Sustainable Operations Management

- An Overview
17 th December, 2011

Shekar Viswanathan
Deputy Managing Director TOYOTA KIRLOSKAR PVT. LTD.

1.ToyotaGlobalVision
REWARDEDWITHASMILEbyexceedingyourexpectations

VisionaryManagement

Toyota in India: Toyota Kirloskar Motor [TKM]

3

2.ToyotaKirloskarMotor:Background
Toyota Kirloskar Motor (TKM) Outline 1. Incorporation : October 1997 2. Location 3. Employees 4. Capacity 6. Models : Bidadi - Bangalore : 6,200 : 210,000 Units/Year : Innova ,Corolla , Fortuner &

5. No of Dealers : 162 (As on Aug 2011)

Etios (Camry ,Prado , LC 200 & Prius as CBU

Mr. Nakagawa MD

4 Mr. V.Kirloskar VC

2.ToyotaKirloskarMotor:Background
Plant Facility : Press Shop Weld Shop Paint Shop

Assembly Shop

Quality Inspection

PES

2.ToyotaKirloskarMotor:Background
Toyota Kirloskar Motor : Product profile Product manufactured TKM Manufactured

Vehicles

QUALIS
[till 2006]

COROLLA

INNOVA

FORTUNER

ETIOS

LIVA

CBU Vehicles Product Imported & Marketed

CAMRY

PRADO

LAND CRUISER

PRIUS
6

3.BusinessChallengesSustainability
Increased number of multinationals entering India. Multi Location , Multi Products, Customer and sourcing bases spread across globe Dynamic Market with Global brands & cheaper imports give Indian Consumer multiple choices Continuously changing customer expectations Need for shorter Product Development Cycle, Cost Competitiveness Real Time Production Progress Tracking to Enhance Inventory Management Efficiency Ever increasing environmental issues like

Environment legislations Social challenges Global warming, Resource depletion etc..

7

Toyota Global Initiatives towards Sustainability

4.Toyota'sVisionofSustainableMobility
"Withoutfocusingonenvironmental,energyandsafety measurestherecanbenofutureformotorvehicles. KatsuakiWatanabe,
ViceChairman,ExPresident, ToyotaMotorCorporation Movingtowardsgreenertomorrow ToyotaPriusinIndia

ThirdGenerationPriuslaunchedinIndiainDec2010

With over 2.5 Million units sold Globally, Prius is the Worlds Largest Selling Hybrid9 vehicle

5. Sustainability Philosophy

6. Relations with Customers

7. Product Technologies

7. Product Technologies

7. Product Technologies

8. Recycling

15

9. ECO Driving
An e-learning program explains the key throttle control technique on starting and things to keep in mind while driving.

11.SustainableManufacturing
Five Year Environment Action Plan
Low carbon society Recycle based society Eliminate SOC Society in harmony nature

12. Toyotas Afforestation Activity for a Sustainable Society

13.SustainableManufacturingatTKM

20

14a.ManufacturingExcellence SAFETY
Safetyismanagementitself(Topdownapproach)

ZERO ACCIDENT

MACHINE SAFETY

HUMAN SAFETY

MANAGEMENT

Safetygateatallshopfloorentry points

SafetyAudittoconfirmequipment &processSafetymeasures

LevelupTMawarenessforSafety

TMStrainingforsafetymanagement

Safetyculturecampaigncompanywide (Stop,Look&Go)

21

14b. Manufacturing Excellence - Quality :

It should satisfy both intended & un-intended expectations of customer

MarketQuality
Product Quality DesignQuality ManufacturingQuality Service Quality

Designquality Products are designed to function and perform as per the customer needs.

Manufacturing quality To manufacture products consistently in accordance to the design quality.

JIDOKA

14 c.ManufacturingExcellence PRODUCTIVITY
CCR:CentralControlRoomforProductionControl

Dailyefficiencymanagement VehicleDeliveryleadtimecontrol OptimumResourceUtilizationbyHeijunka(ProductionLeveling)

CentralControl (Office)

WorkinprocessDisplayatCCR

ProductionStatusDisplayatCCR

ShopControl

Processcontrol[Andon]Displayatshop

TL/GL/MGRDailyMgmt.board

14d.ManufacturingExcellence COST
Costreductionthinkingway:
2 3

Majoractivities:
1.Dailydatagrasping&comparingagainststd. 2.Gapanalysis&wastagereductionthru kaizens. 3.Setnewstandardsthru followingTPStools.

WastagereductionKaizens:Ex.
1
a.Paintwastagereduction b.SteelyieldratioImprovement

PDCAthroughreview:
Periodiccosttraining

Shopcostmeeting
Fortnightlyreviewofcostwith TLs,GLs&Mgr. Abnormality&supportdiscussion

Plantcostmeeting
Monthlyreviewwithmanagement Coststatus/abnormalityupdates Receivedirections PeriodiccosttrainingtoTMforcost awarenessbuilding

14e.ManufacturingExcellence:HumanDevelopment
Monozukuri is Hitozukuri(HRDevelopment) DevelopToyota Person
Achieve Perfection

BasicSkillTraining
People make our automobile, nothing get started until we train and educate our
people Eiji Toyoda
25

14e.ManufacturingExcellence:HumanDevelopment

26

15.EnvironmentManagement Sustainability Policy

TKM Vision & Mission
VISION
BECOMETHEMOSTADMIREDANDRESPECTED COMPANYININDIABYFOLLOWINGTHETOYOTA

Mission Cycleof Nature

Monozukuri inharmonywith Environment

WAY

Cycleof Industry
Serviceofsocial development

CREATEANECOFRIENDLYCOMPANYINHARMONY WITHNATUREANDSOCIETY

Approach
ECOKAIZEN ECOSHOWCASE

Livetogetherin harmonywithnature forever

ECOMIND
27

15.TKM EnvironmentManagementSystem
Steps
TMAP Guidelines for Five yr Action Plan TKM Five Year Action Plan Yearly Environment Action Plan Environment Management Program
FY 2009 FY 2013
Electricity Consumption- Production

Management review (Quarterly)

3. DEPARTMENT YEARLY ACTION PLAN

ELECTRICITY
550.0 500.0 450.0 400.0 464 443 472 468 464 463 462 452 457 439 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0 Apr08
Elec-P Tar

Water Consumption - FY 2008

WATER
6.00 5.11 5.02 5.00 4.32 4.30 5.14 5.30 4.00 3.00

2. TKM FIVE YEAR ACTION PLAN

4.55 4.49 4.36 4.33 4.26 4.24

4. ENVIRONMENT MANAGEMENT PROGRAM

Kwh/Veh

m3/veh

2.00

1.00

May08

Jun08

Jul08

Aug08 Sep08

Oct08

Nov08

Dec08

Jan09

Feb09

Mar09

FY 07

Apr08 May08 Jun08

Jul08 Aug08 Sep08 Oct08 Nov08 Dec08 Jan09 Feb09 Mar09

1. TMAP EM FIVE YEAR GUIDELINE

2. TKM YEARLY ACTION PLAN

Elec-P Act

Cum Target

Cum Act

LPG Consumption - FY 2007

LPG
30 28 26 24 22 20 18 16 14 12 10 Apr08

60
26.84 27.45 26.23 27.16 26.39 27.15

VOC
49.83 45 46.7

VOC Emission - FY 2007

Kgs/Veh

TOP Management on Genchi to Observe Kaizens

45.21 40 44.96 44.81 44.19 44.72 30 20 10 FY 06
May08 Jun08 Jul08 Aug08 Sep08 Oct08 Nov08 Dec08 Jan09 Feb09 Mar09

26.77 26.77 26.79 27.12

50

45

April

May

June

July

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Haz waste Generation - FY 2008

14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 FY 06 Apr May Jun Jul Aug Sep Oct Month Tar Nov Dec Month Act Jan Feb Cum Tar Mar Cum Act 9.10 9.16 6.20 8.30 8.30 9.37 8.30 8.30 9.59 7.33

Non-Hazardous waste Generation - FY 2007

HAZARDOUS WASTE
Kg s/Veh

NON HAZ WASTE

20.00

18.74

16.00

15.4

14.83

14.83

8.30 9.64

12.00

13.46

13.86

13.70 12.85 12.11

8.00

4.00
se pt em be r oc to be r no ve m be r de ce m be r ja nu ar y fe br ua ry au gu st m ar ch 06 m ay ju ne F Y ap ril ju ly

5.

Review of Environment Activities by Management

28

16.EcoMindActivities
Objective:
To Contribute towards Sustainable Society through building ECO-CONCIOUS MIND among TOYOTA MEMBERS Concept 1. TRAINING OF TEAM MEMBERS
ECO CITIZENS

1b. Training Plan

1c. Trg Method 1

Training to Team Members

Drive Contribution to Company & Society Perform Kaizen

Self Reliance

Jiritsuka Level Post Promotion Training

Role Change

OJT at Workplace

Job Specific Training

New TM

Induction Training

Learn

1.Trg at Class 2.Trg at Shop 29 3.Trg using DOJO

Awareness

16.EcoMindActivities
Environment Month Celebration
Purpose: Creation of Eco Citizens by development. of Eco Mind among TMs & Family Method: Adopting One Special Theme each year on Key Env. issues

Activities Taken Up
M Competitions to build awareness amily Member Involvement through various competition chool Children & community awareness program. CO CSR - Clean & Green Village Campaign
Exhibition of Eco-friendly Tech.

International Env. commemorative Days

World Environment Day: 5th June Ozone Layer Protection Day: 16th Sept Climate Action Day:23rd Oct World Water Day:22nd March
Appreciation to TMs Family Members Paintings by TMs Children

Awareness promotion

Competition for TMs

17.SustainableManufacturing
ECO KAIZEN ACTIVITIES

31

17 a.Sustainable Manufacturing VOC Management

Energy Management
a. Electricity Consumption
7 0 1
800

b. LPG Consumption
6 0 1

6 0 0

5 9 3

32

700 600 K W H /V E H 500 400 300 200 100 0

35
5 0 8

30

36

40

30 25 Kg/VEH 20 15 10 5 0

29

FY 06

FY 07

FY 08

FY 09

FY 10

FY 06

FY 07

FY 08

FY 09

FY 10

c. Water Consumption
6

5.0

5.5

Major Initiatives Taken

4.9 3.9

Results
23% Redn 12% Redn 10% Redn NA 32

4.5

1. VFD Installation at Significant areas Paint shop 2. Standard Switch ON/OFF of compressor & lights 3. Oven run time optimization

M3/V EH

3 2 1 0

FY 06

FY 07

FY 08

FY 09

FY 10

4. Continuous Training to TM

22

17a.SustainableManufacturing
VOC Emission Reduction
VOC Reduction Toyota Affiliates
100 80

Approach ONE DROP SAVING

VOCinsupportiveactivities (washing/flushing)
41

83

75

72

70

67

gm\m2

62

60

60 40 20 0

55

53

No.1among ToyotaAffiliates

VOCinoverspray VOCsprayed onthebody

TM M IN

TM T( S)

TS AM

TA SA

TM P

AS SB

VOC Reduction Kaizens

Spray & Overspray Kaizens Washing & Flushing Kaizens

MultifeedBell&DistanceRednKaizen

TM T( G

TK M

KZ

TD B

ReductionofThinner Washing&Flushing

17b.SustainableManufacturing
Steel Yield Improvement Activity
Yield Ratio (%) Toyota Affiliates
74.0 71.0 68.0 65.0 62.0 59.0 56.0 53.0 50.0 TASA TSAM TMMIN TMT TKM

AThreeTierActivity

No. 1

GlobalLeaderinYieldRatio
71.00

No.1among ToyotaAffiliates
62.11 59.62

66.00

NonAuto PartsSupplier

54.82

SteelSupplier TKMInhouse

Inhouse Reduce & Reuse

Outhouse Reduce, Reuse, Recycle

ElectricalComponents

Reduce

Reuse

Reduce

Reuse

Recycle

18.TheEcoFactoryConcept
InnovativeTechnologies
PARTS & COMPONE

EcoFactory
PRODUCTS
Paint Shop: Zero VOC Emission Utilities: Treated Water
BY PRODUCTS

Air Pollution CO2, SOX, NOX Odour

Press Shop: Energy efficient SERVO PRESS Advanced technology for higher energy savings

Energy from Utilities

Weld Shop: Energy Efficient Global Body Line Flexibility without additional equipment or energy requirements
Press Shop Welding Shop

Paint Shop: Water Noise based paint-Zero solvent usage Lesser Solvent means WWTP Lesser VOC Emissions
Assembly Shop

Pollution

1. Air & Odour Regenerative Thermal Oxidizers Recycling Technology Emissions We Recycle upto 40% of [RTO] eliminate all VOCs in Reduce
Exhausts

SustainablePlantActivities
LOW INPUT
Greenery Development: Afforestation Activity Our Aim: 5 lakh trees in 5 years

Paint Shop

Soil/Land Pollution Water Pollution

2. Wastewater water 3. Solid & Hazardous Impact to Create Waste 4. Noise Pollution

ECO FACTORY

Highly Optimised MANUFACTURING PROCESS

Maximum OUTPUT
Eco-mind promotion: Eco zone Showcasing best environment sustainability practices Eco-mind promotion: Eco Training center Best environment practices education centre 35

Clean Energy: Wind mills Harnessing Clean energy Reducing our CO2 footprint

Eco-mind promotion: Renewable Energy Theme park Showcasing best energy practices

35

19.SupplyChainoutline
4
Information Technology (Reduce Info Lead Time) Sales Info

Parts Supply Info

Supplier

Manufacturing Manufacturing 1 Excellence (Flexibility) Dealer

Customer

3
Develop Partners (Improve Supply Chain)

Safety & Environment (For Better Future)

> Built in flexibility > Information lead time reduction > Suppliers as partners > Safety & environment focus

36

19a.VendorDevelopment
Suppliersaspartners
DevelopsupplierstoimplementToyotaproductionsystemattheir facilities.
Oneyear trainingtoSuppliermembers@TKMtospreadToyotaculture.
Development strategy

Learn

Practice
Kaizen

Drive
Develop own co.& other suppliers

- Regular Training on TPS Basics, S/W Training , PIF PAB, Kanban, etc,... - Class Room Training on Safety, Quality, Productivity & Cost

-I/H Genchi activity - Jishuken participation

- Hom e com pany & Regional supplier Developm ent

19a.SustainableLogistics

38

19a.SustainableLogistics
INHOUSELOGISTICSIMPROVEMENTS
100% Returnable packing Material
BEFOREKAIZEN AFTERKAIZEN
UseofDisposablePacking UseofReturnablePacking

CO2 Reduction Kaizens

Use of Battery Operated Forklift Zero CO2

Increase in the Cycle Time by 12

Use of Battery Operated Tow Motor

39

19a.SustainableSupplier
ECO SHOWCASE ACTIVITIES

40

19a.SustainableBusiness
OnsiteSupplierPark
Purpose: 1.Improvethequalityandefficiencyofpartsourcing. 2.BringsuppliersclosetoTKM,thusreducinglogisticscosts 3.ReducePackingmaterials&LogisticsCO2 emission

OnsitesupplierswithinTKMpremises

OyakudollyforJustInTimesupplyofparts
41

19b.SustainableDealer
ECO SHOWCASE ACTIVITIES

42

20.EcoShowcase
Eco-CSR Theme: Clean & Green Villages (CSR)
Background: To effectively utilize TKMs non-production days Purpose: Spread TKMs ECO SPIRIT among Local Community Participants : 1850 members Places : 8 villages around TKM

AwarenessDrive

CleanupDrive

SayNOtoPlasticsCampaign

PlantationDrive

Eco-CSR Theme: Voluntary Eco-CSR Activities by Team Members

Purpose: Spread TKMs ECO SPIRIT among Local Community Participants : 1400 members

Env.AwarenessCampaign

Dustbininstallation

WasteMgmt.Awarenessdrive

Cleanupdrive
43

20.EcoShowcase

Aim : To promote Environment awareness & to light billion lives Activity: A 24 hour Live environment awareness campaign

Greenathon Light a billion lives program

2009 : Over Rs. 24 Mil. raised And 67 villages (4,000 households) lit up. 2010 : Over Rs. 39 Mil raised and 156 villages (10,000 households) lit up.

2011 : Over Rs. 145 Mil raised and 580 villages (40,000 households) lit up
Other Events : Clean the Yamuna drive Eco-Marathon 24 hour marathon Telecast for Eco promotion :

Further Details on : Website www.green.ndtv.com

44

45

TKM Afforestation AfforestationObjective

Factorywhich, Canoperatewithoutcausingload onnature, SparkstheECOMINDamongTM's&Family, Canbeadmiredbylocalcommunity

46

Prof. Dr.Akira Miyawaki

Dr.AkiraMiyawaki
Emeritus Professor, Yokohama National University Director, Japanese Center for International Studies in Ecology

Awards 2006 BluePlanetPrize

MiyawakiMethod

Thinkingway Torestore&reconstructforests basedontheconceptof PotentialNaturalVegetation Implementedinmorethan1,500sites

47

Approach&Implementationof AfforestationatTKM

Pleasewatchthemovie.

48

Afforestation Status & Future Action

Afforestation - Growth Rate CO2 Benefit
Ton CO2 absorbed/ 125,650 Trees

987 887 686

1000 900 800 700 600 500 400 300 200 100 0 2009 2010 2011 2012

384 284 100

2013

2014

21st June2009

21st Nov2011

Afforestation Status
Afforestation Status
21st June2009 21st Nov2011

We do not inherit the earth from our ancestors, we borrow it from our children

Thank You
51