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Topic Outline      Introducing Toyota Australia                   &     Her Supply Chain Management                By Cong...
History of Toyota Australia• Toyota Motor Corporation Australia (TMCA) is a  subsidiary of Toyota Motor Corporation (TMC)....
Toyota Australia Current Business • Toyota Australia is the second largest vehicle   manufacturer in Australia. • Toyota A...
Business ContextThe business context of Toyota Australia is actually link tothe operating environment that consists of a n...
Toyota Australia’s supply network The basic of Toyota Australia’s supply  network:   – Supplier Association   – Effect of ...
Suppliers Association• The key to Toyota’s success would appear  to be their highly effective supplier  integration proces...
Effect of “knowledge sharing network” • The effects of knowledge sharing network   on the coordination of supply chain and...
The Upstream problems  After a series of research, few critical  factors were identified:  – Bundled outsourcing  – Logist...
Bundled Outsourcing• One of the important characteristics of Toyota Japan  suppliers system in terms of the inter-firm tas...
Logistic Challenge• One advantage of localization is closer  relationships facilitate collaborative  problem solving.• Lon...
Import of Vehicle Components• In the case of Toyota Australia, only 79  per cent of components are local content,  with th...
Upstream Entities  At current, Toyota Australia has an extensive  local supplier base from its 98 component  suppliers and...
Downstream Entities  In general, Toyota Australia has the  following downstream entities:  – Warehouse facilities in all m...
Internal entities  To build a car, the internal entities of the supply  chain which includes all of the in-house  processe...
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 manufa...
Enterprise Resource Planning System • SAP Automotive ERP Suit • Main means of information flow between   Toyota and its co...
IT Solution for TMC           E-Marketplace
TMC E-Marketplace• iStarXchange• Initiative with i2 Technologies Inc.• Allow subscripted members able to view a single  ca...
IT Solution for TMC        TradeMatrix system
TradeMatrix system• Initiative with i2 Technologies Inc• Automates with equipment manufacturer  and suppliers in terms of ...
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 autom...
IT Solution for TMCA  Main SAP Automotive Suit ERP             System
Main SAP Automotive Suit (ERP)• Main means of information flow between  Toyota Australia and its counterparts  worldwide.•...
IT Solution for TMCA  BEA Web-logic Integration 8.1
BEA Web-logic Integration 8.1• Integrated within the SAP automotive suit•  Main IT Backbone of TMCA• Based on Open Standar...
BEA Web-logic Integration 8.1•    Functions:    – Electronic proof of delivery    – Online accounts payable status for sup...
BEA Web-logic Integration 8.1Customised BEA  Application
BEA Web-logic Integration 8.1         Financial management functions
IT Solution for TMCA            SAP vs BEA
SAP vs BEA                                               International                                               colla...
IT Solution for TMCA    Electronic “Kanban”-Card              System
Electronic “Kanban”-Card System• Identical in function to the physical  “kanban” cards used by Toyota in Japan• 4 main pur...
Electronic “Kanban”-Card System           “Kanban”= Card (Japanese)
Electronic “Kanban”-Card SystemPARTS                                         TOYOTASUPPLIER                               ...
IT Solution for TMCA     Participant of iStarXchange
Participant of iStarXchange• Main e-marketplace between TMCA and its counterparts  worldwide• Allow subscripted members ab...
IT Solution for TMCA     Australian Automotive Network            eXchange (AANX)
Australian Automotive Network eXchange • Four major car manufacturers in Australia   are involved • Numerous service provi...
Australian Automotive Network eXchange • Main components:   – A network that is based on available Internet     technology...
Australian Automotive Network eXchange • Benefits includes:    – Pervasive supply chain communications    – Rapid applicat...
Australian Automotive Network eXchange                                                                                    ...
IT Solution for TMCA         Problem Statement
IT Solution for TMCA                 Weaknesses• Lack of alternatives in the domestic supplier  base and risk of currency ...
IT Solution for TMCA   Lack of alternatives in the domestic    supplier base and risk of currency                 exposure
IT Solution for TMCA      Lack of alternatives in the domestic supplier          base and risk of currency exposure• TMCA’...
IT Solution for TMCA      Problems arising in linear            supply chain
IT Solution for TMCA             Problems arising in             linear supply chain• Dispersed geographical location of t...
IT Solution for TMCA  Over-reliance on forecast planning for                production
IT Solution for TMCA         Over-reliance on forecast          planning for production         PARTS                     ...
IT Solution for TMCA Lack of Vertical industrial relations            environment
IT Solution for TMCA             Lack of Vertical industrial              relations environment• Currently industrial rela...
IT Solution for TMCA          Business Goals
IT Solution for TMCA            Business Goals2. Provide a comprehensive domestic   supplier base3. Provide initiatives fo...
IT Solution for TMCA        Solutions Overview
IT Solution for TMCA Goal 1: Provide a comprehensive domestic supplier baseSolution: Implementation of a supplier website ...
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...
Supplier Website
Supplier Website• TMCA focused on core competencies in   – high-end design   – engineering and   – system integration• Toy...
Supplier Website• TMCA first has to open its doors to the  domestic market suppliers  – Invest in their new concept of sup...
Supplier Website       Figure 6.   Access Flow From Toyota                   Australia Suppliers web site
Supplier WebsiteReasoning behind Goal 1 – The Business Needs•   Many of TMCA’s car components have to be imported due to t...
Supplier Website•   Web site functions     – Potential suppliers will be able to acquire information on the requirements o...
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-Orien...
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 bro...
Agent Oriented Domestic Marketplace  • Proposed e-Marketplace functions (contd.)     – Many-to-many relationships supporte...
Agent Oriented Domestic Marketplace  Integration with existing systems  • e-Marketplace architecture accommodates and supp...
Agent Oriented Domestic Marketplace Integration with existing systems (contd.) • Fundamental objective  improve coordinat...
Agent Oriented Domestic Marketplace  Integration with existing systems (contd.)    Figure 8: Logical concept of system Int...
Agent Oriented Domestic Marketplace  Agent-Oriented e-Marketplace  • Handles complex and non-deterministic interactions   ...
Agent Oriented Domestic Marketplace   Figure 9: The architecture of the e-Auction within the proposed e-Marketplace
Agent Oriented Domestic Marketplace  Agents for the proposed e-Marketplace:  • User interface agents     – support and col...
Agent Oriented Domestic Marketplace  Agents for the proposed e-Marketplace (contd.)  •   Market service agents:       – Sp...
Agent Oriented Domestic Marketplace  Reasoning behind Goal 2 – The Business Needs  • The acquisition process of parts, mat...
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   d...
General Overview• A complete modular solution,• reduce the bullwhip effect which causes  shifts in orders up and down the ...
General Overview• to provide process visibility across the  value chain, giving suppliers greater  control over the proces...
Graphical Overview
The Real Time Inventory Tracking Module • To be incorporated into the BEA system,   which comprises of 4 agents    – Forec...
Details of the Desired Agents to be work as Forecast Agent • enables suppliers to rapidly align demand and supply in the m...
Details of the Desired Agents to be work as Order Agent • enables suppliers to manage and track the entire purchase order ...
A Suitable Scenario•   The interest of this system is focused on a complete solution to provide a    real-time updates on ...
Topic Outline           Solution 4  An agent-based transport and   logistics coordination system
Solution 4An agent-based transport and logistics coordination systemWhy did introduce this module?• Goal 4: Vertical indus...
General Overview• An agent-based transport and logistics coordination  system (collaborative e-market), are designed to  a...
Framework for agent based supply chain coordinationThe Distribution Centers of individualautomotive manufacturers will sen...
Logistic Optimisation within Australia How does the logistics optimisation works within Australia: •    Based on ordered d...
Logistic Optimisation within Australia1.   In the first round of coordination, the “Price” afforded by the Distribution   ...
Logistic Optimisation within Australia •   The Transporter Agents perform local optimization using their own data     on r...
Global Optimisation• After the Manufacturer and Transporter  Agents finish local optimization process,  they will commit t...
Global Optimisation•   The optimization searching process    is to find the optimal point (see    Figure 12) which with ac...
A Suitable Scenario•   The interest of this system is focused on improving the current logistic    demand to provide custo...
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     w...
Topic Outline          Financial Analysis          By Loh How Whay
Financial Analysis• Increased ROI on Existing System   – Toyota’s WebLogic platform   – WebLogic development environment i...
Financial Analysis  Development Cost   Team of developers required by TMCA:    1    Project Leader    2    System Analysts...
Financial Analysis SUMMARY OF DEVELOPMENT COST Expenses                 Amount Salaries/wages           $385,000.00 Equipm...
Financial Analysis SUMMARY OF ANNUAL OPERATING COSTS Recurring expense               Amount Connectivity                  ...
Financial AnalysisSAMPLE BENEFITSBenefits/cost saving            AmountIncreased localization ofparts                     ...
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    –   Signifi...
Topic Outline        Organisational Challenge
Organisational Challenge•   COLLABORATION WITH PROJECT TEAM    –   IT staff to work closely with the development team     ...
Organisational Challenge• TRAINING USERS WITH NEW SKILLS & KNOWLEDGE  – TMCA Needs to provide proper training methods to b...
Financial Feasibility • 6 months to develop and deploy   → Complexity • Benefits   –   Shipping cost reduction;   –   High...
Topic Seminar         Cost Benefit Analysis
CostCategories of Cost                                                 Significant   Major       MinorDevelopment/maintena...
BenefitsCategories of Benefits                                                  Significant   Major   MinorIncreased local...
Organizational Feasibility • New solution to work in tandem with the   existing system   – Phased installation     • Ensur...
Conclusion• The study is being conduct in procedural manner.• Focus on current supply chain and what the current IT  setup...
Q & A Session
Toyota production-system-bussiness-case-studies-plan-19345
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  • Goal 3: Provide real-time updates on demand and supply allocation With the current forecast planning strategy wholly determined by Toyota, it will only allow suppliers to align their demand and supply in the mid-to-long term planning horizon. Although it allows the overall supply chain to arrive at a consensus of forecast or plan, nevertheless the common bullwhip effect which causes erratic shifts in orders up and down supply chain will still be present. Significantly, if each distinct entity makes ordering and inventory decisions with an eye to its own interest above those of the chain, stockpiling may be occurring simultaneously at as many as seven or eight places across the supply chain. Such stockpiling can lead to as many as 100 days of inventory waiting “just in case”. To resolve such situation, a real-time inventory tracking function should be incorporated into the current electronic BEA system which enables suppliers to manage and track the entire purchasing order lifecycle throughout the whole supply chain. With such function, all entities will be able to manage and track, in real-time, the complete end-to-end process for discrete, replenishment, demand pull from order creation, acquiring information from the Toyota Vehicle Order Processing System (TVOPS) residing in the main BEA WebLogic 8.1 system.
  • This table is what the information they need to sent, and agent require to do optimisation.
  • Transcript of "Toyota production-system-bussiness-case-studies-plan-19345"

    1. 1. Topic Outline Introducing Toyota Australia & Her Supply Chain Management By Cong Xue
    2. 2. 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.
    3. 3. 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
    4. 4. Business ContextThe business context of Toyota Australia is actually link tothe operating environment that consists of a number offactors. – The global industry operating environment; – Automotive investment trends; – Policy environment; – International market access; – Australian industry operating environment; and – Government policy environment.
    5. 5. 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
    6. 6. 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.
    7. 7. 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.
    8. 8. The Upstream problems After a series of research, few critical factors were identified: – Bundled outsourcing – Logistic challenge – Import of vehicle components
    9. 9. 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.
    10. 10. 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.
    11. 11. 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.
    12. 12. 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
    13. 13. 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
    14. 14. 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
    15. 15. Topic Outline Toyota’s Australia & Her Current IT Setup By Simon Chew
    16. 16. Topic Outline IT Solution for Toyota Motor Corporation (TMC)
    17. 17. IT Solution for TMC• Enterprise Resource Planning System (ERP)• E-Marketplace• TradeMatrix system
    18. 18. IT Solution for TMC Enterprise Resource Planning System (ERP)
    19. 19. Enterprise Resource Planning System Why ERP?
    20. 20. 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.
    21. 21. 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
    22. 22. IT Solution for TMC E-Marketplace
    23. 23. 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
    24. 24. IT Solution for TMC TradeMatrix system
    25. 25. TradeMatrix system• Initiative with i2 Technologies Inc• Automates with equipment manufacturer and suppliers in terms of : – site’s inventory management – warehousing – Logistic and shipping
    26. 26. Topic Outline IT Solution for Toyota Motor Corporation Australia (TMCA)
    27. 27. 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)
    28. 28. IT Solution for TMCA Main SAP Automotive Suit ERP System
    29. 29. 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
    30. 30. IT Solution for TMCA BEA Web-logic Integration 8.1
    31. 31. 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
    32. 32. BEA Web-logic Integration 8.1• 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
    33. 33. BEA Web-logic Integration 8.1Customised BEA Application
    34. 34. BEA Web-logic Integration 8.1 Financial management functions
    35. 35. IT Solution for TMCA SAP vs BEA
    36. 36. SAP vs BEA International collaboration Raw Material Suppliers End Customer SAP/BEA Dealers1st Tier/ 2nd TierSuppliers Manufacturing Warehouse/ Plants Parts Centers
    37. 37. IT Solution for TMCA Electronic “Kanban”-Card System
    38. 38. Electronic “Kanban”-Card System• 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
    39. 39. Electronic “Kanban”-Card System “Kanban”= Card (Japanese)
    40. 40. Electronic “Kanban”-Card SystemPARTS TOYOTASUPPLIER (TMCA) Material Requirements Forcast Orders Planning ANSI X12 830 Planning Forecasts Kanbans Delivery Docket Kanban Sorting Production LineDespatching Goods Kanbans Delivery Docket Receiving Accounts Remittance Advice Accounts Receivable EDIFACT REMADV Payable EFT EFT BANKING SYSTEM
    41. 41. IT Solution for TMCA Participant of iStarXchange
    42. 42. 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
    43. 43. IT Solution for TMCA Australian Automotive Network eXchange (AANX)
    44. 44. 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
    45. 45. Australian Automotive Network eXchange • 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
    46. 46. Australian Automotive Network eXchange • 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
    47. 47. Australian Automotive Network eXchange Software Gateway Router Dialup trading Trading Partner Partner Permanent Connection IBM Laptop Firewall Hardware Compatible Computer Gateway Modem Modem Equant Connect Exchange Point Permanent Connection AANXO Monitor CASP Trading Keytrust Partner Router Hardware Community Firewall Gateway Directory & Authentication AANX Framework
    48. 48. IT Solution for TMCA Problem Statement
    49. 49. IT Solution for TMCA 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
    50. 50. IT Solution for TMCA Lack of alternatives in the domestic supplier base and risk of currency exposure
    51. 51. IT Solution for TMCA Lack of alternatives in the domestic supplier base and risk of currency exposure• 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
    52. 52. IT Solution for TMCA Problems arising in linear supply chain
    53. 53. IT Solution for TMCA 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
    54. 54. IT Solution for TMCA Over-reliance on forecast planning for production
    55. 55. IT Solution for TMCA Over-reliance on forecast planning for production PARTS TOYOTA SUPPLIER (TMCA) Material Requirements Forcast Orders Planning ANSI X12 830 Planning Forecasts Kanbans Kanban Delivery Docket Sorting Production Line Goods Despatching Kanbans Delivery Docket Receiving Accounts Remittance Advice Accounts Receivable Payable EDIFACT REMADV EFT EFT BANKING SYSTEM
    56. 56. IT Solution for TMCA Lack of Vertical industrial relations environment
    57. 57. IT Solution for TMCA Lack of Vertical industrial relations environment• 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
    58. 58. IT Solution for TMCA Business Goals
    59. 59. IT Solution for TMCA Business Goals2. Provide a comprehensive domestic supplier base3. Provide initiatives for a non-linear, hub- based supply chain system4. Provide real-time updates on demand and supply allocation5. Vertical industry logistics collaboration
    60. 60. IT Solution for TMCA Solutions Overview
    61. 61. IT Solution for TMCA Goal 1: Provide a comprehensive domestic supplier baseSolution: 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 allocationSolution: Real-time tracking function module incorporated into the current electronic BEA system Goal 4: Vertical industry logistics collaborationSolution: An intelligent logistic coordinating agent in the form of a collaborative e-logistics hub.
    62. 62. Solution 1 Solution 1 Implementation of a supplier website By Joseph Baez
    63. 63. 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
    64. 64. Supplier Website
    65. 65. 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.
    66. 66. Supplier Website• 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.
    67. 67. Supplier Website Figure 6. Access Flow From Toyota Australia Suppliers web site
    68. 68. Supplier WebsiteReasoning 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.
    69. 69. 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.
    70. 70. Solution 2 An agent-based e-marketplace initiative
    71. 71. Solution Description• Goal 2 – Provide initiatives for a non-linear, hub-based supply chain system SOLUTION: Agent-Oriented Domestic e- Marketplace
    72. 72. Agent Oriented Domestic Marketplace Figure 7: Logical concept of the Domestic e-Marketplace
    73. 73. 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
    74. 74. Agent Oriented Domestic Marketplace • 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.
    75. 75. Agent Oriented Domestic Marketplace 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.
    76. 76. Agent Oriented Domestic Marketplace 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.
    77. 77. Agent Oriented Domestic Marketplace Integration with existing systems (contd.) Figure 8: Logical concept of system Integration.
    78. 78. Agent Oriented Domestic Marketplace 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
    79. 79. Agent Oriented Domestic Marketplace Figure 9: The architecture of the e-Auction within the proposed e-Marketplace
    80. 80. Agent Oriented Domestic 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
    81. 81. Agent Oriented Domestic Marketplace 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
    82. 82. Agent Oriented Domestic Marketplace 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.
    83. 83. Topic Outline Solution 3 Real Time Inventory Tracking Module By Nurhazman Abdul Aziz
    84. 84. 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
    85. 85. 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.
    86. 86. 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.
    87. 87. Graphical Overview
    88. 88. 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
    89. 89. 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.
    90. 90. 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.
    91. 91. 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.
    92. 92. Topic Outline Solution 4 An agent-based transport and logistics coordination system
    93. 93. Solution 4An agent-based transport and logistics coordination systemWhy 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.
    94. 94. 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.
    95. 95. Framework for agent based supply chain coordinationThe Distribution Centers of individualautomotive manufacturers will send theirdistribution requirement (DRP) to aLogistics Coordinator who will transformthe DRP into transport and manufacturingrequirements.These requirements will be broadcast tothe available transporters andmanufacturer’s plants so that they couldwork on their bids.After the bids are received, the logisticscoordinator will work on a global optimizedsolution before committing the distributioncenters.
    96. 96. 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
    97. 97. Logistic Optimisation within Australia1. In the first round of coordination, the “Price” afforded by the Distribution Center is not given to the Manufacturing Plants and the Transporters.3. Instead, the Logistics Coordinator waits for the service providers to bid with price.
    98. 98. Logistic Optimisation within Australia • 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.
    99. 99. 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)
    100. 100. 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.
    101. 101. 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.
    102. 102. Integrating the four solutions in a big solutions
    103. 103. 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.
    104. 104. Topic Outline Financial Analysis By Loh How Whay
    105. 105. 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
    106. 106. Financial Analysis Development Cost Team of developers required by TMCA: 1 Project Leader 2 System Analysts 10 Programmers SALARIES AND WAGES Team member Salary/wages for project Project Leader $50,000.00 Senior system analyst $35,000.00 System analyst $30,000.00 Programmer analysts $60,000.00 Programmers $160,000.00 System programmers $50,000.00 Total salaries and wages $385,000.00
    107. 107. Financial Analysis SUMMARY OF DEVELOPMENT COST Expenses Amount Salaries/wages $385,000.00 Equipment/installation $100,000.00 Trainning $200,000.00 Facilities $120,000.00 Utilities $70,000.00 miscellaneous $100,000.00 Licenses $10,000.00 Development Costs Graph Support Staff $50,000.00 Total $1,035,000.00
    108. 108. Financial Analysis SUMMARY OF ANNUAL OPERATING COSTS Recurring expense Amount Connectivity $50,000.00 Equipment/installation $20,000.00 Programming support $80,000.00 Annual Operating Costs Training & ongoing assistance $120,000.00 Graph Advertising $50,000.00 Total recuring costs $320,000.00
    109. 109. Financial AnalysisSAMPLE BENEFITSBenefits/cost saving AmountIncreased localization ofparts $300,000.00Efficiency and flexibility indealing with suppliers. $200,000.00Reduced shipping costs $250,000.00Increased sales of Sample Benefits Graphcars/parts $1,300,000.00Other savings $100,000.00Total annual benefits $2,150,000.00
    110. 110. Topic Outline Net Present Value & Return of Investment
    111. 111. NPV & ROI
    112. 112. Topic Outline Financial Challenge
    113. 113. 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.
    114. 114. Topic Outline Organisational Challenge
    115. 115. 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
    116. 116. Organisational Challenge• 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
    117. 117. Financial Feasibility • 6 months to develop and deploy → Complexity • Benefits – Shipping cost reduction; – Higher percentage of parts localization; – Increased profitability; – increased efficiency; – etc.
    118. 118. Topic Seminar Cost Benefit Analysis
    119. 119. CostCategories of Cost Significant Major MinorDevelopment/maintenance costs XGetting existing suppliers to use the system XReduction of shipping cost XAttracting new suppliers XDisruptions to staff XAdditional staff to handle the system XThreat of competitors taking advantage of similar technology and Xachieving similar efficiency improvements.
    120. 120. BenefitsCategories of Benefits Significant Major MinorIncreased localization of parts XExpanded sales and customer base XEfficiency and flexibility in dealing with suppliers. XGaining experience that would assist with future e-commerce ventures. XIncreasing the business’ competitive advantage XSuppliers remain loyal due the range of services offered X
    121. 121. Organizational Feasibility • New solution to work in tandem with the existing system – Phased installation • Ensures that organisational operations will not be affected dramatically during implementation. • Relationship between Toyota & suppliers improved → higher degrees of collaboration → System Introduction Highly Feasible
    122. 122. Conclusion• The study is being conduct in procedural manner.• Focus on current supply chain and what the current IT setup exist• Weakness were identified based on overall supply chain process• Goal are set to close the current gap of inefficiency identified.• Based on each goals, solutions are derived.• To prove worthiness of each solution, illustrates in terms of business needs are provided.• Other factors, such as challenges and financial, have proofed feasible for these proposed solutions to be implemented.
    123. 123. Q & A Session
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