Information system used in Toyota Motors

University Degree Business and Administrative studies

INFORMATION SYSTEMS USED IN TOYOTA MOTORS

Introduction

Toyota Motor Corporation is a multinational corporation headquartered in Japan, and the world's largest automaker. Toyota employs approximately 316,000 people worldwide.

In 1934, while still a department of Toyota Industries, it created its first product Type A engine and in 1936 its first passenger car the Toyota AA. The company was eventually founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create . Toyota also owns and operates Lexus and Scion brands and has a majority shareholding stake in and , and minority shareholdings in Fuji Heavy Industries, Isuzu Motors, and Yamaha Motors. The company includes 522 subsidiaries.

Toyota is headquartered in Toyota City and Nagoya (both in ), and in . In addition to manufacturing automobiles, Toyota provides financial services through its Toyota Financial Services and also builds robots. On May 8, 2009, Toyota reported a record annual net loss of US$4.4 billion, making it the latest automobile maker to be severely affected by the 2007-2009 financial crisis.

Toyota headquarters Japan

BEA Information System used in Toyota Worldwide

Toyota Australia is the Australian subsidiary of Toyota, one of the world's leading car manufacturers. The company realized that integrating the disparate systems throughout the value chain would allow them to achieve considerable process improvements and cost savings while improving customer satisfaction. Toyota Australia deployed BEA WebLogic Integration to underpin the e-Business Transformation Program

Importance of Vehicle Components

Toyota Japan is one of the world‘s leading automakers, offering a full range of models, from mini-vehicles to large trucks. Global sales of its Toyota and Lexus brands, combined with those of Daihatsu and Hino. Besides its own 12 plants and 11 manufacturing subsidiaries and affiliates in Japan, Toyota Japan has a massive group of suppliers, supplying Japan components for its domestic made vehicles. However 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.

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

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

Additionally, downstream entities comprises parts distribution centre in Sydney and Melbourne and a storage distribution complex situated at Woolooware.

Internal entities

Toyota builds two models - Camry and Avalon - in Australia. The fully integrated Altona manufacturing plant incorporates state-of-the-art weld, paint and assembly shops to produce cars that have been independently recognized as Australia's best quality locally built vehicles. 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

Upstream entities

At current, Toyota Australia has an extensive local supplier base from its 98 component suppliers and 300 general suppliers.

These companies were predominantly manufacturers of tires and rubber parts, glass, paint, batteries, electronic parts, bearings and brake systems. By contrast, suppliers which have remained members of a single association tended to be locally based single-establishment companies in mechanical engineering. Additionally, components such as bumper bars, door trims, fuel tanks and trim fabrication manufactured at their Port Melbourne plant are also considered part of the upstream entities as they are brought to Alton plant for assembly of the vehicles.

IT Solution for Toyota Australia’s overall supply chain operation

Toyota Australia’s parent’s company, Toyota Motor Corporation (TMC), is Japan’s largest vehicles manufacturer and one of the largest automotive companies in the world. As of December 2004, outside Japan, Toyota has a total of 51 overseas manufacturing companies in 26 countries / locations. Toyota markets cars worldwide through its overseas network consisting of more than 160 importers / distributors and numerous dealers. At current, to support their operation worldwide in terms of building tighter collaboration links among manufacturers of Toyota Group, OEMs manufacturers, suppliers, distributors ...

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IT Solution for Toyota Australia’s overall supply chain operation

With the current SAP automotive suit, outstanding strategic, operational, financial and marketing position gains have been achieved by Toyota that have embedded the lean philosophy, principle, practices, tools and methods of the Toyota Production System (TPS) into their integrated IT systems. Gains ranging from factors of three or more in sales per employee, profitability, free cash flow and a superior market position, among other performance indicators, have been acknowledged in Toyota with revenues from tens of millions to billions of dollars. This system hence acts as one of the main means of information flow between Toyota Australia and its counterparts worldwide.

At current, while Toyota Australia has the main SAP Automotive suit ERP system, this however could not allow them to be connected to their numerous partners in the value chain via an assortment of systems, including some proprietary technologies. Understanding that modern production methods, which depends on many independent suppliers, and just-in-time delivery requires them to manage an increasingly complex value chain, Toyota Australia commenced a major revamp of its operation, known as the ebusiness Transformation Program in 2004. This program, designed to integrate the systems and processes that connects Toyota Australia and its trading partners, with the goal of achieving real-time information access, enhanced tow-way visibility and improved performance through all of its processes and those of its partners. To drive out costs and enable a smooth transfer of data along the entire value chain within Australia, BEA Weblogic Integration 8.1 was selected due to BEA’s aggressive support for open standards. Another advantage of implementing BEA Weblogic Integration 8.1 was that it has the ability to implement existing business logic, such as that within the SAP automotive suit.

The current BEA software has the following function:

• 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

Downstream Sales Arrangements

Toyota Motor Corporation of Australia’s (TMCA) downstream sales arrangements, in particular the agreements in place with existing dealerships are done via strict selling arrangements. No customers, corporate or otherwise, can purchase a new car, or fleet of cars, directly from TMCA but must purchase from an authorized Toyota dealership; this purchasing arrangement is also the same for the sale of Toyota Genuine parts.

Another downstream procurement arrangement is the method by which unavailable stock can be obtained from other vendors. This is done via a method called ‘transfers’. For example, when a customer wishes to buy a fleet of cars and the required number of stock cannot be obtained in time by that dealership, they will check the amount of stock that other dealerships have of the required product and initiate a transfer of the amount of vehicles necessary to maintain the sale.

Internal arrangements can be made for Toyota customers to access disintermediary resources by allowing them to see where their requested product is located in the internal manufacturing process. Using a login and password assigned to them by dealership staff, they can access their confidential product information to see what country, and even the shipment details of the product being delivered.

Sales and Marketing Arrangements

Marketing arrangements such as paid agreements between the purchasing of advertising space on radio, television and other related media is also monitored via the customised BEA application. Orders for ongoing promotional material required for maintaining regular and ongoing flow of customers such as signs and massive advertising banners are tracked transparently via this application.

Sales and Marketing Functions on BEA Application

Financial Management Arrangements

Regular marketing instructions for showroom staff can be broadcasted via this same BEA system. This covers such information as the arrangement of showroom promotional material, changes to pricing structures that change with each promotion, as well as information about product recalls and what needs to be told to customers in the event of such unforseen circumstances.

Financial arrangements between customers and dealerships can also be monitored with BEA, such as ongoing repayment information that is unique to each client. Credit checking and other financial assessment tools are also available from this system. Customized payment options between clients with special needs such as corporations who purchase fleet vehicles can be modified to suit their needs.

BEA Application Financial management functions

To compliment the ongoing requirements of dealership sales staff, customers have access to summarized confidential information that is relevant to their purchase. Customers have access to a web front-end to the BEA’s data via an individual assigned login and password. These assigned customer details allows a mutual exchange of relevant information for customers for the duration of their purchase as well as extended web based information services for their duration of the ownership of their Toyota vehicle.

Basically, the objective of the Lean System, adopted by Toyota is to introduce a pull system with a short lead-time, comprising two main components. They are valued added and non-valued added time, where value added is run time on a machine and latter is the storage time, setup time, idle time, breakdown, inspection time etc. Thus, Australian companies is able to win by being more skilful, flexible in tapping the full creativity as they apply the rules of Lean to all the processes and system. On the beneficial side, IT companies, such as SAP and Oracle is able to present an opportunity to help in rectify this solution further. Moreover, to optimize supply, first establishment agreements with raw material suppliers have to be set. Software such as Vendor Managed Inventory or B2B connections will have in this process to minimize inventory and risk, taking in the consideration for continuous flow matching supply with real demand26.

Toyota Australia has been progressing its eBusiness. This is an effort to move the company’s main business processes into an extensible online environment. For instance, the Melbourne’s manufacturing plant have been using BEA WebLogic Workshop Technology to build Java and Web services-based applications, that will allow manufacturing partners (suppliers) to interoperate with Toyota’s. With the aid of the BEA technologies, Toyota’s system will allow information to flow smoothly between the integration of it operating system, increasing the functionality of the existing ones. One of the benefits, is the fleet management integration (the Toyota Vehicle Order Processing System) notifying for vehicle deliveries and a dealer interface that allow dealers to receive automatic updates from Toyota‘s SAP system regarding of vehicle production and delivery.

Advantages of BEA system implemented at Toyota

Basically, with the implementation system of BEA Weblogic and the SAP’s architecture, Toyota is able to shift the transition from a mass-production material-handling system to a lean system. This is more reliable in supplies purchased parts to continuous-flow cells, small-batch processing, and traditional assembly lines with the plant. The benefits of a lean material-handling system include28:

• Fewer material handlers

• Fewer equipment (forklift, heavy machines)

• Higher plant inventory turns

• Higher production output

• Less time spent by operators retrieving parts

• Less overtime

• Less expedited delivery costs.

• Less inventory

While the financial flow of the system will consist the methods of payments and other financial aspect between the suppliers or customers and Toyota, In this case, Toyota Australia has adopted CommSecure to acts as an intermediary in the direct debit process, in using of CommSecure method of handling personal and small business lease and loan payments. This move has motivated a desire to give customer to drive to the Toyota website to view informational and marketing messages, and cost savings. Moreover, the system handles the traditional form of direct debit, as well as flexible customer initiated. The data integrity is also transferred between two companies via a Secure Socket Layers (SSL) connection with 128-bit encryption. This is another channel of Toyota handles regular payments from her customers, reducing the number of late payment and is relatively affordable.

Another approach that Toyota Motor Sales has moved a milestone, when they started to be upgraded their Web portal with the assistance of Microsoft Consulting Services.

One of the highlights, it enables dealers to work more closely with other corporate subsidiaries such as Toyota Financial Services. For instant, when a customer wants to finance a vehicle, dealerships can submit a loan application based on already captured customer data through Dealer Daily to Toyota's financing system (which utilizes an Oracle database running on UNIX).

B2B e-Marketplaces where Toyota Australia participates

According to Toyota Australia’s report to the Productivity Commission Inquiry in 2002, Toyota participates with up to 98 key component suppliers and 300 general suppliers1.

The Business to Business (B2B) e-marketplace has emerged as a means of connecting buyers and suppliers. Suppliers are able to look for opportunities to grow their business and expand their customers’ base on a platform, which is able to provide the abilities to improve the purchasing processes and the supply demand. Basically, an B2B e-Marketplace is comprised of three main functions, as defined by Turban

• Matching buyers and sellers

• Facilitating the exchange of information goods, services and payments associated with market a transactions

• Providing an institutional infrastructure, such as legal and regulatory framework, that enables the efficient functioning of the markets

With the three main functions above, B2B e-Marketplaces operates similar to a physical markets, where it in included further an electronic transactions that fetch about a new distribution of goods and services.

Logistic & Shipping Arrangement

BEA system has been integrated with different applications to support the Logistic and Shipping operations. This is because, due to, Toyota Australia has suppliers scattered all over the nation, unlike in Japan. The suppliers are located within the radius of the city. In enhancing the existing system, Toyota Australia has decided to integrate the system with BEA software, which includes

• Electronic proof delivery

• Online accounts payable states for supplies

• Fleet management integration

• The Toyota Vehicle Order Processing System (TVOPS)

• Advance shipping notices for vehicle deliveries

• Vehicle inventory synchronization.

Backbone of IT Solutions

Australian Automotive Network eXchange (AANX)

The automotive industry is geared towards Just-in-time (JIT) manufacturing. JIT in short deals intimately with all areas of supply chain to reduce inefficiencies in transportation, processing, inventory and other business processes. In order to facilitate JIT, the automotive industry developed a fast and reliable communication network for all the key stakeholders involved, manufacturers, suppliers, importers and dealers, to share information. This industry driven initiative is called the Australian Automotive Network eXchange (AANX). The four major car manufacturers in Australia are involved in the project.

AANX provides IP based Extranets for the automotive industry in Australia. AANX Operates as a virtual point network (VPN), an internet-based infrastructure that allows users to send date to each other in a reliable and secure manner. It is a platform for conducting domestic and international business-to-business (B2B) e-commerce activities. The main components of the project consist of.

• 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.

Network Structure

AANX is a multi-provider, virtual private network where service providers compete for

customers and at the same time conform to standard service quality requirements such as

security. Every trading partners share a similar physical infrastructure of the AANX. Within

the framework, all electronic conversations traverse a secure and private connection

between two trading partners.

Toyota Australia has been working on its eBusiness Transformation Program. It will move

the company's main business processes into extensible online environments that links up

the company's A$10 billion value chain. The company has been using BEA WebLogic

Workshop technology to build Java and Web services-based applications that enables

manufacturing partner's system to interoperate with Toyota's. There are many projects

already online which provide functions such as the Toyota Vehicle Ordering Procurement

System, electronic proof of delivery, online accounts payable status for suppliers, fleet

management integration and automatic update systems that alert dealers about delivery

status and production information.

Using Web technology to Educate Suppilers

In North America, Toyota has an online website (www.toyotasupplier.com) that is dedicated to educating suppliers in that area. Potential suppliers can get information on the company’s purchasing policies, newsworthy articles, and bio information through the home page. The website also provides information on what products the company needs, purchasing principles and development efforts, supplier standard and how to become a Toyota supplier this in turn attracts potential suppliers to join with Toyota’s supply chain network.

Introduction of DSS (Decision Support System) in system

Toyota Australia focuses their market on medium and upper medium size cars. This may be a major disadvantage for the company if they endeavor to venture into more foreign markets1. To better understand the market demand, both domestic and foreign, they should introduce DSS (Decision Support System). A DSS is an interactive computer-based system or subsystem intended to help decision makers use communications technologies, data, documents, knowledge and/or models to identify and solve problems, complete decision process tasks, and make decisions

ICT (Information & Communication Technology) Infrastructure

Toyota Motor Europe (TME) has chosen Vuepoint to provide the knowledge infrastructure needed to reach their sales goal of 1.2 million cars by the year 2010. TME chose Vuepoint based on the company’s ability to provide a Learning Management System (LMS) that encompasses the flexibility, modularity and ease of use needed to handle the multiple requirements and challenges posed by an expansive, multilingual, multicultural marketplace. In contrast to more traditional, classroom-based training, the Vuepoint Learning System (VLS) will provide TME with

- Saving over 11 million Euros on training costs

- A more robust system able to accommodate 25 languages, 30+ countries, 50,000+ users

- More streamlined administration (automation)

- More targeted and efficient training (measurable knowledge levels)

- Ability to quickly produce, update and share content

Fujitsu Supporting Mainframe and SAP Applications

An outsourcing contract signed between Toyota Australia and Fujitsu in 1997 resulted in 77 Toyota IT staff transferring to Fujitsu as full-time employees. In late 1997, Fujitsu has managed Toyota's mainframe and midrange data centre services, including the operation of a Fujitsu M780/20 mainframe. Toyota moved its legacy applications to a SAP/3 ERP (Enterprise Resource Planning) platform some years ago, and Fujitsu has the service support contract for these SAP operations. Fujitsu manages Toyota's IBM AS/400 midrange machines, and it also supports the car manufacturer's PAMS (Parts Application Management System) application. Fujitsu is now working with Toyota as IT manager to improve not only IT services, but also to assist Toyota to use IT as the enabler to improve its many business services.

Information System Security

: Toyota motors has partnered with EMC for Data protection solutions for their IT support, below are the recovery solutions which are implemented by EMC at Toyota IT division.

Backup and Recovery Solutions

Avamar Data Store
Backup and Recovery for Oracle
Backup to Disk
Backup with Data Deduplication
Backup, Recovery, and Archive for Tivoli Storage Manager
Bare Metal Recovery
Continuous Data Protection
Data Protection for Microsoft SQL Server
Desktop, Laptop, and Windows Server Backup
Recovery Management
Remote Office Backup

Hardware Implemented

A majority constitutes of HP desktops and laptops. Also VPN or virtual private network has been implemented through the Cisco VPN access software and the RSA Securid token which change no every 1 minute for better security.

Also Oracle 10g has been implemented on the Unix Servers as Database Management Systems or the DBMS. For the automation or robots working in the manufacturing plant IBM mainframe AS400 are being implemented as shown below : -

IBM AS400 Mainframe Server

Conclusion

With the advent of the technology and the development of Information Technology, computer mediated processes have undoubtedly change the traditional supply chain management through the Toyota Australia to conduct their supply chain operations in the automotive industry. The analysis of the supply chain has improved drastically over the period of time, within the implementation of IT.

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