Japan Korea Trip Presentation Toyota Aaron Fyke Yuki

Japan / Korea Trip Presentation: Toyota Aaron Fyke Yuki Wada Gary Mi Grace Webber Tony Palumbo

Agenda • • Headline facts: Toyota Global auto industry trends Japanese auto industry history Toyota company background – Company history – Production history – Business segments • The Toyota Production System • Toyota’s strategy • Our questions for Toyota

Headline Facts: Toyota • Toyota has annual sales of $120 Billion • Produces ~5. 5 million vehicles per year • From 56 manufacturing plants across 6 continents • Employs ~200, 000 people • 3 rd largest automotive manufacturer

1998 Production Comparison Chart

Global auto industry trends • • Overcapacity Economic downturn Shifting consumer demands European trade barrier reductions

Company History • Established in 1937 out of Sakichi Toyoda’s weaving machine company • Launched first car (SA Model) in 1947 • “Toyota Production System” formed in 1950 based on Just-In-Time principle • First global expansion in 1959 at Brazil • In 1972, cumulative production >10 M units

Production History

Business segments • Automotive – Design, manufacture and sales of passenger cars, recreational vehicles, SUVs and related parts • Financial services – Provisions of loans to car buyers and car dealers • Others – Industrial vehicles (forklifts, etc. )

The Toyota Production System • Revolutionized manufacturing industry • At its core is “lean” – a relentless drive to improve efficiency and eliminate waste • Beginnings of TPS were born out of necessity due to lack of resources in post-war Japan.

Toyota Production System Key Main Concepts • SMED – Single Minute Exchange of Dies – Promoted flexibility of production runs • JIT – Just In Time manufacturing – Small batches which reduced inventory costs, tightened relationship with suppliers and improved quality control

Toyota Production System Key Main Concepts • “ 5 Whys” Quality – Asking “Why? ” 5 times to locate source of problems – Stopping the production line whenever there are quality problems to ensure they are not repeated • Low cost supplier – Long term supplier relationships

Toyota’s Strategy • Increase competitive strength through advanced technology – Environmental technology • fuel consumption, emission, recoverability – Hybrid vehicles and next generation fuel cells – Cost-reduction efforts • discontinuation, integration of older models – Increased emphasis on financial services and information communication system

Our questions for Toyota • Current competitive landscape – Local and global competition (Korea, Daimler-Chrysler, Ford, GM etc. ) • Future of automobiles – Development of fuel-cells, integration of Internet applications and other trends

Japanese auto industry history • From follower to leader • From domestic producer to exporter • Interventionist government