Toyota Production System (Bussiness Case Studies & Plan)

Topic Outline

Introducing Toyota Australia

&

Her Supply Chain Management

By Cong Xue

History of Toyota Australia

Toyota Motor Corporation Australia (TMCA) is a subsidiary of Toyota Motor Corporation (TMC).

Toyota Australia’s origins go back to 1958.

The commercial vehicle business became Thesis Toyota in 1971

In 1988, Toyota’s local operations were unified to form Toyota Motor Corporation Australia

Toyota Australia currently build two models—the Camry and Avalon series.

Toyota Australia Current Business

Toyota Australia is the second largest vehicle manufacturer in Australia.

Toyota Australia has exported over 60,000 cars to over 20 different commercial locations worldwide in 2003.

Toyota is a people oriented organization that sees the development of its staff as a foundation stone for future business prosperity.

Toyota has long been recognized as one of the most efficient manufacturers in the world

Business Context

The business context of Toyota Australia is actually link to

the operating environment that consists of a number of

factors.

The global industry operating environment;

Automotive investment trends;

Policy environment;

International market access;

Australian industry operating environment; and

Government policy environment.

Toyota Australia’s supply network

The basic of Toyota Australia’s supply network:

Supplier Association

Effect of “knowledge sharing network” on supply chain coordination

Upstream and downstream entities

Suppliers Association

The key to Toyota’s success would appear to be their highly effective supplier integration process that over the past 50 years has enabled the excellence of their internal “ hoshin kanri” strategic management, cross functional process based management and Toyota Production System to be shared directly with their direct suppliers.

Effect of “knowledge sharing network”

The effects of knowledge sharing network on the coordination of supply chain and product customization forms the basis of Toyota Production System (TPS).

The aim is to have members identify themselves as part of an interdependent economic network.

The Upstream problems

After a series of research, few critical factors were identified:

Bundled outsourcing

Logistic challenge

Import of vehicle components

Bundled Outsourcing

One of the important characteristics of Toyota Japan suppliers system in terms of the inter-firm tasking portioning is that the outsourcing ratio is high not only in manufacturing but also in product development.

There is a difference in terms assembly process and the level of hierarchy in supplier.

Without bundled Outsourcing, it has first changed the internal process of the supply chain and most importantly, the number of first tier suppliers decreases and many of the suppliers ascended to the higher tiers and the hierarchy of the parts markers.

Logistic Challenge

One advantage of localization is closer relationships facilitate collaborative problem solving.

Longer supply lines required faster order processing, and this was done electronically.

Essentially, electronic kanban cards were identical in function to the physical kanban cards used by Toyota in Japan.

Import of Vehicle Components

In the case of Toyota Australia, only 79 per cent of components are local content, with the balance relying on imports.

This has been highlighted as one of the critical factors in terms of supply chain due to the fact the it affects the supply chain coordination as well as the upstream entities.

Upstream Entities

At current, Toyota Australia has an extensive local supplier base from its 98 component suppliers and 300 general suppliers.

In general, suppliers may be broadly classified into three categories:

Parts suppliers (Key component/ low assets specificity component)

Raw materials suppliers

Suppliers of equipment and tools

Downstream Entities

In general, Toyota Australia has the following downstream entities:

Warehouse facilities in all major states

Distributors in all major states

Dealer network of over 285 outlets across Australia

Internal entities

To build a car, the internal entities of the supply chain which includes all of the in-house processes used in transforming the inputs from the suppliers are as follows:

Production of Engines

(Once completed, the engines head straight for the final assembly)

Pressing of steel panels and parts

Welding of car shells

Painting of car shells

Final Assembly

Topic Outline

Toyota’s Australia

&

Her Current IT Setup

By Simon Chew

Topic Outline

IT Solution for

Toyota Motor Corporation

(TMC)

IT Solution for TMC

Enterprise Resource Planning System (ERP)

E-Marketplace

TradeMatrix system

IT Solution for TMC

Enterprise Resource Planning System (ERP)

Enterprise Resource Planning System Why ERP?

Enterprise Resource Planning System

One of the largest automotive companies in the world

Total of 51 overseas manufacturing companies in 26 countries / locations

Overseas network consisting of more than 160 importers / distributors and numerous dealers.

Enterprise Resource Planning System

SAP Automotive ERP Suit

Main means of information flow between Toyota and its counterparts worldwide.

Tighter collaboration links

With SAP, gain:

Outstanding strategic,

Operational,

Financial,

Marketing positions

IT Solution for TMC

E-Marketplace

TMC E-Marketplace

iStarXchange

Initiative with i2 Technologies Inc.

Allow subscripted members able to view a single catalogue to:

view information on parts

checking the prices and availability

conduct transaction online

forecasting supply and demand

delivery cycle

Improved forecasting

Enhancing the planning

Enhance deployment and replenishment of the inventory

IT Solution for TMC

TradeMatrix system

TradeMatrix system

Initiative with i2 Technologies Inc

Automates with equipment manufacturer and suppliers in terms of :

site’s inventory management

warehousing

Logistic and shipping

Topic Outline

IT Solution for

Toyota Motor Corporation Australia

(TMCA)

IT Solution for TMCA

Main SAP Automotive suit ERP system

BEA Web-logic Integration 8.1 (Integrated within the SAP automotive suit)

Electronic “Kanban”-Card System

Participant of iStarXchange

Major Player in Australian Automotive Network eXchange (AANX)

Main SAP Automotive Suit ERP System

Main SAP Automotive Suit (ERP)

Main means of information flow between Toyota Australia and its counterparts worldwide.

Tighter collaboration links between TMCA and TMC

Logistic and shipping

Overall Value Chain

BEA Web-logic Integration 8.1

Integrated within the SAP automotive suit

Main IT Backbone of TMCA

Based on Open Standard

Allow connection to their numerous partners in the value chain via an assortment of systems in Australia

Integrate the systems and processes that connects Toyota Australia and its trading partners

Functions:

Electronic proof of delivery

Online accounts payable status for suppliers

Fleet management integration

The Toyota Vehicle Order Processing System (TVOPS)

Advance Shipping Notice for vehicle deliveries

Vehicles inventory synchronization

BEA Web-logic Integration 8.1 Customised BEA Application

BEA Web-logic Integration 8.1 Financial management functions

SAP vs BEA

SAP vs BEA

Identical in function to the physical “kanban” cards used by Toyota in Japan

4 main purpose:

Sole means of requesting new parts

Send for every order shipment

Send to a specific supplier plant

Establishing the mix and volume criteria for assessing if an order was correct

Electronic “Kanban”-Card System “ Kanban”= Card (Japanese)

IT Solution for TMCA Participant of iStarXchange

Participant of iStarXchange

Main e-marketplace between TMCA and its counterparts worldwide

Allow subscripted members able to view a single catalogue to:

view information on parts

checking the prices and availability

conduct transaction online

forecasting supply and demand

delivery cycle

Improved forecasting outside Australia

Enhancing the planning outside Australia

Enhance deployment and replenishment of the inventory

Australian Automotive Network eXchange (AANX)

Australian Automotive Network eXchange

Four major car manufacturers in Australia are involved

Numerous service providers and non-key suppliers

Provides IP based Extranets for the automotive industry in Australia

Operates as a virtual point network (VPN)

Allows users to send date to each other in a reliable and secure manner

Main components:

A network that is based on available Internet technology

Operated by agreed and standardized service levels.

Demonstrating proactive management of trading partner connections

Practice the best standard of security and privacy for transactions and interoperability between service providers

Benefits includes:

Pervasive supply chain communications

Rapid application deployment across the supply chain

Lower cost of EDI

Faster Business Cycles

Simpler integration into trading partners' and customers' online e-business systems and strategies

Australian Automotive Network eXchange AANX Framework

Problem Statement

Weaknesses

Lack of alternatives in the domestic supplier base and risk of currency exposure

Problems arising in linear supply chain

Over-reliance on forecast planning for production

Lack of Vertical industrial relations environment

TMCA’s supplier agreements have to be obtained with the approval of the TMC

Import costs and extended time taken for components to arrive in Australia hinder TMCA’s JIT system.

Currency exposure will cause too great a financial risk for TMCA

Components also take longer to arrive the plant

Affect on the overall production costs and time taken to produce a “locally produced” Toyota cars

Problems arising in linear

supply chain

Dispersed geographical location of the TMCA supply chain infrastructure

Cannot currently communicate and interact with other members further downstream

No collaborate in spite of TMCA’s involvement with the AANX network

Escalate problems with ongoing redundant supplier delivery expenses

Problems arising in linear supply chain

Over-reliance on forecast planning for production

IT Solution for TMCA Over-reliance on forecast planning for production

Currently industrial relationships with automotive manufacturers in terms of sharing suppliers

Current AANX network relying on the freight company to do all the logistics planning

Automotive shipments require specialised vehicle transport ships

Business Goals

Business Goals

Provide a comprehensive domestic supplier base

Provide initiatives for a non-linear, hub-based supply chain system

Provide real-time updates on demand and supply allocation

Vertical industry logistics collaboration

IT Solution for TMCA Solutions Overview

Goal 1: Provide a comprehensive domestic supplier base

Solution: Implementation of a supplier website

Goal 2: Provide initiatives for a non-linear, hub-based supply chain system

Solution: An agent-based e-marketplace initiative .

Goal 3: Provide real-time updates on demand and supply allocation

Solution: Real-time tracking function module incorporated into the current electronic BEA system

Goal 4: Vertical industry logistics collaboration

Solution: An intelligent logistic coordinating agent in the form of a collaborative e-logistics hub.

Solution 1

Solution 1

Implementation of a supplier website

By Joseph Baez

Solution Description

Goal 1 – Provide a Comprehensive Domestic Supplier Base

SOLUTION: Implementation of a supplier web site

U.S. version of Toyota supplier web site

Toyota Supplier.com www.toyotasupplier.com

Supplier Website

TMCA focused on core competencies in

high-end design

engineering and

system integration

Toyota Australia needs highly focused core competency oriented suppliers.

Small and diverse companies though have the ability to display such potential to add

Innovation

Flexibility and

Strength to TMCA’s supply base.

TMCA first has to open its doors to the domestic market suppliers

Invest in their new concept of supply base

Target: 100% domestic suppliers

Supplier-centric web site

Provide

opportunities to expand TMCA supplier network.

Supplier Website

Supplier Website Figure 6. Access Flow From Toyota Australia Suppliers web site

Reasoning behind Goal 1 – The Business Needs

Many of TMCA’s car components have to be imported due to the lack of domestic suppliers

Application of the “right part at the right place at the right time” concept or JIT to lack the optimal efficiency throughout the TMCA supply chain.

The implementation of a comprehensive domestic supplier base is essential.

Provision of collaborative web site linking current TMCA online presence which provides similar functions to the Toyota supplier’s web site currently in use in North America

Allowing TMCA to have comprehensive overview of their current suppliers.

Also reducing the red-tape involved to be part of the TMCA supply chain; and most importantly

Provides TMCA with a channel to disseminate important supplier related information to its upstream entities .

Supplier Website

Web site functions

Potential suppliers will be able to acquire information on the requirements of becoming part of TMCA’s supplier network

Potential suppliers need only to download/complete an online form to join the network

Information such as

Supplier’s guide

Community activities; and

Any core information about TMCA’s current supplier’s network can be obtained from the website.

Connection links provided to domestic e-Marketplace

Registered e-Marketplace members:

Able to enjoy the privileges on what the e-Marketplace is offering

To be discussed in Solution 2

New opportunities for potential suppliers as well as existing suppliers who possess the capabilities to improve TMCA’s overall supply chain process using this proposed collaborative web site.

Supplier Website

Solution 2

An agent-based e-marketplace initiative

Solution Description

Goal 2 – Provide initiatives for a non-linear, hub-based supply chain system

SOLUTION: Agent-Oriented Domestic e-Marketplace

Agent Oriented Domestic Marketplace Figure 7 : Logical concept of the Domestic e-Marketplace

Agent Oriented Domestic Marketplace

General Overview

Proposed e-Marketplace functions

Will be able to support a broader base of services given further growth in e-Market infrastructure

Baseline interaction and directory services

Specialty market services , such as:

Dynamic trading ;

Cooperative supply chain integration and management

Enables and facilitates the relationship between business participants

Suppliers and service providers; and

Supporting systems

Proposed e-Marketplace functions (contd.)

Many-to-many relationships supported between TMCA and these business partners.

Enables both TMCA and suppliers to leverage economies of scale in their trading relationships

Allows access to a more liquid marketplace

Further allows the use of dynamic pricing models

e.g. Auctions (one of the services provided in the proposed e-marketplace)

Improve the economic efficiency of the market where uncertainty about prices and demands are common.

Integration with existing systems

e-Marketplace architecture accommodates and supports interfaces to the existing business models of the participant entities through cooperative supply-chain integration and management

To provide smooth and effective integration at the business level

There is a need for well-accepted interoperability standards, which must be meshed for supply chain integration to meet business demands.

e-Marketplace corresponds with the supply chain with flexibility and agility in responding to customer demand shifts without conflicts in resource utilization.

Integration with existing systems (contd.)

Fundamental objective  improve coordination within and between various participant business entities in the supply-chain

The increased coordination can lead to:

Reduction in lead times and costs

Alignment of interdependent decision-making processes

Improvement in the overall performance of each participant in the chain as well as the supply chain itself.

Integration with existing systems (contd.)

Figure 8: Logical concept of system Integration.

Agent-Oriented e-Marketplace

Handles complex and non-deterministic interactions usually involved in e-Marketplace

E.g. Auctions and ad-hoc service integrations

Components of proposed e-Market system for TMCA will be able to change its configuration to participate in different, often simultaneous roles in e-Marketplaces.

Completes tasks that would be manually impossible.

e-Marketplace agents play several roles

Will be able to coordinate, cooperatively or competitively, with the other agents, including HR

Agent Oriented Domestic Marketplace Figure 9: The architecture of the e-Auction within the proposed e-Marketplace

Agents for the proposed e-Marketplace:

User interface agents

support and collaborate with users in the same work environment to achieve the users’ goals

Business-specific service agents

Specialists that provide a collection of business-services available in the e-Marketplace

Performing the functionality of a business service is typically the cooperative integration of several agents including:

business-specific service agents; and

market service agents

Acts as a representative in the e-Marketplace for some functionality that is based on legacy applications or libraries, such as a product catalogue web site

Agents for the proposed e-Marketplace (contd.)

Market service agents:

Specialises in providing a collection of functions for generic e-Businesses in e-Marketplace environments in which a single entity (usually an agent) can perform its tasks in the e-Marketplace.

Market services (value-added and core services) are horizontal , i.e., services that are used in several business domains by several business entities.

Integration service agents

Also provide a collection of integration functions for a cooperative distributed system in which a single entity (agent, component, object, etc.) can perform its tasks.

Used by several distributed entities . E.g. a brokering agent provides a capability-based integration service in the e-Marketplace.

Another type of integration agent provides view-integration, which is a service to merge and map the description of business-objects (e.g., source schemas) in the e-Marketplace supported by the business ontology into an integrated view or schema

Reasoning behind Goal 2 – The Business Needs

The acquisition process of parts, materials and supplies from TMCA’s 100+ suppliers can be slow , expensive and ineffective

A “milk run” system could be possible within these groups of suppliers.

No coordination among suppliers have been established  Currently a missed opportunity

Current electronic Kanban (card) system is the only existing mechanism for ordering supplies between TMCA and its suppliers;

A linear supply chain is not able to efficiently support the JIT productions as significant collaboration among entities within the supply chain.

For these reasons an agent-based e-marketplace initiative will be suitable

TMCA will be able to eliminate its existing linear supply chain system to permit supplier collaboration and integration.

Topic Outline

Solution 3

Real Time Inventory Tracking Module

By Nurhazman Abdul Aziz

Solution 3 :

Real Time Inventory Tracking Module

Why did introduce this module?

GOAL 3: Provide real-time updates on demand and supply allocation

Solution: Real-time tracking function module incorporated into the current electronic BEA system

General Overview

A complete modular solution,

reduce the bullwhip effect which causes shifts in orders up and down the supply chain,

eliminating any stockpiling cause by the current forecast method of determining the quantity of components needed for the productions.

General Overview

to provide process visibility across the value chain, giving suppliers greater control over the process and

ensure synchronization of information with all partners regardless of size or geographic location.

Graphical Overview

The Real Time Inventory Tracking Module

To be incorporated into the BEA system, which comprises of 4 agents

Forecast Agent

Inventory Agent

Order Agent

Multi - Tier Visibility Agent

Details of the Desired Agents to be work as

Forecast Agent

enables suppliers to rapidly align demand and supply in the mid-to-long-term planning horizon,

allowing customers and their partners to arrive at a consensus forecast or plan.

provides alerts and notifications of demand supply mismatches and

can support a single-phase or two-phase commit planning process.

Inventory Agent

enables suppliers to align demand and supply by providing visibility to inventory status levels at multiple internal and external locations, as well as in-transit positions, enabling optimal levels of inventory.

allows partners to exchange key inventory-related information, such as demand-pull requests and target inventory levels

can be used to track supplier compliance to contract obligations such as min/max inventory levels.

exception alerts can be configured to flag any inventory-level violations.

Details of the Desired Agents to be work as

Order Agent

enables suppliers to manage and track the entire purchase order lifecycle through TMCA’s supply process.

Suppliers can manage and track, in real-time, the complete end-to-end process for discrete, replenishment, demand pull and/or blanket purchase orders from order creation through shipment, receipt, invoicing and payment.

Multi-Tier Visibility Module

allows TMCA to extend their demand/supply planning, order management and inventory management workflows beyond their first-tier partners to provide visibility to the processes executed between tier two, three and four partners.

allows to monitor demand/supply disconnects and exceptions throughout the extended supply chain,

providing tools to help identify the impact of problems identified multiple tiers away.

A Suitable Scenario

The interest of this system is focused on a complete solution to provide a real-time updates on the demand and supply allocation.

one of the distributors of TMCA has just received an order of purchase of a locally made Toyota Camry.

logs the order into the current BEA system, the information will immediately be sent Toyota Vehicle Order Processing System (TVOPS).

the real-time inventory module will acquire the new order information and be analysed.

sent to the respective suppliers to be updated onto their own system.

With such message flow, suppliers can get their supply ready for the next delivery to meet the JIT production in the shortest possible time needed.

Topic Outline

Solution 4

An agent-based transport and logistics coordination system

Solution 4

An agent-based transport and logistics coordination system

Why did introduce this module?

Goal 4: Vertical industry logistics collaboration

Solution: An intelligent logistic coordinating agent in the form of a collaborative e-logistics hub.

General Overview

An agent-based transport and logistics coordination system (collaborative e-market), are designed to accomplish transport and logistic coordination tasks among different automotive manufacturers in Australia.

Consist of 4 generic roles agents in supply chain:

Distribution Hub Agent

Logistics Coordinator Agent,

Manufacturer Agent

Transporter Agent.

Framework for agent based supply chain coordination The Distribution Centers of individual automotive manufacturers will send their distribution requirement (DRP) to a Logistics Coordinator who will transform the DRP into transport and manufacturing requirements. These requirements will be broadcast to the available transporters and manufacturer’s plants so that they could work on their bids. After the bids are received, the logistics coordinator will work on a global optimized solution before committing the distribution centers.

Logistic Optimisation within Australia

How does the logistics optimisation works within Australia:

Based on ordered demand established, the Distribution Hub Agent calculates the distribution requirements.

pass the DRP to the Logistics Coordinator Agent by pre-defined data interface. logistics coordinator splits the requirement into manufacturing and transportation requirements.

Logistics Coordinator Agent divides the distribution requirements based on a historical knowledge base.

In this database, the records show for a product, how long it will take for the Manufacturing Plants to produce a specific quantity, and how long it will take for the Transporters to deliver as shown in Table next

In the first round of coordination, the “Price” afforded by the Distribution Center is not given to the Manufacturing Plants and the Transporters.

Instead, the Logistics Coordinator waits for the service providers to bid with price.

The Transporter Agents perform local optimization using their own data on routes, schedules and consignments.

The Manufacturer Agents will perform local optimization using data on inventory, capacity and processing times.

The results of the optimization will be transferred to the Logistics Coordinator Agent for global optimization.

Global Optimisation

After the Manufacturer and Transporter Agents finish local optimization process, they will commit the orders back to the Logistics Coordinator Agent.

to combine the respective commitments to produce joint commitments by summing up price and lead times (for Q1, Q2 and Q3 respectively)

Global Optimisation

The optimization searching process is to find the optimal point (see Figure 12) which with acceptable difference with that of the customer requirement (with quantity, price and due date).

If the point identified is still not acceptable, a boundary box will be defined around the optimal point to set the lower and upper limits so that a second round of bidding can be done. This process will be repeated until the solution converges.

A Suitable Scenario

The interest of this system is focused on improving the current logistic demand to provide customers with the fastest delivery of their vehicles.

wish to send 20 cars to a country.

not feasible for TMCA to ship the cars.

With the system, TMCA invites other automotive manufacturers to join collaborative e-logistic marketplace.

individual automotive manufacturers will submit their orders to the e-marketplace.

Together with the shipping information provided by the freight companies, the system will conduct an optimization searching process based on manufacturer’s requirements (quantity, designation, price and due-date) and the shipping details until the search has reached a optimal point when is feasible for the shipment to be made to the country or even nearby ports with the least time needed for the vehicles to arrive to their final designations.

Integrating the four solutions in a big solutions

Integrating is made possible

In order to overcome the weaknesses as previously identified, the team have provide with individual solution to address each weakness.

the proposed solutions are based on open standards means that is inherently easy to modify.

designed to be flexible,

allows the stakeholders to decide on which system is to be integrated and which system to be run alone.

Additionally, exposing functionality and data as services across the enterprise also helps TMCA reduce overhead by eliminating the need for infrastructure duplication.

the messaging-oriented nature of these solutions enables the team to link sales, marketing, manufacturing, and financial applications in real-time, which improves customer service by making up-to-the-minute information accessible across our value chain.

Therefore, the team strongly suggests the implementation of the integrated solution.

Topic Outline

Financial Analysis

By Loh How Whay

Financial Analysis

Increased ROI on Existing System

Toyota’s WebLogic platform

WebLogic development environment is built on the standards-based Java 2 Enterprise Edition (J2EE) platform

Financial Analysis Development Cost

Team of developers required by TMCA:

1 Project Leader

2 System Analysts

10 Programmers

$385,000.00 T otal salaries and wages $50,000.00 S ystem programmers $160,000.00 P rogrammers $60,000.00 P rogrammer analysts $30,000.00 S ystem analyst $35,000.00 Senior system analyst $50,000.00 Project Leader Salary/wages for project Team member SALARIES AND WAGES

Financial Analysis Development Costs Graph $1,035,000.00 T otal $50,000.00 Support Staff $10,000.00 Licenses $100,000.00 miscellaneous $70,000.00 Utilities $120,000.00 Facilities $200,000.00 Trainning $100,000.00 Equipment/installation $385,000.00 Salaries/wages Amount Expenses SUMMARY OF DEVELOPMENT COST

Financial Analysis Annual Operating Costs Graph $320,000.00 Total recuring costs $50,000.00 Advertising $120,000.00 Training & ongoing assistance $80,000.00 Programming support $20,000.00 Equipment/installation $50,000.00 Connectivity Amount Recurring expense SUMMARY OF ANNUAL OPERATING COSTS

Financial Analysis Sample Benefits Graph $2,150,000.00 Total annual benefits $100,000.00 Other savings $1,300,000.00 Increased sales of cars/parts $250,000.00 Reduced shipping costs $200,000.00 Efficiency and flexibility in dealing with suppliers. $300,000.00 Increased localization of parts Amount Benefits/cost saving SAMPLE BENEFITS

Topic Outline

Net Present Value

&

Return of Investment

NPV & ROI

Topic Outline

Financial Challenge

Financial Challenge

PROJECT COST

Professional constraint programmers + months of development time

Significant investment amount from TMCA.

THE NEED TO TRAIN INTERNAL AND EXTERNAL USERS

Company staff, suppliers, customers, automotive manufacturers, etc.

PROPER INFRASTRUCTURE NEEDS TO BE PROVIDED

Users need to be capable of operating the system with minimal technical support

Requires a significant amount of time and money

Crucial to ensure project success.

THE NEED TO RETAIN SYSTEM EXPERTS

None of required skills currently available to develop/support the system

PREPARING FOR POSSIBLE OUTCOMES

Toyota should be prepared for project failure

A contingency plan

fallback to other alternatives e.g. AANX.

Topic Outline

Organisational Challenge

COLLABORATION WITH PROJECT TEAM

IT staff to work closely with the development team

Business requirements and project goals to be met

Constant communication between the development team and TMCA staff

COLLABORATION WITH AUTOMOTIVE MANUFACTURERS, SUPPLIERS & CUSTOMERS

Crucial requirements need to be identified -> successful solution

Effective system use by users

FOSTERING NEW RELATIONSHIPS

Marketplace will open up to potential customers and business partners

Vertical/Horizontal industry

Requires better customer & supplier relationship management

ADVERTISING THE NEW SYSTEM

Internal and external users mist be informed of new system

E.g. automotive manufacturers, suppliers & customers

TRAINING USERS WITH NEW SKILLS & KNOWLEDGE

TMCA Needs to provide proper training methods to both internal and external users of the system;

USERS: Internal staff, suppliers, manufacturers & customers.

ACHIEVING GLOBAL REACH

International market remains major challenge for TMCA

CONVINCING TMC TO ADOPT THE SYSTEM

Pressure on TMCA for successful and reusable implementation

MONOPOLY ISSUES

Blackbox method

Solution 4 will be an optional solution which requires careful consideration

Financial Feasibility

6 months to develop and deploy -> Complexity

Benefits

Shipping cost reduction;

Higher percentage of parts localization;

Increased profitability;

increased efficiency;

etc.

Topic Seminar

Cost Benefit Analysis

Cost X Threat of competitors taking advantage of similar technology and achieving similar efficiency improvements. X Additional staff to handle the system X Disruptions to staff X Attracting new suppliers X Reduction of shipping cost X Getting existing suppliers to use the system X Development/maintenance costs Minor Major Significant Categories of Cost

Benefits X Suppliers remain loyal due the range of services offered X Increasing the business’ competitive advantage X Gaining experience that would assist with future e-commerce ventures. X Efficiency and flexibility in dealing with suppliers. X Expanded sales and customer base X Increased localization of parts Minor Major Significant Categories of Benefits

Organizational Feasibility