© Abdul Latif Jameel IPR Company Limited. All Copyright and Other Intellectual Property Rights Are Fully Reserved. 1

Eng. Nazeer Gari Director Quality Assurance & Kaizen Abdul Latif Jameel – Motors 16 December 2015

2 Agenda

1.Abdul Latif Jameel Overview

2.Kaizen

3.Toyota Global Content

4.Practice & Implementations

3 Abdul Latif Jameel Overview

Ownership - Private family company

Founded - 1945

Headquarters - Corporate: Jeddah, Saudi Arabia - International: Dubai, United Arab Emirates

Employees - 16,500+

Operations - Operations in 31 countries across five continents: - MENAT (Middle East, North Africa & Turkey) - Europe - Asia Pacific - Sub-Saharan Africa - Latin America

Transportation Engineering & Financial Energy & Land & Advertising Consumer Manufacturing Services Environmental Real Estate & Media Products Services

Developer of Distributorships Commercial Automotive Automotive Advertising Renewable Energy Integrated Distributor (New Vehicles) Vehicles Components Financing Agency Residential Projects Dealerships Industrial Real Estate Commercial Aftermarket Parts Energy Efficiency Outdoor Media (New Vehicles) Equipment Financing Property Investments Pre-Owned Logistics Automotive Consumer Goods Environmental Vehicles Accessories Financing Services

Joint venture with

United Kingdom Germany Turkey China

Dealerships Dealerships Distributor Dealerships - HQ: Wolverhampton - HQ: Nuremberg - HQ: Istanbul - HQ: Chengdu - Operating since: 2006 - Operating since: 2004 - Operating since: 2009 - Operating since: 1998 - ALJ Branches: 2 2 - ALJ Branches: 3 - ALJ Branches: 2 - ALJ Branches: 11 3 - Dealers: 57 - Total Network: 59 Monaco

Dealerships 1 - HQ: Monaco - Operating since: 2003 - ALJ Branches: 1 59 1 11 Morocco 27 Distributors - HQ: Casablanca 60 32 - Operating since: 1995 3 - ALJ Branches: 11 431 - Dealers: 16 - Total Network: 27

Algeria Libya Egypt Saudi Arabia Japan

Distributors Distributor Distributors Dealership - HQ: Algiers - HQ: Tripoli - HQ: Cairo Distributors - HQ: Tokyo - Operating since: 1993 - Operating since: 2013 - Operating since: 1999 - HQ: Jeddah - Operating since: 2005 - ALJ Branches: 7 - ALJ Branches: 1 - ALJ Branches: 7 - Operating since: 1955 - ALJ Branches: 1 - Dealers: 53 - Dealers: 2 - Dealers: 25 - ALJ Branches: 199 - Total Network: 60 - Total Network: 3 - Total Network: 32 - Wholesalers: 232 - Total Network: 431

Japanese

改(KAI) + 善(ZEN) To modify, to change Think, make good, make better

9 What is KAIZEN?

The Japanese word “Kaizen” means

continuous improvement.

+ + + = + Waste Lead Time Productivity Quality GDI Profit

10 How Can You Generate More Profits?

Traditional Formula Toyota Formula

Sales Price = Cost + Profit Profit = Sales Price - Cost

Selling Price is decided by the market Profit Sales Sales Price Profit Price Profit Profit Cost Cost Cost Cost

(Monopoly) We need to reduce the cost price

11 7 Types of Muda (Waste)

- Eliminating MUDA (waste) Costs/Time -

7 Kinds of MUDA (waste) 1) Overproduction 2) Waiting Cost 3) Transportation 4) Over Processing/Quality 5) Inventory/Stock 6) Motion (Persons' movement) Current capacity = Operation + waste 7) Correction/Rework

12 7 Types of Muda (Waste)

The Pizza Business

Imagine you have a small Pizza shop!!!

13 7 Types of Muda (Waste)

1) Over-Production

14 7 Types of Muda (Waste)

1) Over-Production Muda of stock resulting in…

Over-Production will lead to other Muda!

15 7 Types of Muda (Waste)

2) Waiting

16 7 Types of Muda (Waste)

3) Conveying/Transportation

17 7 Types of Muda (Waste)

4) Over Processing/Over Quality

Pizza

18 7 Types of Muda (Waste)

5) Inventory/Stock Pizza

Pizza

Pizza Pizza Pizza Pizza Pizza Pizza Pizza Pizza Pizza Pizza Pizza Pizza Pizza

19 7 Types of Muda (Waste)

6) Motion/Persons' Movement

20 7 Types of Muda (Waste)

7) Correction

21 TPS TOYOTA Production System (TPS) TPS aims to eliminate MUDA (waste) occurrence in the process or in between the processes. Long Lead Time

Wasted Wasted Time Before TPS Process 1 Time Process 2 Process 3 Process 4 Process 5

Eliminate Wasted Time

After TPS 1 2 3 4 5

Lead Time Reduction

22 Cultivating Kaizen

With

Kaizen

Operation Operation Business

Cultivate Difference between

KAIZEN Companies with Kaizen & their Competitors

Competitors Time

23 Toyota Global Content

TOYOTA WAY ① Toyota Way（TW） Long-term prosperity and growth as an organization P

A D ② Toyota Business Practices（TBP） C

P ③ Hoshin Kanri（HK） A D

P P ④ （ A D A D On the Job Development OJD)

C C

P P P

A D A D A D

C C C TOYOTA WAY 2828 Toyota Way (TW)

Challenge

Continuous Improvement Kaizen.

Genchi Genbutsu

Respect. Respect for People Teamwork

29 TOYOTA Business Practices (TBP)

Concrete Actions & Processes Drive & Dedication

 Customer First 1. Clarify the Problem  Always Confirm the 2. Break Down the Problem Purpose of Your Work P 3. Set a Target  Ownership and Responsibility 4. Analyze the Root Cause Actions  Visualization (MIERUKA) 5. Develop Countermeasures  Judgment Based on Facts

 Think and Act Persistently TBP 6. See Countermeasures D Through  Speedy Action in a Timely Manner 7. Evaluate Both Results  Follow Each Process with C and Processes Values Evaluat Sincerity & Commitment e Toyota Way 8. Standardize Successful  Thorough Communication A Processes  Involve All Stakeholders

30 What does “Problem” mean to you?

31 Definition of “Problem”

Ideal Situation

Gap = Problem

Current Situation

32  Hoshin Kanri (HK)

Ideal State

P Company Level (Annual Policies)

P A D Vertical A D C

C P P A D A D P Group/BU Level C C

A D

P P Alignment C P P A D A D A D Division Level P C C C A D

C P P P P P

A D A D A D A D A D Department Level P

C C C C C A D P P P C P P P A D A D A D A D A D A D Individual Level C C C C C C Nemawashi Horizontal Coordination

33  On the Job Development (OJD) What?

Develop team members through “practice of daily work”

Why? Develop human resources who can self-reliantly put TOYOTA WAY into practice

Mutual TrustMutual & Respect Trust & Respect

Motivation 34 How is The Toyota Way Different?

TOYOTA WAY PRACTICE OTHER PRACTICES

People Focused

35 How is The Toyota Way Different?

TOYOTA WAY PRACTICE OTHER PRACTICES

Incremental & Continuous

Breakthroughs and Reversions

36 How is The Toyota Way Different?

TOYOTA WAY PRACTICE OTHER PRACTICES

To the People

By the People

37 We Embed TOYOTA WAY Culture and Mindset at ALJ

38 Practice and Implementations

We Embed TOYOTA WAY Culture and Mindset at ALJ

Hoshin Kanri Hoshin

(Problem Solving) (Problem

Toyota Business Practices Business Practices Toyota

On the Job Development Job the On

Kaizen Idea Bank Idea Kaizen

Circle

Quality Quality Control

40 Executive Training Camp

(2015) Competing to Achieve Kaizen Flag

(2012) On the Job Development Practices

(2011) Toyota Business Practices

(2010) Toyota Global Content Workshop

41 (2008 - Onwards) Hoshin Kanri Practice Hoshin Board Sample Toyota Business Practices Sample Toyota Business Practices Sample Quality Control Circle Sample Get Fit Kaizen Marathon and Kaizen Flag

• 1,500+ Kaizen Projects enrolled • 3,600+ associates were TBP OJD QCC trained (TBP & QCC)

Kaizen Via HAS Via

Marathon Hoshin Monitoring Hoshin

Kaizen Flag

47 National Kaizen Marathon

48 Kaizen Idea Bank - KIB

• 10,000+ Idea • 3,500+ Contributors • 25% Implementation

49 5S (Sort, Streamline, Shine, Standardize, Sustain)

The Challenge of Personal Mastery and Efficiency

50 How has The Toyota Way Helped ALJ?

Improved Guest Delight

100% GDI

90%

80%

70% Other Improvements: 60% 50% Market Share Gains 2010 2015 Increased Associate Engagement Reduced OPEX

51 Thank you