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8/3/2019 Toyota Motor Thailand
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Learningthe
way
of
capability
building
fromthecaseofToyotaMotorThailand
Amano,Tomofumi
AssociateProfessor
GraduateSchool
of
Economics
TheUniversityofTokyo
JBICLPEMworkshop
Comparativeperformanceassessmentfrom
Managementperspectives
ThecasestudyaimstobeusedinJBICLPEMworkshop.Thecitationisnecessarytobeapprovedbythe
author
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Contents
Japanesemanufacturingactivitiesabroadandabrief
history
of
Toyota ProfilesofToyotaMotorThailand(TMT)
Buildingthecapabilitieswhilebeingsmall
Overcomingtheeconomiccrisisandfurthergrowth Implications
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JapanesemanufacturingactivitiesabroadandabriefhistoryofToyota
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Japanesefirms foreignactivities Manufacturing
sectors
vs
Non
manufacturing
sectors
Source:METI
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Source:METI
OverviewofJapanesefirms foreignbusinessactivities Insidethemanufacturingsectors
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LongtermperformanceofJapaneseautomobilefirms
DataSource:DevelopmentBankofJapan
050100
150200250300350400450500
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
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Theriseofproductivityattheearlystageofgrowth
1959 Motomachi
1965
Kamigo
1966 Takaoka
1970 Tsutsumi
1974 Shimoyama1979
Tahara
Establishment
ofTPS
EijiToyodaandTaiichiOhno
1.Earlystruggleoflowproductivitiesandlowqualitieswithhostilelaborrelationshipand
financialshortageinthe1950s
2.Toyota
laid
off
their
employees
and
announcedJointlabordeclaration
in1962to
promisethelaborsecurities.
3.
TPS
was
developed
at
the
early
stage
of
their
growthtoovercomesuchshortages
Situationsbefore
TPS
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Upgradingof
productivityand
quality
Sustainthelongterm
laborrelationshipand
upgradingorganization
capabilities
Therobustproduction
systemto
the
demand
fluctuationanddiversity
Missions
Components
Justin
Time:
demand
pullproduction
Therespectofworking
standard
and
application
to qualitycontroland
Kaizen(Jidoka)
Normalizationofprocesses
basedon
the
cycle
time
(DohkikaandHeijunka)
Skillevaluation,
education
andtrainingtobemulti
skilledworkers
ThephilosophyofTPS(ToyotaProductionSystem)
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ThefirstexperienceofexecutingTPSoutsideJapan
Toyotatried
to
seek
joint
venture
partner
and
started
partnershipwithin1981
Twoheads:GMJohnSmithandToyotaEiji Toyoda ManagementisToyota,UtilizingtheGMsunusedfactoryinCalifornia,Corollawithbrand,400,000carsannually
There
were
many
opponents
inside
and
outside
the
firms,
howevertheypersuadedtheimportanceofthejointventure
TheimportanceofNUMMIs caseinthe1980s(USA)
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TheNegotiationoflaborissuescomesfirst Negotiation
with
UAW
(United
Auto
Workers
Union)
Rejectingthetraditionaljobbasedwagesystem,takingtheuniformwagesystem
toeveryfactoryworkersallowingthemulti
jobworkers,becauseoftheintroductionofTPS. Hiring
UAW
workers
Fullsupportfrommotherfactory
In1984,Takaokaplantaccepted250UAWworkerstotraintheconceptandskillsofTPS.Workerslearnedthebasicsandmanagerslearned
how
to
make
the
system.
Californiagovernmentsupportedthetrainingfee(3milliondollars).
JapanesemanagersopenedpartieseverySundayduringtheirstays.
Building
the
trust
through
practices
at
NUMMI
In1985theysucceedinlaunchingthe1st car
Fullandbestsupports fromToyotamotherfactory
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ToyotasanothersuccessinTaiwan
0
10
20
30
40
50
60
70
1994
2000
2001
2002
2003
2004
2005
10,0
00units)
(DomesticProduction)Imports)
0
5
10
15
20
25
30
1994
2000
2001
2002
2003
2004
2005
Toyota
Mitsubish
Mazda)
Nissan
Honda
Ford
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ProfilesofToyotaMotorThailand
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ToyotaMotorThailand(TMT)Establishment
1962
Capital7520millionBaht
Shareholders TMC 86.4%
Local13.6%
(Siam
Cement
10%)
Employees 13,500
Plants Samrong,Gateway,BanPho
Number
of
Dealers
119
Chairman PramonS. President SonodaM.
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TMTplants
Samrongplant(1964)
220,000unit/year
430,000
4,500emps
IMV13Tact
time
1.1
min.
TAW(1988)
55,000unit/year
40,000
1,100emps
IMV34Tact
time
4.0
min.
BanPhoplant(2006)
110,000unit/year
760,000
1,800emps
IMV
3
Gatewayplant(1996)
200,000unit/year
1,000,000
4,400
empsCamryCorollaViosWish
Yaris
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TMT organizationchartin2008
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TMThistory
Importingcompletecars
CKDassembly(196070s)
Carassemblytolocalmarket(197090s)
Dev.ofSoluna
IMVandglobalSamrongFactory(1964)
GatewayFactory(1996)SamrongFactory(1975)
BanPhoFactory(2006)
TAW(1988)
TMTHeadquarter(1989)
ToyotaThailand
Foundation(1992)
ToyotaEducation&TrainingCtr(1996)
APGPC(2005)
ToyotaAutomotiveSchool(2004)
Phase
Phase
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Buildingthecapabilitieswhilebeingsmall
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Buildingstrongdealershipsince1956.
Contacting60
reliable
local
commission
partners
Onestrongdealerinoneprefecture(territorysystem)
Onedealerhas510shops
Strong
service
system
(mechanics,
pure
parts
supply
network)
TMTsupportedtheeducationofsalespersonsandmechanics
Directcommunicationwithdealers(stocks)
Financial
backup
from
Bangkok
Bank
Creatingtrustwithlocaldealers
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Buildingthestablelaborrelationship
Learningfrom
Japanese
labor
relationship
and
proposing
Joint
labordeclarationin1993(quality,massproduction,productivity)
70%ofemployeesareunderoneunionandtheunionplaysan
importantrole
in
promoting
communication
between
the
companyandlabors.
TMTcontinuededucatingemployeestounderstandtheToyota
waybybothOJTandOffJT
Jointlabordeclarationandrelationshipwithunions
Whenlaunchingnewmodels,
Toyotacelebrateditwiththe
laborunion
leaders.(1993)
Localization of management and organizational capability
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TMTslocalizationpolicy(Thainization)
TMTeducated
and
promoted
local
managers
in
20
years
Japanse Thai
Advisorysystem(Kuroko
system)
Localmanagershouldstandonthelines.Japanesearestaffs.
Localizationofpromotioncommittee
Evaluationand
promotion
of
managers
are
all
localized
Localizationofmanagementandorganizationalcapabilitybuilding
President(1)
EVP/SVP(35)
VP(20)
GM/M(500)
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TMT organizationchartin2008
L li d i ti t TMT
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LocalizedorganizationatTMT
TMTinthe1990s
Appraisalbased
on
competencies
andperformance CurrentsalesorganizationinTMT
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Skill
formation
in
Toyotas
factories
in
JapanProfessional
Knowledge
Practical
Skills
Basic
Skills
LevelS
25
year
LevelA
10
year
LevelB
5 year
LevelC
1 year
Professional
Knowledge
Practiceand
maintenance
of
everyprocess
Practiceand
maintenance
of
80% processes
Practiceand
maintenance
of
60%processesBasics
Practiceof
20%
processBasic
skills
TeamleaderisfromlevelB
(Ref)Educationandtrainingtomultiskilledworkers
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OvercomingtheEconomicCrisisandfurthergrowth
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IMV
project
to
increase
the
export
of
completepickuptrucksandtheirparts
Internalcapabilitybuildingofsalesand
productionfor
domestic
market
in
Thailand
Bahtcrisis
in
1997
Productionvolume
decreasetoalmost30%.
SOLUNAprojectisstuck
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Maintainingemployeesthroughdeepcostcutting
TMTshowed
strong
commitment
to
uniting
with
the
whole
workforce,dealersandsupplierstorideoutthecrisis
Makingoperationsmoreleanandutilizingtheexcesslabor
toimplement
improvement
initiatives
and
additional
educationofemployeesandsuppliers
RespectstotheKingofThailand
Theking
of
Thailand
asked
TMT
to
stay
in
Thailand.
TMT
presentedSOLUNAtohisMajesty.Themotivationof
employeesrose.
Maintaininglaborrelationshipandsocialtrust
HismajestyinSOLUNA
IMV (I ti I t ti l M lti V hi l P j t )
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IMV(InnovativeInternationalMultipurposeVehicleProjects)initiatedbyJapaneseheadquarter
IMVproject
was
initiated
by
Japanese
headquarter
as
their
global
strategiestoemergingcountriesin2002.
DispersionofR&Dcentresto4areas1)
NagoyaTechnicalCentre
2)ToyotaMotorEngineering&
Manufacturing,NorthAmerica
3) ToyotaMotorEurope,R&Dand
Manufacturing
4) ToyotaMotorAsiaPacific
Engineering
andManufacturing(Thailand)
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IMVprojectinSamrong plantinThailand IMVprojectroomstartedinSamrong
plantin2002.
Maximum200
Japanese
engineers
moved
to
the
factoryandinitiatedtheproject
MotherplantisHinosHamura plant.TheymovedtheproductionlinestoSamrong
plantand
launchedtheir
production
for
exporting
their
turcks
13taskforceteams.Obeyaroommethod,E kanban,qualitygatesandothernewmethodswereintroducedwhenlaunchingthelines.
Thefirst
truck
was
introduced
in
2004
Thetacttimeisshortenedfrom1.7secto1.0secin2006.
Gateway plant
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Gatewayplant
Establishedin1996,Factoryofpassengercars(Vitz,Corolla,Camry,
WishandYaris),Sales(Domestic
110thousandandexport76
thousandcars)
,Increase
export.
Oneproductionlinetreats5differentmodelwithabout1minute
cycletimeandthehighestqualitiesinAsia.
Theleader
of
production
line
with
best
practices
in
Asia
Pacific
ThecontinuousKaizenandtheimprovementofworkers skills
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IMVpartsuppliesfromThailandtotheothercountries
OEM
parts
of
13,200
containers
per
year
areexportedto13countries
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HumanresourcedevelopmentatAPGPC
Overcomingthelimitationofmotherplantsystem
ThenumberofJapaneseengineeringstaffsarelimited
GPCstartedinToyotaMotomachi
plantinNagoyain2003
andsoonexpandedtoAsia,NorthAmericaandEU.
APGPS
started
in
2005
near
Samrong plant 700workersaretrainedbasicskillsin2months
Educatingtrainerstrainer
Spreadingtheirbestpracticestoothercountries
GlobalProductionCenter(GPC)
withintheMotomachi
Plant
Learningthebasicskillswithvisual
methods
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StrengtheningthetotalvaluecreationinThailand
ToyotaMotorThailand(1962)
AutoManufacturingand
Sales
Toyota
Motor
Asia
Pacific
Engineering&
Manufacturing(2006)
Technical&Production
Support
Toyota
Auto
Body(1978)
,
SiamToyota
Manufacturing(1987)
InternalPartsManufacturers
HinoMotor
Manufacturing(1964)
TruckManufacturing
and
Sales
Denso,Aisin
AutoPartsSuppliers
ToyotaTransport(1993)
Logistics
Toyota120 Lexus 3
Dealers
ToyotaLeasing1993),AICI
Leaseand
Insurance
ToyotaAutoWorks(1988)
AutoManufacturingand
Sales
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DealernetworkinThailand
D l t f d l t t
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StandardizationofOperationProcedure(SOP)
Times
of
dealer
visits,
Contents
of
communication,
Whom
to
talk, How
to
trainthem,Salesachievement,partsupplies,financialsupports
andhuman
skillsupportsetc.
Thesystemsarestandardizedandimprovedbystaffseverymonths.Theyarealsousedfortheeducationofstaffs.
PartsCentreatBanPho plant JITsupplyofservicepartstodealers Trainingcentreforservicemechanicsofdealers
TETC(Toyota
Education
&
Training
Centre)
in
1996
AfterservicehasbeenrecognizedasanimportantcashsourceevenintheeconomicslowdownlikeBahtcrisis.
Localizationofserviceengineersandthecreationoftheirown
managementsystem
Areal
marketing, DemandSupplymatching,Nationaldemandforecast,
CR(customer
retention)system,CSsurveyetc.
Communicationthroughthedealerclub
Developmentofdealersupportsystem
S i biliti t TMT d l
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ServicecapabilitiesatTMTdealers
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Useof
carrying
charge
in
purchasing
acar:
70
80%
in
Thailand
ToyotaLeasingThailand
Establishedin
1993
Shareholders:BangkokBank10.0%,TABT0.83%,TMT0.26%.
JapaneseBanks10%.
Caseof
carrying
charge
FinancialServicesofToyotaLeasingThailand
High level of integration among the departments of
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Highlevelofintegrationamongthedepartmentsof
manufacturing,sales,R&D,andhumanresourcewithhighly
localizedorganizations
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RegionaltechnicalandproductioncentreinThailand
TMAP(ToyotaMotorAsiaPacific,Thailand)in2006,supporting
productionand
part
supplies
in
Asia
pacific
region
TMAPThailandwillsupporttheregionwithTMAPSingapore
andToyotaTechnicalCentreAsiaPacific(TTCAP)inThailand
TheImportanceofsocialcontributionactivitiesinThailand
ToyotaThailandFoundationwasestablishedin1992
Currently400millionbahtfund
Supportingpublicactivitiesincludingeducation,lifesupport
andhealthcare.
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CEOEijiToyotavisitedKingseveraltimes
BirthdaypresenttoLoyalfamily
Launchingof
new
cars
in
1970s
Establishmentofnurseschoolin1995
Notonlylocalization,butalsosocialization
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TheeffectsofautomotiveindustryonSMEsinThailandTherearelargeclustersofmechanicsandpartsimportersaround
Bangkok
(Siancon)
SourcesandPhotosarefromT.RachottandShintaku(2008)
ManycarusersrepairgasolineenginestoLNGusableengines
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Implicationsfrombusinesshistory
l f h d
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The
importance
of
foreign
firms
operations
and
the
role
of
theirtechnologytransfersandlocalizationpoliciesinnationallevelofeconomicdevelopment
Market
attractiveness
+
export
manufacturing
advantage Theimportanceofbottomup styleeducationandtraining(Trainingtothemiddleclass)withinandoutsidetheMNEs.
Longterm
and
stable
labor
relationship
for
the
commitment
totheaccumulationoftechnologicalskills
Goodandreliablerelationshipofforeignfirmswithlocal
governmentand
overall
society
CreatingqualitativecapabilitiesnotlikeonlyvolumebuildingisveryimportanttoJapanesefirms
Someimplicationsfromthecasestudy
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(Ref)ToyotasnextchallengeinRussia(St.Petersburg)