Leadership in TOYOTA Way
Masahiro Nonami PT. TOYOTA Motor Manufacturing Indonesia (TMMIN) April 28, 2017
0 Speaker Introduction
I joined TOYOTA Motor Corporation in 1977, have worked across the organizations including Japan, Thailand, and Indonesia.
Introduction of the Speaker
Year Career Journey
1977 Production Control
1980 Purchasing
1987 Human Development
1992 Human Resources
1997 Labor Relations
2003 PAD @ Shimoyama Plant
2006 TMT, TMAP-EM Masahiro Nonami 2010 TMMIN President Director (PD) Corporate Executive Advisory Director of PT. TOYOTA Motor Manufacturing Indonesia TMMIN Corporate Executive Advisory Director 2017/4~ (TMMIN) (CEAD)
1 TOYOTA’s Business in Indonesia
2 Business History of TOYOTA Indonesia
TOYOTA Indonesia was established in 1970 and celebrated its 45-year anniversary in 2016.
Major Milestones of TOYOTA Indonesia 1970s 1980s 1990s 2000 ~
’71 TAM Establishment ‘03 TMMIN Established ’11 40 Year Anniv. Overall (Separation of Production & Sales) ’16 45 Year Anniv.
’05 Fortuner Launch ’16 Sienta CALYA Launch ‘71 Sales Start ’07 Lexus Launch Sales ’04 Avanza、Innova Launch
’13 Etios Valco Launch ‘73 Vehicle Production ‘82 Engine Production Starts ’14 Yaris Launch Starts ‘87 CBU Exports Starts Produc tion ’13 Karawang 2nd Plant st nd st ’73 Sunter 1 Plant ’82 Sunter 2 Plant ‘98 Karawang 1 Plant Established Established Established Established ’16 Karawang 3rd Plant Established
th 1st KIJANG 3rd KIJANG 6 KIJANG FORTUNER SIENTA ETIOS VIOS YARIS Major (INNOVA) VALCO Produc tion Model
3 Developing Cars Suited to Indonesian Needs
TOYOTA has worked closely with the people, business partners, and government in Indonesia to develop cars suited to the needs of the country.
The Kijang Project
Car Unique to Indonesia
Introduced in 1977
Price: 1/3 of Corolla
Plastic/canvas windows
Boxy body outline
Developed at the request of the Minister of Industry
4 Overview of TOYOTA Indonesia
TOYOTA has two local companies in Indonesia, which are TMMIN for vehicle manufacturing and TAM for distribution, and in TMMIN, we proactively promote Indonesian Director.
TOYOTA Motor Manufacturing TOYOTA-Astra Motor Indonesia (TMMIN) (TAM)
Vehicle/ Parts Production and Export Business Area Vehicle/Parts Distribution
95% 5% Investment Ratio 50% 50%
9,300 (As of Dec 2016) # of Employee 1,600 (As of Dec 2016)
Production / Sales 218,229 389,241 (Share No. 1: 36%) Volume(2016)
TMMIN BOD Members TAM BOD Members PD VPD Director Director VPD PD
Dir : Darmawan Dir : Made Dana CEAD
T. Henry z Y. Nakata
Indonesian Dir : Nandy Dir : K. Inada
5 TOYOTA GROUP in Indonesia
TOYOTA contributes to the development of the automotive industry in Indonesia by cooperating with assembly makers and suppliers of the TOYOTA GROUP.
Composition of the TOYOTA GROUP in Indonesia
Component Brand Sales Vehicle Production Sales & Production
ADM* TOYOTA MOTOR DENSO AISIN SEIKI TOYOTA ASTRA MANUFACTURING MOTOR HMMI* INDONESIA TOYOTA TOYOTA (TAM) (TMMIN) INDUSTRIES BOSHOKU Sugity* TOYODA AICHI STEEL GOSEI ASTRA DAIHATSU MOTOR TOYOTA AUTO (ADM) JTEKT BODY
TOYOTA TOYOTA HINO MOTORS HINO MOTORS TSUSHO HOUSING SALES MANUFACTURNG INDONESIA INDONESIA AUTOMOTIVE (HMMI) TOYOTA BIO (HMMS) COMPRESSOR
(Note) – (*)Produces vehicle for TOYOTA brand, - (**)SUGITY CREATIVES is a subsidiary of TOYOTA AUTO BODY 6 TOYOTA Market Share in Indonesia
TOYOTA GROUP accounts for more than 56% of the market share as of 2016.
Indonesia Market Size and Market Share of TOYOTA GROUP (1,000 Units) 1.219 1.195 100% 1.200 1.098 1.062 90% 1.031 1.000 80% 891 70% 800 745 60% Total 596 56.2% 50% 600 534 38,8% 483 489 37,7% 36,4% 36,3% 34,2% 436 35,1% 35,4% 35,7% 40% 32,5% 31,6% 29,4% 39,0% TOYOTA 400 355 35,0% 319 30% 28,5% 17,9% 15,4% 15,5% 15,4% 14,8% 14,9% 15,4% 16,1% 20% 200 12,2% 13,0% 9,4% 9,1% 10,4% DAIHATSU 6,1% 10% 1,3% 1,2% 1,3% 1,9% 2,3% 2,4% 2,8% 2,9% 3,1% 2,8% 2,5% 2,1% 2,0% 1,2% 0 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 HINO* Source：GAIKINDO, Internal Information. *: Hino data is up to November for 2016 7 Importance of Indonesia for TOYOTA
Indonesia is the 4th largest market in the world for TOYOTA vehicles.
Rankings of TOYOTA Worldwide Sales (2016) (1,000 Units)
2.430 2.400
2.000
1.581 1.600
1.214 1.200
800
389 400 245 228 219 218 179 159
0 U.S.A Japan China Indonesia Thailand Saudi Arabia Australia Canada Brazil Phillipine Source：Internal Information 8 TOYOTA GROUP: Vehicle Production
TMMIN’s vehicle production in 2016 is around 210 K units. Including ADM, HMMI, and SUGITY, the TOYOTA GROUP production volume reached around 750 K units.
TOYOTA GROUP Vehicle Production Trend(2011- 2016) (1,000 Units)
900 TOYOTA DAIHATSU HINO/Sugity 772 800 738 748 46 25 700 649 56 671 27 40 600 507 500 27 516 502 522 452 400 454
300 365
200
209 218 100 160 192 116 155 0 2011 2012 2013 2014 2015 2016 Source: Internal Information 9 Export Volume Trend
The TOYOTA GROUP occupies around 90% (170K Unit) of the total vehicle export volume from Indonesia. The amount has decreased due to major model changes.
TOYOTA GROUP Export Volume・Share (2011- 2016) (1,000 Units)
350 TOYOTA Brand DAIHATSU Brand Export Market Share (TOYOTA + DAIHATSU) 300 84% 87% 84% 80% 250 78% 77%
200 181 173 170 6 13 1 150 133 136 17 19 100 84 175 14 160 169 50 116 117 69 0 2011 2012 2013 2014 2015 2016 Source：GAIKINDO, Internal Information Note: Export Market Share is up to Nov. 2016 10 Engine Production Volume
Engine production reached to 230 K units in 2016 after TOYOTA’s new engine plant opening.
TMMIN Engine Production Volume (2011- 2016) (1,000 Units)
500 DomesticEngine ExportParts New Karawang Producing Engine Engine Plant 450 Open* （Produce R-NR TR Engine 400 Engine) (1TR=2L, 2TR=2.7L) 350 328 300 99 Export 250 234 235 231 211 192 200 85 89 101 R-NR Engine 98 139 150 78 Export (NR=1.5L) 56 56 100 52 42 51 50 93 90 90 72 78 62 Domestic 0 2011 2012 2013 2014 2015 2016 New Source: Internal Information *Opened in Mar 2016 11 Destination for Export (Vehicle & Component)
TOYOTA assures high quality not only in Indonesia, but also in global level. The global management principle known as TOYOTA Way is sustaining the quality.
Destination Countries for Vehicles Destination Countries
Southeast Asia ≧70 Countries Philippines South Asia Malaysia Pakistan Thailand India Other 2 countries Middle East Kazakhstan East Asia Saudi Arabia Other 3 countries Japan UAE Taiwan Egypt China Other 8 countries Latin America Mexico Africa Venezuela South Africa TOYOTA Other 26 countries Nigeria Ghana Oceania Other 10 countries Australia INNOVA FORTUNER Tahiti Fiji
VIOS AVANZA ENGINE DIES
12 TOYOTA Way
13 TOYOTA Global Vision
TOYOTA aims to realize “Better Vehicle” and “Better City, Better Society” based on TOYOTA Philosophy and TOYOTA Way as foundation for realizing Customer Smile.
Image of TOYOTA Global Vision
Customer Smile
Better City, Better Vehicle Vision, Goal Better Society
TOYOTA Way Basic Principle TOYOTA Philosophy
14 Introduction of TOYOTA Way
“Continuous Improvement“ and “Respect for People“ are common values and methods shared among all TOYOTA people in the world. Today’s focus point is “Respect for People”.
TOYOTA Way Challenge Continuous Kaizen(Continuous Improvement) Improvement Genchi Genbutsu(Solving Problems at the Source)
Today’s Focus Point A Respect We respect others, make every effort to understand each other, take responsibility, and do our best to build mutual trust. 1 Respect for stakeholders 2 Mutual trust and mutual responsibility Respect 3 Sincere communication for People B Teamwork We stimulate personal and professional growth, share the opportunities of development and maximize individual and team performance. 1 Commitment to education and development 2 Respect for the individual ; realizing consolidated power as a team
15 TOYOTA Way: Respect for People A Respect
16 A 1 Supply Chain of Automotive Industry
Build win-win relationship and prosper together with suppliers who supply 20,000 to 30,000 parts per vehicle.
Image of Supply Chain of Automotive Industry Approx. 400 companies Approx. 200 companies
Tier 2/Tier 3 Tier 1 Supplier Supplier Assembler Domestic Sales
Supply Raw Material Tier 2/Tier 3 Tier 1 Chain Manufacturers Supplier Supplier
Export Tier 2/Tier 3 Supplier
Raw Material Smaller Parts Units Vehicle
Business Sales Areas Steel Servo Sub & Motor Blower Air Conditioner Assy Vehicle After Service with Fan (HVAC) Damper
Resin Total 20,000~30,000 parts 17 A 1 T2/T3 Supplier Development
To further strengthen the industry in Indonesia, TOYOTA is committed to work together with T1 suppliers to help T2/T3 suppliers implement the TOYOTA Production System.
Support of TOYOTA with T1 Suppliers Actual Improvement Case
Improve Inventory Management TOYOTA work w/ T1 supplier to develop the Monozukuri skill and mind of T2 suppliers
Issues of T2/T3 Suppliers to be Solved
Working Condition 1 2 Standardized Work Safety
First In First Out 3 4 Inventory Level Operation
18 A 1 Material and Parts Localization
TOYOTA is conducting material localization for competitiveness enhancement and contributing to upstream industry in Indonesia.
Material Localization Progress Localization Ratio
2016 2017 2018 2019 2020 True Localization Ratio
Localized by Krakatau Steel Resin Localization（9 Feb’17) Localization Ratio 100% Local Production
Steel (JFE, Nippon Steel, start localization gradually) 95% 80% 90% 85% Localized by Chandra 85% 85% 85% Asri(CAP) & Hexa 60% 80% Resin Local Production 60% Localized by 40% 80% CAP & Michelin Main Activity 75% 65% 60% 60% 61%
Local Rubber Synthetic Production 20% 45% The inauguration of resin 38% material for TOYOTA vehicle in Localized by Inalum cooperation with Chandra Asri Petrochemical (CAP). 0% Local Production 2004 2014 2015 2016 2017 2018 2019 2020
Aluminum (SOP)
19 A 1 SME Development: Supporting Casting Company in Central Java
TOYOTA is supporting MoI and IOI for local casting companies improvement in Central Java to improve their safety and production performance from July 2016.
TOYOTA's Support Activities for Local Casting Companies
Plant Arrangement Activities (5S) Safety Production Activities
Before Support
After Support
TOYOTA Indonesia supports safety improvement and efficient production operations for three SME. (Main supporting contents: 5S Education, Safety Education, Efficient Production Process, Quality Improvement etc.)
20 A 2 3 TOYOTA GROUP Employment
TOYOTA GROUP is working to nurture the automobile industry and peripheral industries in Indonesia and contributes to securing employment of about 300,000 people.
Automotive Related Industry Number of Related Companies and Employees Final product Number of Companies Number of Employees Assembly make Vehicle 1 (TMMIN) 9,300
Automotive Tier 1 Unit About 200 About 110,000 Assembly supplier (Engine, Industry Transmission etc.)
Tier 2/3 supplier Component About 400 About 130,000
Sales Sales 1 (TAM) 1,600 Forwarding Industry Dealer・Forwarding・Others About 700 About 40,000
Total Over 1,200 Over 300,000
21 A 2 3 Company-Labor Communication
Same as global TOYOTA, TOYOTA Indonesia communicates its operational status to employees in detail, which will be a base for in-depth negotiations about salary and bonus.
Wage Negotiation Scheme Bonus Negotiation Scheme
Rule Index PA Decide Negotiable Managers based on Discretion certification Productivity Index Used Variable Negotiation for Negotiation Bonus Effort Hour rate Not Scheme Decided based Profit Base Time per unit Negotiable on discussion (Max 2 months) Union Labor cost per unit between Sales to labor cost ratio Members company and Labor cost per person Fixed union 4months Salary Sales per person Bonus Support Multi-Communication Scheme
Business Forum Forum Forum Multi-time Company Communication Executive Location Minor Communication (Company Level) (Director Level) (Manager) (Dep Manager Level) Between 2 time / year 4 time / year 6 times / year Every Month Company & Union as Foundation . Involving management to staff level, TOYOTA communicates its Labor Union financial/operational situation to employees several times a year. . In addition, KPIs and problems/concerns in workplaces are shared monthly.
22 A 2 3 Productivity Committee
TOYOTA Indonesia established Productivity Committee in order to improve company competitiveness together with labor union. Productivity Committee
• Scheme •Activities Cooperation Forum o Launch supplement material for bipartite forum Develop regular message from management on bipartite forum, includes convey message to all Management Communicate Union members through shop-steward
• Productivity discussion; Workplace genba o Promote genba management on ergonomic issue, new comer issue
E.g. Ergonomic issue (Yarinikui), New comer issue
Member Voice Joint Genba
Involvement of respective DH and DpH in each shop Shop-steward coordinator
23 TOYOTA Way: Respect for People B Teamwork
24 25 B 1 Organization Structure
TMMIN is applying nearly same management structure as global TOYOTA.
Role by Position （ ） # of people Department Role ＜Management range＞ Head (DpH) • Head of the site Section Manage human resources and expenses (158) among groups Head (SH) Section Make sure every line is operating in safe and appropriate manner Head (SH) • Supervisor of a group <4 GLs> Drive group management based on （ ） Group 474 thorough standardization, improvement Leader(GL) Group of processes and human resource … … … Leader(GL) development through detailed direction <3 TLs> • Responsible person for stable daily （991） Team production activity Lead TM regarding standard operation Team Leader(TL) … … observance. Perform standard process if Leader(TL) needed. <8 TMs> （6,273） Team • Executer of standard operation Follow standard procedure and perform Team … … … Member(TM) stable operation Member(TM)
26 B 1 Employee Training Structure
TMMIN is applying nearly same training structure as global TOYOTA.
Training by Rank: Engineer
TCS Workplace Communication Skill TBP for Manager Problem Solving Management TBP Problem Solving
TPS Observe the Standard Operation and Kaizen Standard Operation TJI How to Teach Job
Perform the Standard Basic Skill Operation
QC Circle QC Circle Education QC Circle QC Circle FACILITATOR Leader Education Advisor Education Understand Education the Role Safety、Company Regulation, TOYOTA TL Role Education GL Role Education CL Role Education Way
TM TL GL SH
27 B 1 Education Program for Core Human Resource Development
Item Program TOYOTATeacher/Trainer provides own education programVenue to develop core human resource for Indonesia a. Toyota Way ● Teacherautomotive from University industry. or TIA b. 5R PolytechnicTOYOTA Learning Center TOYOTA Indonesia Academy ICT Program c. Safety Awareness ● TMMIN Trainer d. Fundamental Skill e. Element Work Knowledge (10%) f. Basic TPS g. Basic TJI h. QCC Learning center provides comprehensive TOYOTA opened TIA in 2015 which TOYOTA is proactively promote oversea i. Suggestion System practical training and promotes skills and provides education program for the training to Japan to study advanced j. Industrial Relation knowledge transfer amongst employees. engineering. engineering skills. 【Information】 【Information】 【Information】 Experiencing 6 job in line (Level 3) ● TMMIN Area: Trainer3,700 ㎡ ● TIAGoal: develop the core human Around 70% of engineers at Number of shops: 11 resource to support automotive TOYOTA Indonesia have been in 1 year ● TMMIN Capacity Leader of trainers: 5,300/year ● TLCindustry & Plantdevelopment trained overseas. (Local high school students ) Target: SMK students a. Die Making Operation start: May, 2012 Skill (60%) b. Maintenance c. Painting 28 d. Welding a. Initiative ● TMMIN Pension Leader ● TIA b. Discipline ● TMMIN Trainer ● Dormitory c. Endurance ● Plant d. Teamwork Body-Mindset (30%) e. Motivation f. Sense of Unity g. Sense of Belonging h. Loyalty B 2 CBC Activities
TOYOTA conducts CBC (Clean, Bright, Comfort) activities as a team for continuous improvement in plants.
Clean Activity Bright Activity Comfort Activity
Working on no stains in human, Installed dust collector to prevent Building comfortable working environment like installing machine and wall under the belief smoke in casting plant for better tools/machines to improve the efficiency, setting green that a change in mindset will working environment (bright garden inside a plant to have enjoyable fresh feeling at change the method, which leads environment) worksite. to continuous level up
29 B 2 Member’s Voice Activity
In the Member’s Voice Activity, the genba team members voluntarily propose kaizen idea to the department head, which improves motivation, task ownership, and team work.
Overview of Member’s Voice Activity Improvement Example
If a problem is found (quality, safety, productivity, operation cost, etc.) …
Usual Kaizen Activity Member’s Voice Activity
Department Head Department Head (DPH) (DPH)
Flow Instruct Genba of from DPH to Pulling out heavy items proposes by hand Improvement Genba to DPH Activities
Genba Team Genba Team Member Member
Capability Improvement of team member Role recognition of supervisor as the problem solver Developed a pulling-out Motivation improvement of team member (ownership improvement) device (by members) 30 TOYOTA Philosophy
TOYOTA upholds a philosophy of working together with local citizens and contributing to economic and social development in all of the countries in which we operate.
TOYOTA’s Basic Principle
Contribute to the Development and Welfare of the Country
“If you are not sure what to do, do what’s good for the local community.” - Masayuki Kato, former president of TOYOTA Motor Sales Co., Ltd.
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