Corporate Strategy of Toyota Kirloskar Motors
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  • 1. 13HM16 1 | S e m i n a r r e p o r t CORPORATE STRATEGY OF TOYOTA KIRLOSKAR MOTORS Abstract Toyota is one of the world's leading auto manufactures, offering a wide range of passenger car models. TMC (Toyota Kirloskar Motors) is a Japanese car manufacturing giant with manufacturing facility in 52 countries and products sold in 170 countries. TMC employees 334,000 people and have 56 manufacturing facilities over 6 continents. TMC is present business in areas related to Automobiles like vehicle finance, automobile parts manufacturing, agriculture equipment, aeronautical components and Logistics. TKM (Toyota Kirloskar Motor Pvt. Ltd.) is the Indian subsidiary of TMC (Toyota Motor Corporation). TMC is celebrating their 75 years of existence. TMC entered India in 1997 with the launch of Toyota Qualis which was the best selling Multi-Utility vehicle in the Indian Market. Aim of this seminar is to study the Corporate Strategy of Toyota Motors Corporation. Aim of this seminar is to study Corporate Strategy, Management Practices and Corporate Social Responsibility of TKM. Introduction to TMC Fig: TKM Showroom in Gurgaon, NCR Region of Haryana Toyota is one of the world's leading auto manufactures, offering a wide range of passenger car models. TMC (Toyota Kirloskar Motors) is a Japanese car manufacturing giant with manufacturing facility in 52 countries and products sold in 170 countries. TMC employees 334,000 people and have 56 manufacturing facilities over 6 continents. TMC is present business in areas related to Automobiles like vehicle finance, automobile parts
  • 2. 13HM16 2 | S e m i n a r r e p o r t manufacturing, agriculture equipment, aeronautical components and Logistics. TKM) (Toyota Kirloskar Motor Pvt. Ltd.) is the Indian subsidiary of TMC (Toyota Motor Corporation). TMC is celebrating their 75 years of existence. TMC entered India in 1997 with the launch of Toyota Qualis which was the best selling Multi-Utility vehicle in the Indian Market. 66 Years of Corporate Tradition Toyota is one of the biggest vehicle manufacturers, and one of the most widely known companies, in the world today. Toyota believes that there is always a better way - in everything that we do. We at Toyota Kirloskar Motor have always followed our global philosophy of continuous improvement (Kaizen). Our lineage of consistently making quality cars backed by quality services gives us the edge and insight to deliver to you, cars built to international quality standards yet keeping in mind the local sensitivities. Quality to us has never been just a word. It’s been a way of life at Toyota and will continue to be so. Toyota’s firm belief is in putting customers first has constantly enabled us to respond effectively to your needs, whether it's in terms of quality of product, service or driving experience. It is this very belief, throughout generations, that is responsible for Toyota’s renowned Quality Durability and Reliability (QDR) which has also led to our steady growth in the Indian automotive market backed by products and services that are loved and cherished. We are proud that today, over 1 million Indians are part of the ever growing Toyota family. We also strive towards developing a more sustainable future. Being pioneers in Hybrid Technology is our first step towards the same. Through initiatives focused on the areas of education, community development and the environment, we aim to create a company that works in harmony with nature and society. Toyota's Lexus and Toyota branded vehicles rank annually among the world's highest quality cars in third party surveys of customer satisfaction. Using such success as a springboard, Toyota is pursuing a policy of sustained development and hopes to use innovation and strong R & D to create cars that are greener, safer and more fun to drive. As a global company, Toyota realizes that local commitment is a prerequisite to success on a worldwide scale. Toyota's activities are highly appreciated around the world, a result of the company's devotion to customer-oriented activities and social contributions in every market it operates.
  • 3. 13HM16 3 | S e m i n a r r e p o r t Toyota Global Vision: Your Satisfaction Our Commitments Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people. Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile. We will meet our challenging goals by engaging the talent and passion of people, who believe there is always a better way. Executive Management at TMC Chairman of the board Takeshi Uchiyamada President, member of the board Akio Toyoda Executive Vice President, member of the board Satoshi Ozawa Nobuyori Kodaira Mitsuhisa Kato Masamoto Maekawa Yasumori Ihara Seiichi Sudo Directors Mamoru Furuhashi Kiyotaka Ise Koei Saga Shigeki Terashi Yoshimasa Ishii Ikuo Uno Haruhiko Kato Mark T. Hogan
  • 4. 13HM16 4 | S e m i n a r r e p o r t History of Toyota Motors Corporation Towards the end of the nineteenth century, Sakichi Toyoda invented Japan's first power loom, revolutionising the country's textile industry. January 1918 saw him create the Toyoda Spinning and Weaving Company, and with the help of his son, Kiichiro Toyoda, Sakichi fulfilled his lifelong dream of building an automatic loom in 1924. The establishment of Toyoda Automatic Loom Works followed in 1926. Kiichiro was also an innovator, and visits he made to Europe and the USA in the 1920s introduced him to the automotive industry. With the £100,000 that Sakichi Toyoda received for selling the patent rights of his automatic loom, Kiichiro laid the foundations of Toyota Motor Corporation, which was established in 1937. One of the greatest legacies left by Kiichiro Toyoda, apart from TMC itself, is the Toyota Production System. Kiichiro's "just- in-time" philosophy - producing only precise quantities of already ordered items with the absolute minimum of waste - was a key factor in the system's development. Progressively, the Toyota Production System began to be adopted by the automotive industry across the world. Kiichiro Toyoda had traveled to Europe and the United States in 1929 to investigate automobile production and had begun researching gasoline-powered engines in 1930. Toyoda Automatic Loom Works was encouraged to develop automobile production by the Japanese government, which needed domestic vehicle production, due to the war with China. In 1934, the division produced its first Type A Engine, which was used in the first Model A1 passenger car in May 1935 and the G1 truck in August 1935. Production of the Model AA passenger car started in 1936. Early vehicles bear a striking resemblance to the Dodge Power Wagon and Chevrolet, with some parts actually interchanging with their American originals. Since the company manufactured its first passenger vehicle in 1936, Toyota has continuously pursued the number one position for total customer satisfaction in all areas, ranging from manufacturing and products to sales and service. Toyota exported its first Japanese-made passenger car to the United States in 1957. Since then, Toyota has steadily expanded its global presence with the establishment of overseas bases. Rising from the ashes of industrial upheaval in post-war Japan, Toyota has become the largest vehicle manufacturer in Japan with over 40% market share. Toyota began to make inroads into foreign markets in the late 1950s. The first Crown models arrived in the USA in 1957, and by 1965, with models such as the Corolla, Toyota began to build its reputation and sales to rival those of domestic producers. The first Toyota imported into Europe was via Denmark in 1963. Toyota has con-tinued to grow in Europe's sophisticated and complex market, and in 2000 the company delivered its ten millionth car to a customer in Germany. In fact, growth is currently one of the main words in Toyota's European vocabulary, and the com-pany plans to reach annual sales of 800,000 in Europe by 2005. Toyota is number one for customer satisfaction in the majority of European countries and has built an excellent reputation across Europe for reliability and customer service. This enviable reputation, along with the support of a network of more than 25 distributors and 3,500 sales outlets, are important factors in supporting Toyota's European sales growth in the coming years. Although the Toyota Group is best known today for its cars, it is still in the textile business and still makes automatic looms, which are now computerized, and electric sewing machines which are available worldwide.
  • 5. 13HM16 5 | S e m i n a r r e p o r t From “TOYODA” to TOYOTA Toyota originated from the family name of the founder, “Toyoda”, with early vehicles produced by the company originally sold with a “Toyoda” emblem. In 1936, the company ran a public competition to design a new logo, which lead to a change in the brand name to what is now called “Toyota”. It has been regarded as a favorable transition from “Toyoda” to “Toyota”, because voiceless consonants sound more appealing than voiced consonants. In addition, through the concept of “jikaku” (counting the number of strokes in writing characters to determine good and bad luck), its eight-stroke count is associated with wealth and good fortune. Lastly, the change also signified the expansion of an small independent company to a larger corporate enterprise. About the Mascots and Chronology The front emblem from the first passenger car (the model AA) which started mass production in 1937. This mark is composed of the wings to convey speed and kanji “Toyoda” which was made into a design. A front mascot composed of the kanji mark “Toyoda” and the “shachihoko”, which is an iconic symbol of Nagoya, prefectural capital of Aichi and origin of Toyota. It was first used in Toyota’s first truck, the “G1 Truck.” Ever since its founding, Toyota has sought to contribute to a more prosperous society through the manufacture of automobiles, operating its business with a focus on vehicle production and sales. To celebrate its 75th anniversary, the company has compiled 75 Years of Toyota. Have a look at the company’s progress over the last three-quarter century. History of Technological Development Toyota is striving to develop automobiles that meet the needs of our customers while at the same time achieving an optimal balance between consideration for the environment, safety, drivability, comfort and reliability.
  • 6. 13HM16 6 | S e m i n a r r e p o r t 1867Birth of Sakichi Toyoda. 1924Sakichi Toyoda invents Toyoda Model G Automatic Loom. 1929Automatic-loom patent is sold to a British company. 1930Kiichiro Toyoda begins research on small gasoline-powered engine. 1933Automobile Department is established at Toyoda Automatic Loom Works, Ltd. 1935The Toyoda precepts are compiled. 1936The AA Sedan is completed. 1937Toyota Motor Co., Ltd. is established. 1938Honsha Plant begins production 1950Company faces a financial crisis; Toyota Motor Sales Co., Ltd. is established. 1951Suggestion System begins. 1955The Toyopet Crown, Toyopet Master and Crown Deluxe are launched. 1957 The first prototypes of the Crown are exported to the United States; Toyota Motor Sales U.S.A., Inc. is established. 1959Motomachi Plant begins production. 1962Joint Declaration of Labor and Management is signed. 1965Toyota wins the Deming Application Prize for quality control. 1966The Corolla is launched; business partnership with Hino Motors Ltd. begins. 1967Business partnership with Daihatsu Motor Co., Ltd. begins. 1974Toyota Foundation is established. 1975The prefabricated housing business begins. 1982 Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd. are merged into Toyota Motor Corporation. 1984 Joint venture with General Motors (New United Motor Manufacturing, Inc.) begins production in the USA. 1988Toyota Motor Manufacturing, USA, Inc. (present TMMK) begins production. 1989The Lexus brand is launched in the USA. 1992Toyota Motor Manufacturing (United Kingdom) Ltd. begins production. 1997The Prius is launched as the world’s first mass-produced hybrid car. 1999Cumulative domestic production reaches 100 million vehicles. 2000Sichuan Toyota Motor Co., Ltd. begins production in China. 2001Toyota Motor Manufacturing France S.A.S. begins production in France. 2002 Toyota enters Formula One World Championship; Tianjin Toyota Motor Co., Ltd. begins production in China. 2004The Toyota Partner Robot is publicly unveiled. 2005The Lexus brand is introduced in Japan. 2008Worldwide Prius sales top 1 million mark. 2010 Worldwide Prius sales top 2 million mark; Toyota and Tesla Motors agree on joint EV development. 2011 Worldwide Hybrid Vehicle sales top 3 Million mark; Toyota Motor Manufacturing, Mississippi, Inc. begins production in the USA. Mission for Technologies Statements to activities relating to the development of key technologies. Create vehicles that are popular with consumers.
  • 7. 13HM16 7 | S e m i n a r r e p o r t Activities & Initiatives o Provide world-class safety to protect the lives of customers. o Provide optimization of energy/infrastructure to local communities. o Putting high priority on safety and promote product development with the ultimate goal of “completely eliminating traffic casualties”. o Deliver cars that will stimulating and even inspiring and that will thereby earn smiles from our customers. o Addressing employees education under “Genchi-genbutsu” philosophy, which is to go to the source to find the facts to make correct decisions, build consensus and achieve goals at our best speed. o Through true mutual trust with partners, contribute to development of new technology and improved expertise. o Contribute for economic development of local communities with R&D operations functioning effectively in each region. Fast facts about Toyota You may just have bought yourself a shiny new Toyota sedan, or perhaps still considering buying one. But you may not know the brand well enough. For most people, the fact that Toyota is a Japanese car manufacturer is enough to help them make their decision of whether or not they want to buy that car. However, besides the long history of expansion in Japanese market, this famous brand has a number of impressive notes on the books. Fastest Selling Car Since 1966, Toyota has been manufacturing and selling Corolla every 37 seconds on average. As of 2013, the rate has gone much faster at every 27 seconds on average. The sales have hit an unprecedented 40 million, which is absolutely mind-boggling. Local Manufacturing Since 1957, Toyota has expanded the scope of its sales across the entire world. In almost 50 years, Toyota has managed to set up production bases and showrooms in over 170 countries and regions all over the globe. Even McDonalds doesn’t have as many restaurants worldwide! Because of Toyota’s successful policy of “producing vehicles where the demand
  • 8. 13HM16 8 | S e m i n a r r e p o r t exists,” there are more than 50 production bases in over 25 countries and regions including Australia. Leading Manufacturer of Hybrid Toyota has the largest hybrid model line-up in the world. The famous Toyota Prius, launched in 1997 as the first mass produced hybrid vehicle, has reached its target of 1 million unit sales each year, as of 2012. At Australia’s Altona factory, the Camry Hybrid is one of the vehicles manufactured there. Best Selling Nameplate According to the statistics, Corolla is the bestselling nameplate for vehicles all over the world. As of 2013, the total number of Toyota Corolla nameplates that have been sold is 30 million, which is astonishing. What is even more astonishing is that it has been the best-selling nameplate since 1997 when the cumulative sales went over 30 million units. You would think that it would have a stronger competition in today’s automobile market but Corolla still stands out as the best-selling one. First Country to Import Toyota Australia was the first country in the world to import Toyota Corolla from Japan in November 1966, which was just a month after the vehicle was launched in Japan. After that, Australia started manufacturing Corolla from 1968 until 1999. Even now, it is the most in-demand automobile in the country. In fact, one out of every five vehicles sold in the country is a Corolla. Most Ethical Multinational Corporation It has been four consecutive years since the Covalence Ethical Ranking has been declaring Toyota to be the most highly ranked ethical corporation in the world. Their rankings are based on data about product social utility, waste management, human rights policy and labor standards.
  • 9. 13HM16 9 | S e m i n a r r e p o r t Supporting Employment Prospects Toyota has a lot of obligations towards its employees. The company has created over 365,000 jobs in the United States alone. Similarly, there are 240 Toyota franchises, because of which, there are over 30,000 jobs being supported by the company. Best Resale Value According to many market researches that have been carried out in the last decade, Toyota has the most models for cars with best resale value in the market. From Land Cruiser for premium utility vehicles to hybrid Prius for alternative fuel vehicles, Toyota’s units sell like hot cakes in the previously owned vehicles businesses. Research and Development Every year, Toyota spends over $9 billion on research and development towards the future automobile technologies. Nine billion dollars per year means more than one million dollars an hour, which is more than any company in the world spends on research and development. Awards The Toyota Camry has won the U.S. Sales Crown 12 times in a row, which makes it the top selling car in the country. Management Practices at TMC MOTIVATION PRACTICES IN TOYOTA To hire a competent employee is not a simple task but after that, how to make your employees work efficiently, happily and being enthusiastic in contributing to Organizational goals are even more challenging. This article will try to analyze and explain what methods are practiced in Toyota to motivate its employees by using motivation theory models such as Maslow’s hierarchy of needs & Goal setting theory First, we will analyze how Maslow’s hierarchy of needs is applied in Toyota. Maslow’s Hierarchy of needs: Basically, Maslow’s Hierarchy of needs is pyramid of different levels of needs. The base at the lowest is Physiological needs, the next is Safety needs, Love & Belonging, then Esteem and the highest level is Self-Actualization (Please refer to Figure 1 for more details). Only when lower levels of needs such as physiological and safety are satisfied, then employees can achieve higher levels such as esteem and self-actualization, which make them work more efficiently, with more drive and more innovative ideas.
  • 10. 13HM16 10 | S e m i n a r r e p o r t Fig.: Maslow’s hierarchy of needs For Physiological & Safety needs: According to Liker (2004, p.210), all employees of Toyota are satisfied in lower level needs, they are well paid, their jobs are secured and the working environment is safe and organized. Besser (1995, p.390) also stated that Toyota provided child care and recreational facilities available on site for employees. All these benefits were provided to ensure their employees are safe and secured to work for a higher level of needs, which brings more results. For the needs of belonging: Besser (1995, p. 390) described the way Toyota promoted a strong team spirit and sense of belonging is by showing no discrimination between team members; or between managers and employees. In particular, “There are no private parking facilities, private cafeterias for managers, private offices, or private secretaries. All staff are encouraged to wear the company uniform and are called by their first name” (Besser, 1995, p.390). This practice makes employees really feel that they are a part of a community and creates a strong bond between employees and the company. For esteem & self-actualization: Toyota also encourages its employees to try to solve challenging problems to build up their confidence so that they can satisfy their higher needs in esteem and self-actualization. Also, by using a ratio of team leader to team members of 1 to 4, or 5; comparing to 1 to 20 or 30 in the industry, Toyota created 4 to 5 times the promotion opportunities for employees (Besser, 1995, p. 393). Ambitious workers are also promised that their assembly line jobs are temporary and after being promoted to team leader, they would receive a lot of training and job rotation opportunities. All employees are also encouraged to solve daily work problems innovatively, they would receive gift certificates for their ideas contribution.
  • 11. 13HM16 11 | S e m i n a r r e p o r t Next we will examine how Toyota applied Goal-setting in their work environment. Goal-Setting Theory According to Williams and McWilliams (2010, p. 272), Goal-setting theory proposed that “people will be motivated to the extent to which they accept specific, challenging goals and receive feedback that indicates their progress towards goal achievement.” From this definition, we can decompose it into 4 components, which are: - Goal specificity: i.e. goals should be clear, detailed and not vague. According to Obara and Wilburn (2012, p. 167), Toyota required goals must be clear and defined for example “total lead-time must be less than customer-order-to-delivery lead-time expectations”. - Goal difficulty: i.e. challenging goals are more motivated than easy goals. According to Bodek (2008, p.40), one of the challenging goal he found in Toyota is that managers even challenged workers to find solution to make things one Yen cheaper, and one Yen is even less than one US penny. Bodek (2008, p.41) pointed out that we even may not pick up one penny on the floor, not to mention trying to solve problems that save one penny. - Goal acceptance: employees should comprehend and support the goals. At Toyota, an “community of fate” ideology was developed, it means that employees are feeling that they and the organisation share the same fate, that they would succeed or fail together. (Besser, 1995, p.383). This helps the personal goals align with organisational goals. - Performance feedback: i.e. progress indication towards a goal. Fig. An Andon Problem Display Board That Communicates Abnormalities. If performance feedback is clear, employees are more motivated. For Toyota, it uses visual management systems such as Jidoka to communicate problems from a specific production line so that every employees can track their progress, this provides direction for them to move toward goals.
  • 12. 13HM16 12 | S e m i n a r r e p o r t TOYOTA HR PROCESS The right process will produce right result 1. Recruitment Lean manufacture strategy has become the standards of selection operation. In order to reduce the unnecessary cost during production process, employees should have other traits except the normal techniques (1) Teamwork & cooperation - social communication (2) Being hungry for the new things - enthusiasm (3) Consistent decision-making - studious Company needs the employees who can surpass the general duties of his position it needs Flexibility adaptability .Employees can work for a whole company not only a part of it. Toyota has strict recruitment process and multi-layered recruitment techniques. It calls for standardized behaviour. For instance, when Toyota is holding an interview, judgers would take ability, techniques, and characteristics into consideration. And in the assessment centre, interpersonal interaction plays an essential role in the decision-making of judgers, which tend to find the potential and ability of the employees. 2. Selection Toyota is primarily interested in hiring people with a strong work ethic. It prefers to select people who are familiar with hard work and have the motivation necessary to learn and perform. (Jeffrey K. Liker & David P. Meier, 2007, P14) As for team leader and group leader selection, it includes the characteristics that make a strong trainer. The team leaders know all the jobs in their areas, so they are able to train for all jobs. In this way the people in each area who know the works are training others to do the work. (Jeffrey K. Liker & David P. Meier, 2007, P64) 3. Training A common expression heard around Toyota is:’’ we do not just build cars, we build people.”(Jeffrey K. Liker & David P. Meier, 2007, P3) Every developing program, every kaizen activity and every quality defect is an opportunity to build people. That is the philosophy of training and development of Toyota. And training exceptional people is Toyota’s number one priority. This has become ingrained throughout the company, as a cultural value of the Toyota Way. Toyota is increasing the emphasis on training by opening three regional training centres called Global Production Centres—one in Thailand to support the Far East, one in England to support Europe, and the third in Kentucky for all North American plants. Satellite centres are being developed globally at every plant. (Jeffrey K. Liker & David P. Meier, 2007, P22)In addition, due to the lack of sufficiently skilled trainers to teach the throngs of new people
  • 13. 13HM16 13 | S e m i n a r r e p o r t being hired and assimilated, Toyota discovered in the process of developing formal training programs. And computers are an important part of training, including interactive learning systems with videotapes of the right and wrong ways to do the steps of the job. ( Jeffrey K. Liker & David P. Meier, 2007, P24) It eliminated a lot of training methods among individual trainers like exceptional trainers. 4. Performance appraisal Toyota focuses on total system efficiency rather than on individual efficiency. It is important to look beyond the individual’s work during the evaluation of the standardised work and to examine the total picture in the workplace. (Jeffrey K. Liker & David P. Meier, 2007, P141) Toyota encourages the isolation of variation within the work processes. It has a structure in place to allow the value-adding team associates to focus on their own tasks and not be distracted by other issues. (Jeffrey K. Liker & David P. Meier, 2007, P141) And this attach great importance in evaluating performance. 5. Compensation Now the secret of Toyota’s success is attributed to the fact that it hires only the best workers. Because of other extenuating circumstances, Toyota is able to pay higher wages and benefits and thus attract and retain exceptional employees. Again, there is an element of truth in this excuse. Toyota does pay good wages, but not the highest in the industry or across the nation. (Jeffrey K. Liker & David P. Meier, 2007, P12, P13) 6. Employee separation: According to Besser (1995, p. 391), Toyota has a history of not laying off their employees, they doing this by practicing Lean Management, it means that they only hire the best people available, work a little harder in good times, but in bad times they would not have to lay-off or fire any employees. For example, Besser (1995, p. 391) told a story of a worker who was injured on the assembly line, but instead of firing him, Toyota retrained him and gave him an office job. This practice would make employees trust and work harder for the company.
  • 14. 13HM16 14 | S e m i n a r r e p o r t Leading in Toyota There are several external and internal factors to consider as Toyota’s management use leading. Focus on the four functions are: globalization, technology, innovation, and diversity. In the Toyota production system and the Toyota way, let us know it is to provide employees a tool, so that they can continue to improve the working system, Toyota model just leaned more on employees, rather than reduce dependence on staff. Toyota way is a kind of culture, rather than just a set of improved efficiency and improvement tools and methods, you must rely on employees to reduce inventory, find out the hidden problem, and solve the problem, employees have a sense of urgency, purpose, and the concept of teamwork, because if they can’t solve the problem, inventory shortage situation occurs. During the daily operations, engineers, suppliers and supervisors, and workers, are all involved in problem solving and continuous improvement work, over time, everyone was trained to be more effective to solve the problem. Facilitate and strengthen the team cooperation spirit, must rely on the necessary help, training and reward. To encourage employees to properly maintain and continuous improvement process and the workplace environment. In Toyota, executives often encourage and help their employees. In any staff when in trouble, both the boss and colleagues, they will go to provide the corresponding help to get the job done. Because they think the team spirit is important. This not only allowed them to finish the work smoothly, also make them in leading to high personal accomplishment. And technology allows management to be leaders and to motivate their employees by sending congratulations e-mails to the top sales employee or by telling them what they have earned if they sell a specific amount of vehicles. Motivating employees helps keep the morale strong, and the Internet helps communicate motivational messages across different countries and departments. The important points of leading not only inspiring employees, but also communication with customer. In Toyota, they figured out to develop a new customer is equal to six old
  • 15. 13HM16 15 | S e m i n a r r e p o r t customers. To keep an old customer, by loyalty. Loyalty will be made for our customers bring more publicity, this is the most effective free advertising. A large number of cases and the fact that the wealth of the enterprise’s bring for loyalty customer. With a old customers have a good communication is very important. However how to develop new customer? The manager organizes information using technology such as the Internet, which the customers can search more information regarding their vehicles and their prices. They also organize information for the employees so they can see new information which is out, such as the recall on the Toyota vehicles. Then they can tell their customers what to expect and how to handle the situation. In Toyota company, managers give information to employees and customers. At the same time they will get employees and customer feedback from various aspects. This way make the managers understand the difficulty of employees and the company is what aspects need to improve and progress. The conversation with customer to understand customer needs, how to do let customer satisfaction products. You can also change many of the after-sales service is the need to increase. Our Most Valuable Asset – Our Employees
  • 16. 13HM16 16 | S e m i n a r r e p o r t Toyota believes in the basic philosophy of Mutual Trust and Respect and recognises employees as the most valuable assets for the company. We strive to provide stable employment, maintain and improve working conditions balanced with the growth of the company. By following the Toyota Way - the company's fundamental DNA, we have been able to transcend language and nationality. The Toyota Way is supported by two pillars: o Continuous Improvement: Our constant drive to put forth our best ideas and efforts. o Respect for People: We respect people and believe the success of our business is created by individual efforts and good team work. o From Human Resources Management perspective, we strive to: o Create a workplace environment where employees can work with their trust in the company. o Create a mechanism for promoting constant and voluntary initiative in continuous improvement. o Fully committed and thorough human resources development. o Promote teamwork aimed at pursuit of individual roles and optimisation of the entire company
  • 17. 13HM16 17 | S e m i n a r r e p o r t Planning process in Toyota Toyota is the third-largest auto manufacturer in the world, behind General Motors and Ford, with global vehicle sales of over six million per year in 170 countries. However, Toyota is far more profitable than any other auto manufacturer. Auto industry analysts estimate that Toyota will pass Ford in global vehicles sold in 2005, and if current trends continue, it will eventually pass GM to become the largest automaker in the world. What is the secret of Toyota success? The incredible consistency of Toyota s performance is a direct result of operational excellence. Toyota has turned operational excellence into a strategic weapon. Toyota s continued success at implementing these tools stems from a deeper business philosophy based on its understanding of people and human motivation. Its success is ultimately based on its ability to cultivate leadership, teams, and culture, to devise strategy, to build supplier relationships, and to maintain a learning organization (Liker, 2004). Fig.: Toyota Planning Process According to the book wrote by Jeffrey K. Liker, Ph.D., is Professor of Industrial and Operations Engineering at the University of Michigan we can comprehend what have made Toyota success. They have incredibly applied planning process to their operation step by step. From setting goal, develop commitment, develop effective action plan, track progress toward goal achievement, maintain flexibility. 1. Setting goal Toyota has identified specific company is to achieve simultaneously high quality, low cost, short lead times, and flexibility. 2. Develop commitment
  • 18. 13HM16 18 | S e m i n a r r e p o r t Then, the leaders try to motivate their employees because goals don’t encourage them to worker harder or smarter. Thus, they were armed with their shop-floor knowledge, dedicated engineers, managers, and workers who would give their all to help the company succeed. 3. Develop effective action plan They move to next step of planning is to develop effective action plans to their objectives. Toyota lists the specific steps (how), people (who), resources (what) and time period (when) for accomplishing a goal. 4. Track progress toward goal achievement After completing second step, they use the method of tracking progress toward goal achievement to get more motivating and rewarding and then gather and provide performance feedback to make adjustment in efforts, direction and strategy that will lead to dramatic increase in performance. 5. Maintain flexibility Finally is maintaining flexibility, which is the key to their operations. They learned from experiences and failures and improve them to satisfy their customers and get the best productions. They accept challenges with a creative spirit and the courage to realize their own dreams without losing drive or energy. They approach their work vigorously, with optimism and a sincere belief in the value of our contribution. Furthermore, they strive to decide their own fate. They act with self-reliance, trusting in their own abilities. They accept responsibility for their conduct and for maintaining and improving the skills that enable them to produce added value. Toyota understands that in a typical business system, meeting and exceeding the customer’s requirements is the task of everyone within an organization. And they comprehended the definition of customer to include both internal and external customers. Each person or step in a production line or business process was to be treated as a customer and to be supplied with exactly what was needed, at the exact time needed. Understanding Toyota’s success and quality improvement systems does not automatically mean you can transform a company with a different culture and circumstances. Toyota can provide inspiration, demonstrate the importance of stability in leadership and values that go beyond short-term profit, and suggest how the right combination of philosophy, process, people, and problem solving can create a learning enterprise. I believe all manufacturing and
  • 19. 13HM16 19 | S e m i n a r r e p o r t service companies that want to be successful in the long term must become learning enterprises. Toyota is one of the best models in the world. Though every company must find its own way and learn for itself, understanding the Toyota Way can be one giant step on that journey. (Liker & Meier, 2007) Fig: Planning Horizons of Toyota TKM: Toyota in India Toyota Kirloskar Motor Private Limited is a subsidiary of Toyota Motor Corporation of Japan (with Kirloskar Group as a minority owner), for the manufacture and sales of Toyota cars in India. It is currently the 4th largest car maker in India after Maruti Suzuki, Hyundai, and Mahindra. The company Toyota Kirloskar Motor Private Limited (TKMPL) according to its mission statement aims to play a major role in the development of the automotive industry and the creation of employment opportunities, not only through its dealer network, but also through ancillary industries with a business philosophy of "Putting Customer First". Globally, Toyota has indicated a strong and diverse commitment to the pursuit of harmonious growth through its technically advanced and environment-friendly products. There have been relentless efforts in the crucial fields of mobility, city transportation, resources, society and environment, through research & development. Protecting the environment has always been a priority at TKM, starting with the eco- friendly engines that are manufactured for the Toyota vehicles, to the advanced technology that is used for purification or recycling of waste water at the plant. Apart from this, the plant at Bidadi, Karnataka, is surrounded by a green belt, meets high environmental standards and has achieved the ISO 14001 certification in its very first year of operations. Quality is ensured in every vehicle that rolls out of Toyota Kirloskar Motor, through in-built audits at every process of the system. The company's operational excellence is based on the
  • 20. 13HM16 20 | S e m i n a r r e p o r t improvement tools and methods developed by Toyota under the Toyota Production System (TPS), greatly emphasizing superlative quality and minimal waste. In line with Toyota's growing comfort with its India operations, the company set up Toyota Kirloskar Auto Parts (TKAP), which commenced production of transmissions in May 2004, for its global requirements. Another initiative is the Toyota Techno Park India (TTPI), a non-profit industrial infrastructure company aimed at boosting local industries and related job opportunities. Setting benchmarks for the automobile industry, the manufacturing facility consists of 4 divisions (shops) – Press, Weld, Paint and Assembly. TMC Legacy
  • 21. 13HM16 21 | S e m i n a r r e p o r t Fig.: History of Toyota in India Vision 1. Delight our customers through innovative products, by utilising advanced technologies and services. 2. Ensure growth to become a major player in the Indian auto industry and contribute to the Indian economy by involving all stakeholders. 3. Become the most admired and respected company in India by following the Toyota Way. 4. Be a core company in global Toyota operations. Mission
  • 22. 13HM16 22 | S e m i n a r r e p o r t 1. Practise ethics and transparency in all our business operations. 2. Touch the hearts of our customers by providing products and services of superior quality at a competitive price. 3. Cultivate a lean and flexible business model throughout the value chain by continuous improvement. 4. Lead the Toyota global operations for the emerging mass market. 5. Create a challenging workplace which promotes a sense of pride, ownership, mutual trust and teamwork. 6. Create an eco-friendly company in harmony with nature and society. THROUGH THESE ACTIVITIES ESTABLISH A SUPERIOR BRAND IMAGE IN INDIA. Fig.: Marketshare of TKM in India Manufacturing facilities TKMPL's current plant at Bidadi (near Bengaluru), Karnataka is spread across 432 acres and has a capacity of 80,000 vehicles per annum. TKMPL's second manufacturing plant on the outskirts of Bangalore, Karnataka has a capacity of 70,000 vehicles per annum. Both plants have a combined capacity of 150,000 vehicles per annum. On 16 March 2011, it announced that it was increasing production to 210,000 vehicles per annum due to increase in demand for its models especially the Etios and Fortuner.
  • 23. 13HM16 23 | S e m i n a r r e p o r t With effect from June 1, 2012, Toyota Kirloskar Motor will be increasing the prices of Etios diesel and Innova by 1 per cent and Fortuner and Etios Liva diesel by 0.5 per cent. The price hike is on account of the weakening of Rupee. Toyota announced that Etios sedan and the Liva hatchback has posted sales of over one lakh units, hence Toyota is all set for giving its production a big boost.Toyota Kirloskar Motor (TKM) plans to hike the production capacity of its Etios series models by 75% by early 2013. Toyota Kirloskar Motors would launch its motor racing series in 3 cities in India next year. Industrial Relations On 16 March 2014, Toyota Kirloskar Motor temporarily suspended the production at two of its assembly plants in Bidadi,Karnataka whose production capacity was 310,000 units annually and has employee strength of 6,400. Cause for the shutdown was failure to reach an agreement with the union over the issue of wages, deliberate stoppages of the production line by certain sections of the employees and abusing & threatening of supervisors thereby disrupting the production for the past 25 days. Toyota Kirloskar Motor announced on 21 March 2014 to lift the lockout at the plants effective from March 24, 2014 with subject to a acceptance of a service condition which requires all the employees signing a undertaking on good conduct. On 22 April 2014, employees called off the strike after 36 days of standoff and resumed full operations. Toyota Product line in India
  • 24. 13HM16 24 | S e m i n a r r e p o r t Manufactured/Assembled locally o Toyota Corolla (launched 2003) o Toyota Innova (launched 2005) o Toyota Etios (launched 2010) o Toyota Etios Liva (launched 2011) o Toyota Fortuner (launched 2009) o Toyota Camry (launched 2002) Imported o Toyota Land Cruiser Prado (launched 2004) o Toyota Land Cruiser (launched 2009) o Toyota Prius (launched 2010) Discontinued o Toyota Qualis (1999-2004)
  • 25. 13HM16 25 | S e m i n a r r e p o r t Toyota Production System at TKM Kaizen (改善) Japanese for "improvement" or "change for the best", refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing, engineering, business management or any process. It has been applied in healthcare, psychotherapy, life- coaching, government, banking, and other industries. When used in the business sense and applied to the workplace, kaizen refers to activities that continually improve all functions, and involves all employees from the CEO to the assembly line workers. It also applies to processes, such as purchasing and logistics,that cross organizational boundaries into the supply chain. By improving standardized activities and processes, kaizen aims to eliminate waste (lean manufacturing). Kaizen was first implemented in several Japanese business after the Second World War Second World War, influenced in part by American business and quality management teachers who visited the country. It has since spread throughout the world and is now being implemented in environments outside of business and productivity. The concept Kaizen is a part of Toyota Production System and came into existence at TMC. Other concepts like Total Quality Management, Just-in Time, Lean Production and Six-Sigma are related to Kaizen. Toyota Production System (TPS) combines a balanced mix of human resources and robot technology for increased productivity. This system involves two important principles: Jidoka - building quality into the production system and ensuring damaged parts do not proceed to the next stage. Just In Time (JIT) - making only what is needed, when it's needed, and only as much as is needed. Eco Factory: As part of our sustainable plant initiatives, the plant is designed with an Eco-Factory concept to maximise the output with minimum input by creating a highly optimised manufacturing process. From our energy efficient servo press to our state-of-the-art global body line, we are able to reduce process steps to further increase our energy efficiency. We also use water borne paint and a water recycling system that recycles 40% waste water back into the process, thereby leading to higher resource optimisation and contributing towards a greener society
  • 26. 13HM16 26 | S e m i n a r r e p o r t In our drive to build the perfect automobile, selecting the components that go in to it becomes a key criterion for success. We at TKM believe that an innovative, capable and cost competitive supplier base is critical to our viability. We perceive suppliers and dealers as equal stakeholders in our drive towards sustainability. Supplier enhancement initiatives are designed to bring a sense of partnership in all our endeavours. Industry Academic Relations To ensure that only the highest level of automotive professionals work on Toyota vehicles, Toyota has partnered with industrial and technical training institutes all across India to create the Toyota Technical Education Program (T-TEP). Over 3000 students from these institutes have benefited from this Program so far, with over 600 students undergoing training on the latest automotive technology and service techniques every year. The curriculum of this Program includes on-the-job training at Toyota dealerships. With the help of T-TEP, training institutes will be able to develop a highly skilled technical workforce, with greater career prospects in the automotive service industry. The skill levels of manpower currently available remain quite low, and professionals are not trained for the repair and diagnostics of the latest models of vehicles available in the market. T-TEP aims to correct this imbalance by partnering with local training institutes and industry bodies. These highly qualified students then have the option to join the Toyota Dealers, where they get the opportunity to consistently provide “Q Service” to our customers. T-TEP was introduced in 2006 at Delhi in General Repair category. In the year 2009, The program has been extended to Automotive Body Repair & Automotive Paint Repair. This is first of its kind curriculum in India in partnership with State Government which provides the students with unique
  • 27. 13HM16 27 | S e m i n a r r e p o r t skills in automotive accident repair. T-TEP Program is fast becoming a benchmark in imparting automotive training and looking at the immense benefits to the automotive service industry and the society at large. Corporate social responsibility Commitment to Society As a responsible corporate citizen, Toyota Kirloskar Motor is constantly working towards the development of people, communities, and the earth at large. TKM's efforts over the years towards developing a prosperous society include rebuilding a local residential school, construction of two water tanks in rural Bangalore that benefit around 80,000 people; reconstruction of a local police station; awareness on environmental conservation for local schools; distribution of school materials like bags, books, computers, and chairs to under-privileged students; and donation of funds towards rehabilitating the victims of the Tsunami and the Gujarat earthquake.
  • 28. 13HM16 28 | S e m i n a r r e p o r t TKM believes and practices the theory of sustainable development. Our operations are standardised in a way so as to cause least impact on the environment. TKM had laid greater stress on Landscaping activities to develop greenary around. The landscaping activities add a bedight to the company. TKM has undertaken a plantation program wherein 3000 plants were planted on the boundary. Environment, Technology & Employment Toyota is committed to manufacture technically advanced and environment friendly products. Our plant at Bidadi surrounded by a greenbelt, meets high environmental standards and has also obtained ISO 14001 certification on 26th April 2001. Toyota has always believed that the best way to serve society is by providing automobiles that will not only make people happy, but will also be environment friendly. Wastewater at TKM is collected and purified to a level that can be used for fish ponds and rice fields. To realise high quality vehicle production at reasonable prices, Toyota seeks the best balance between human resources and advanced robot technology. As technology constantly evolves and employees improve themselves through daily work and training programs, Toyota's production process improves. Green Supply Chain Toyota Kirloskar Motor believes in bringing Cycle of Nature and Cycle of Industry together to live in harmony. Along with the growth of the company, we understand that sustaining and improving the present environment is equally important and our prime responsibility. As a part of this, TKM involves with all its stakeholders from the Design to Disposal process of the product manufactured. Supply Chain plays a vital role in this journey towards building a Sustainable & eco friendly company. All parts and raw materials required for manufacturing an automobile are sourced from various suppliers based at different geographical locations. The environment footprint of manufacturing and transportation of parts and raw materials will always be significant. Hence to achieve environment sustainability, we need to develop a Green Supply Chain, which will have a positive
  • 29. 13HM16 29 | S e m i n a r r e p o r t impact on the environment. Realizing this, Toyota has brought out the Green Purchasing Guidelines. Toyota Green Purchasing Guidelines (GPG) “Green Purchasing Guidelines” is a Toyota Global initiative which serves as a direction to enhance supplier’s environment activities. Based on Global guidelines, TKM launched its Green Purchasing Guidelines in 2007 to its suppliers. It is revised every 5 years to enhance the supplier eco initiatives. During the environment month Celebration 2013 TKM launched its New Green Purchasing Guidelines. Ongoing initiatives TKM started the Toyota Safety Education Program (TSEP) - an interactive learning programme designed to teach school children about road safety in the year 2007. It features interactive courses, traffic booths, an animated film, computer and board games, and an informative website. The Toyota Technical Training Institute (TTTI) was started in the year 2007 to impart technical know-how about automobiles, or Monozukuri (skilled manufacturing), to students who have the talent, but not the means, to pursue higher studies. This residential school aims to develop a sound knowledge base, individual skill sets, a strong body, and a positive attitude in every student. TKM in conjunction with Toyota Motor Corporation and its nationwide dealer network has initiated a unique training initiative - The Toyota Technical Education Program (TTEP). The special training module, launched in 2006, aims at enhancing the skill sets and employability of the students at the ITIs in the country. Conforming to its eco-commitment, Toyota, together with NDTV, conducted a host of eco-initiatives that culminated in India's first 24-hour live TV programme - Greenathon. The three-year nationwide environment campaign aims at creating
  • 30. 13HM16 30 | S e m i n a r r e p o r t awareness about issues that threaten the future of our planet. With an overwhelming response from India's leading corporate houses, top Bollywood stars, musicians, environmentalists, NGOs and educational institutions, Greenathon Seasons I and II have been tremendously successful. References http://Www.Toyota- Global.Com/Company/Vision_Philosophy/Toyota_Production_System/Images Besser, T. (1995, May). Rewards and Organizational Goal Achievement: A Case Study of Toyota Motor Manufacturing in Kentucky. Journal of Management Studies, p. 383-399. Liker, J. K., & Meier, D. P. (2007). Toyota Talent – Developing Your People The Toyota Way. Chicago, United States of America: McGraw-Hill. doi: 10.1036/0071477454 Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer. Madision, Wisconsin, USA: McGraw-Hill.
  • 31. 13HM16 31 | S e m i n a r r e p o r t