Global business

advanced countries
expansion
2000
2000

(Unit: 10,000 vehicles

5.25 million vehicles

(in 2000)

700

1/

Overseas
production

600
500

400

Parent
plants/buffers

300

Export

200

100

Domestic sales
55

60

65

70

75

80

Establishment of new
plants

85

90

95

00

Market
revitalization

05

10

1/
More
than
3
million
cars

Management viewpoints and methods

of overseas operations
Plants in Japan

Overseas operations

Benefits of Japanese way (implicit knowledge)

Turning into explicit knowledge

Qualified members
Consideration of human

OJT-based education

mobility based
on contract society

Simple
Easy to understand
Fast

Team activities
Response to overseas operations

Utilization of digital engineering

1.Non-verbalcolors, pictures and numbers) 2.Making videos repeated watching
3.Simulated experienceanimations 4.Documented procedures and know-how
5.Non-verbal/making DBseasy search
6.Real-time monitoring (sharing of actual sites

Development of Digital Engineering

at Toyota
96

97

CASE Activity
Focus on
Product SE

Applied
Task

Digitized
Item

Product
Design

98

99

00

Digital Engineering

Focus on Completion
Degree of Equipment
Focus on Completion
Degree of Production line

Tooling
Design

Product Fixture
Tool

Line
Workability Installation
Design Consideration Design

Installation
Equipment In-Line
Operation Operation

Concept of Digitalization
Competitive Car
Manufacturing
Quick
Information
Response
Share
Digitalization
Innovation of
Innovation of
Production
Visualization Global Organization
Engineering
Simplification
Digital Engineering :
- Activities of improvement and creation empowered by IT
- Implicit knowledge and skill + Digital data
- Team Design + Utilization of CAD & CAM

Flow of commodities & information

in Toyotas car manufacturing
Flow of commodities

<Production process>

Flow of information

Assembly Line Control (ALC)

Stamping

Welding

Paint

Dealer

Assembly

Vehicle assembly plant

Casting
Forging

Machining
Assembly

e-Kanban
Parts manufacturer
Production order
Kanban

e-Kanban

Process

Process

Process

Parts acceptance
Kanban

What is the Toyota Production System?

Two pillars of the Toyota Production System
Just-In-Time (JIT)
Jidoka (Autonomous automation)
Goal

No Kaizen, no innovation.

Create a human group that ceaselessly makes improvements

geared toward ideal (to-be) situations.
<Objectives>
System levels
High quality
Short lead time
1
High productivity
<Methods>
2
Pull system
1
Leveled production
Continuous flow system

1
2

Kaizen (improvement)
Human-oriented
Activities based on TPS
(Toyota Production System)

2
-

Innovation
Technology-oriented
BPR
FA / CIM / e-Business

Time

Steps for realizing Just-In-Time

Improvement of
awareness

Improvement of
operations

Top managements strong will to carry through

On-site workers implementation ability to steadily
tackle any difficulties
Changes in awareness & 5S (Seiri, Seiton, Seiketsu,
Seiso and Shitsuke)
Continuous production: Challenge multi-process
handling and one-piece-at-a-time production.
Leveled production: Shorten set-up time.
Standardized work: Jidoka, visual control
First, focus on improvement of mechanism.
Lastly, introduce facilities (incld. IT).

Improvement of
facilities

<Evil crime of facility installment>

Facility installment costs too much.
Facility installment without improvement of operations
leads to entrenched waste and covering-up of bad mechanisms.
Difficult to try again.
Shift to facilities-oriented manufacturing (high cost structure)
Shift from customer orientation to manufacturing orientation.

Fusion of Toyota production system

with information systems
Application of advanced information systems to
Toyota Production System (since 1980s)
With technological innovations & the management environment,
Toyota Production System continues to evolve
Head
office
Production
plant

IS

IS

TPS

IS
TPS

TPS= Toyota production system ISinformation systems

People-centric
(Japanese management)

-Process-oriented
-Kaizen
-Collaboration
-Open, Bottom-up
-Flexible

Technology-centric
(Western management)

-Technology-oriented
-Innovation
-Creation
-Closed, Top-down
-Fixed

Total Optimization of TPS Kaizen Activities with IT

Total optimization by using IT is important in the planning work (modeling and
simulation), while synergy of TPS improvement activities is important
in the implementation work.
How to connect process:
Autonomous distributed type (Next process is your customer)
Genchi Genbutsu (lineside) principle
Prompt improvement of situations can be expected, if improvement is
implemented at workplace that has freedom and needs for improvement
Process

Process
Instruction

Process
Instruction

Flows of materials

Center centralized type

MRP (Push ) base

Information system
Instruction

Process

Autonomous decentralized type

Kanban (Pull) base

Flows of information

Instruction

Process

Process
Instruction

Monitoring

Information system

Toyotas Customer-in Program

Feedback customers voices (orders, well-selling models, new models)
Use IT for smooth flow from order-taking from customers to parts
procurement, production and distribution.
(1) Shorten lead time from order to car delivery
& keep to car delivery dates.
Improvement & innovation of
Period from order-taking to delivery:
14 days
Reduce No. of cars in stock at dealers.
(To BTO)

IT systems for production

planning, plan for demand &
supply and e-Kanban

(2) Use customers data for product planning.

Requests for products
Expected No. of units to sell, well-selling models
Order
Delivery
Development

Preparation
for production

Production
(procurement)

Transportation

Processing data on
market/economy/customers
Inventory

Dealers

Customers

Objectives of Customer-in
Customer-in Activities
Product-out
Market-in

Customer-in

Shorten lead time to car delivery.

Keep to car delivery date for
customers.

Flexible production
Digitalization of Kanban, etc.
Procurement

e-Kanban

Respect order sequence of finishing

cars
Informing plants of order data, etc.

Production
Leveled production
(Month 10
10-- day pe riod Day Unit)

Keep to transportation dates

Preliminary planning on
transportation, etc.

Transportation

Dealers

Sales/production plan
Earlier preparation of planning work
Agile planning based on fresh market information

Keep to car delivery dates

Improvement in new car
inspection, etc.
Customers

PULL by customers orders

Use of IT in sales activities

Customers
Dealers

Car possessing process

Car using process Car purchasing

process
Shopp
ing

Trave
ling

Product
sele ction

Deale r
sele ction

B2C

De cision
on
purchase

Delive ry/
payment

Re pairing/
inspe ction

Used
cars

Vehicle selling system

Dealers HP

(Dealer Key Business System)

GAZOO
B2B

Toyota Internet driving

Toyota

Ordering system

Communications

ITS
Card business

Motorcycles
Marine
business

New business

e-Kanban

Production management system

CAD/
CAM

B2B

Distribution system
Parts list system

Parts procurement
system

Supply chain system

Suppliers

Housing

Response to Global Supply Chain

Respect the basic principles of Toyota Production System (TPS)
even for qualitative changes of supply chain.
Remarkable reduction of lead time & inventory

Shorten/streamline chain.

From a narrow distribution channel to a wide one

From low frequency, to small-lot, high frequency and heavily-laden conveyance
Rectifying supply chain

Increase values and product types in post-process as much as possible.

Concentration of supply bases
for the global market in Japan

Multipolarity of supply bases:

Growing complexity
America

Europe

America

Europe

Japan

Australia
/Asia
Middle
East

Europe

Japan Venezuela
Vietnam
Argentine

South Africa Singapore

Japan

Africa

Products

Supply chain of new project

Africa

India Thailand

Australia/Asia
/Middle East 5 main

Produced parts

production bases

Philippines

Indonesia
Malaysia
Main sales bases

Example of Global Product Strategy

Establishing an export base in a foreign country.
1999: Global production system for Car Model A
Japan
120,000 units

India
Thailand
60,000 units
20,000 units
Indonesia
20,000 units
10,000 units
Argentina

Approx. 250,000 units

Export base of finished cars

was located in Japan.
Small-lot production
in ASEAN countries

20,000 units
South Africa

2004: Global production system

for Car Model A (IMV Project)
Approx. 500,000 units

Export base of finished cars

is established in Thailand.

Thailand
210,000 units
40,000 units
India
70,000 units
60,000 units
80,000 units
Brazil
South Africa
Argentine

Indonesia

40,000 units
Othe rs

Global supply chain supported by IT

- Supply Chain is one of the most critical issues
to promote Toyotas global business
- Best global Supply Chain will be established
by information sharing and global common database
Body maker

Europe
D/B

Global Database
Product,Order, Production
planning Logistics

Middle
East
Africa

Toyota

Asia

North America
D/B

Supplier

Middle/South
America

D/B

Australia

Improvement
activities

Kaizen activities & IT

(Basic principle of TPS)

Kaizen (improvement) is never done.

Eternal quest for should-be situations

First, improve mechanism/operations.

Lastly, start on automation (introduction of IT).
Kaizen (improvement)

Operations are
evolving toward
Just-In-Time.

IT system

Gap

Operations are fixed.

Therefore, they cannot
be changed easily.

Pursue inner production as much as possible

(Production/repair can be implemented on site. Further improvement can be expected.)

System engineers are improvement promoters.

(They can repair mechanisms and produce them on-site)

Just-In-Time is the law.

(It is impossible to introduce systems that make JIT levels lower.)

Work that IT systems should perform vs. work that the people should do
(Consideration on on-site improvement is required.)

Vitalization of the People & Organizations Cells

in TQM activities
TQM =Total Quality Management

TQM aims at improving process (work) quality as well as product quality.

TQM at Toyota means activities to vitalize the people and the organization.
(1) Vitalize the organizations cells.
(2) Make a workplace that enhances members willingness and vitality.
Visual control is one of the most critical issues.

TQM at Toyota
Customer
orientation
Harmonious
growth
Kaizen

All-hands

Sharing
critical minds
Communication

Building
Enhancing
a sense
awareness
of fellowship of improvement

Example of Visual Control of System Process by TLSC

All persons concerned can share information
through one TLSC sheet.

P rocess
Objectives of the
control
sy stem: .

basic structure
Loading
chart

System block chart

SC
L
T

Process
chart

Workers in charge

Computer
function
chart

Sy stem area
Rejecting
Fitting

Sealing
Read
magneti
c card.

Sealing

Normal

Fitting

Tag change

Process
control
chart

Floor space
booth

Use of TLSC

Electrodeposition

Past

Visual control of
system process

Notice vehicle
arrival.

Suspend
convey or.
NG

Writing
OK?

Notice vehicle
arrival.
Urge inputting into
Write vehicle data magnetic card.
into ID tag.
Recognize vehicle No.
Search vehicle No.

OK
Continu
e
Temporary storage of vehicle data

Edit vehicle specifications for ID tag.

Approx.
300 types at present
Managers & users
cannot understand the chart. Review together with managers/users.
Planning/review of information Planning/review of information system
for the production/distribution areas
system for the production
Analysis/streamlining of business
/distribution areas
process
System development
TLSC = Total Link System Chart

Determining Parts logistics

TLSC and digital engineering support logistics strategy
(1) Expressing current processes and situations in models
(2) Analysis: Each route is quantitatively analyzed
using the simulators (digital engineering)
(3) Determining improvement and reform plans
by the collaborative work with business partners
Example of Procurement logistics
<before improvement>
<after improvement>
- Cross dock
- Joint logistics
(Supplier to Cross dock)

Production plant
Cross dock

Design based on the knowledge database

Increased ratio of automation in design (of products and production processes)
based on the knowledge database
Increase time for thinking (to demonstrate creativity)
Conventional design
(based on individuals know-how)
Know-how in design procedures (individuals)
Design/production engineering standards
Manufacturing know-how (drawings)
Customer information about defects

Design based on knowledge database

Turning accumulated design/production
know-how into design logic

Information/knowledge sharing
Visualization of knowledge and know-how
(TLSC is one kind of tools)
Turning implicit knowledge to explicit one
Extraction of
knowledge
Knowledge
management DB
Knowledge
(Standardization
utilization
of implicit/
explicit knowledge)
Information/know
ledge processing

Management fundamentals of TPS

People are the greatest management resource
Autonomous distributed organization/system

Continuity is strength
Organization is strength
Effort surpasses genius

Created by: Noriaki Kurosu

Manufacturing industry in the digital economy

Global &Local
Kaizen &Innovation
IT for Reengineering
Coexistence among IT and People
Manufacture= Information
Processing & Producing Products
Sharing Information & Knowledge
The auto industry is also an information processing
industry using IT and people
industry

Creating products means creating people

Create structures that increase peoples intellectual capacity
Synergy of people (a type of computer) with IT

Thank you for your kind attention

<Biography of Satoshi Kuroiwa >
Mail: skuro@mb.ccnw.ne.jp
Tel/Fax: 81-(0)561-38-6093
- Visiting professor of Nagoya Institute of Technology
- Consultant for Manufacturing IT Innovation

- Masters degree from the Kyusyu University in 1969

- Toyota Motor Corporation (1969-2003/12)
Production preparation engineering, Plant construction engineering
and Logistics planning Division
FA (Factory Automation) and IT engineering Division ( 1985-1999)
IT Business planning Division(2000--2003)
- Chairman of Planning Committee of ECOM (2000/4-2004/7)
- Adviser or director of IT related NPOs