Topic Outline

Introducing Toyota Australia

&
Her Supply Chain Management
By Cong Xue

History of Toyota Australia

Toyota Motor Corporation Australia (TMCA) is a
subsidiary of Toyota Motor Corporation (TMC).
Toyota Australias origins go back to 1958.
The commercial vehicle business became
Thesis Toyota in 1971
In 1988, Toyotas local operations were unified to
form Toyota Motor Corporation Australia
Toyota Australia currently build two modelsthe
Camry and Avalon series.

Toyota Australia Current Business

Toyota Australia is the second largest vehicle
manufacturer in Australia.
Toyota Australia has exported over 60,000 cars
to over 20 different commercial locations
worldwide in 2003.
Toyota is a people oriented organization that
sees the development of its staff as a foundation
stone for future business prosperity.
Toyota has long been recognized as one of the
most efficient manufacturers in the world

Business Context
The business context of Toyota Australia is actually link to
the operating environment that consists of a number of
factors.

The global industry operating environment;

Automotive investment trends;
Policy environment;
International market access;
Australian industry operating environment; and
Government policy environment.

Toyota Australias supply network

The basic of Toyota Australias supply
network:
Supplier Association
Effect of knowledge sharing network on
supply chain coordination
Upstream and downstream entities

Suppliers Association
The key to Toyotas success would appear
to be their highly effective supplier
integration process that over the past 50
years has enabled the excellence of their
internal hoshin kanri strategic
management, cross functional process
based management and Toyota
Production System to be shared directly
with their direct suppliers.

Effect of knowledge sharing network

The effects of knowledge sharing network

on the coordination of supply chain and
product customization forms the basis of
Toyota Production System (TPS).
The aim is to have members identify
themselves as part of an interdependent
economic network.

The Upstream problems

After a series of research, few critical
factors were identified:
Bundled outsourcing
Logistic challenge
Import of vehicle components

Bundled Outsourcing
One of the important characteristics of Toyota Japan
suppliers system in terms of the inter-firm tasking
portioning is that the outsourcing ratio is high not only in
manufacturing but also in product development.
There is a difference in terms assembly process and the
level of hierarchy in supplier.
Without bundled Outsourcing, it has first changed the
internal process of the supply chain and most
importantly, the number of first tier suppliers decreases
and many of the suppliers ascended to the higher tiers
and the hierarchy of the parts markers.

Logistic Challenge
One advantage of localization is closer
relationships facilitate collaborative
problem solving.
Longer supply lines required faster order
processing, and this was done
electronically.
Essentially, electronic kanban cards were
identical in function to the physical kanban
cards used by Toyota in Japan.

Import of Vehicle Components

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

Internal entities
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

Topic Outline

Toyotas Australia
&
Her Current IT Setup
By Simon Chew

Topic Outline

IT Solution for
Toyota Motor Corporation
(TMC)

IT Solution for TMC

Enterprise Resource Planning System
(ERP)
E-Marketplace
TradeMatrix system

IT Solution for TMC

Enterprise Resource Planning

System (ERP)

Enterprise Resource Planning System

Why ERP?

Enterprise Resource Planning System

One of the largest automotive companies

in the world
Total of 51 overseas manufacturing
companies in 26 countries / locations
Overseas network consisting of more
than 160 importers / distributors and
numerous dealers.

Enterprise Resource Planning System

SAP Automotive ERP Suit

Main means of information flow between
Toyota and its counterparts worldwide.
Tighter collaboration links
With SAP, gain:

Outstanding strategic,
Operational,
Financial,
Marketing positions

IT Solution for TMC

E-Marketplace

TMC E-Marketplace
iStarXchange
Initiative with i2 Technologies Inc.
Allow subscripted members able to view a single
catalogue to:

view information on parts

checking the prices and availability
conduct transaction online
forecasting supply and demand
delivery cycle

Improved forecasting
Enhancing the planning
Enhance deployment and replenishment of the inventory

IT Solution for TMC

TradeMatrix system

TradeMatrix system
Initiative with i2 Technologies Inc
Automates with equipment manufacturer
and suppliers in terms of :
sites inventory management
warehousing
Logistic and shipping

Topic Outline

IT Solution for
Toyota Motor Corporation
Australia
(TMCA)

IT Solution for TMCA

Main SAP Automotive suit ERP system
BEA Web-logic Integration 8.1 (Integrated
within the SAP automotive suit)
Electronic Kanban-Card System
Participant of iStarXchange
Major Player in Australian Automotive
Network eXchange (AANX)

IT Solution for TMCA

Main SAP Automotive Suit ERP

System

Main SAP Automotive Suit (ERP)

Main means of information flow between
Toyota Australia and its counterparts
worldwide.
Tighter collaboration links between TMCA
and TMC
Logistic and shipping
Overall Value Chain

IT Solution for TMCA

BEA Web-logic Integration 8.1

BEA Web-logic Integration 8.1

Integrated within the SAP automotive suit
Main IT Backbone of TMCA
Based on Open Standard
Allow connection to their numerous
partners in the value chain via an
assortment of systems in Australia
Integrate the systems and processes that
connects Toyota Australia and its trading
partners

BEA Web-logic Integration 8.1

Functions:
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

BEA Web-logic Integration 8.1

Customised BEA
Application

BEA Web-logic Integration 8.1

Financial management functions

IT Solution for TMCA

SAP vs BEA

SAP vs BEA

IT Solution for TMCA

Electronic Kanban-Card
System

Electronic Kanban-Card System

Identical in function to the physical
kanban cards used by Toyota in Japan
4 main purpose:
Sole means of requesting new parts
Send for every order shipment
Send to a specific supplier plant
Establishing the mix and volume criteria for
assessing if an order was correct

Electronic Kanban-Card System

Kanban= Card (Japanese)

Electronic Kanban-Card System

PARTS
SUPPLIER

TOYOTA
(TMCA)
Material Requirements Forcast

Planning

ANSI X12 830

Planning

Orders
Forecasts

Kanbans
Delivery Docket

Despatching

Kanban
Sorting

Goods
Kanbans
Delivery Docket

Receiving

Accounts

Remittance Advice

Accounts

Receivable

EDIFACT REMADV

Payable

EFT

EFT

BANKING
SYSTEM

Production
Line

IT Solution for TMCA

Participant of iStarXchange

Participant of iStarXchange
Main e-marketplace between TMCA and its counterparts
worldwide
Allow subscripted members able to view a single
catalogue to:

view information on parts

checking the prices and availability
conduct transaction online
forecasting supply and demand
delivery cycle

Improved forecasting outside Australia

Enhancing the planning outside Australia
Enhance deployment and replenishment of the inventory

IT Solution for TMCA

Australian Automotive Network

eXchange (AANX)

Australian Automotive Network eXchange

Four major car manufacturers in Australia

are involved
Numerous service providers and non-key
suppliers
Provides IP based Extranets for the
automotive industry in Australia
Operates as a virtual point network (VPN)
Allows users to send date to each other in
a reliable and secure manner

Australian Automotive Network eXchange

Main components:
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

Australian Automotive Network eXchange

Benefits includes:
Pervasive supply chain communications
Rapid application deployment across the
supply chain
Lower cost of EDI
Faster Business Cycles
Simpler integration into trading partners' and
customers' online e-business systems and
strategies

Australian Automotive Network eXchange

AANX Framework

IT Solution for TMCA

Problem Statement

IT Solution for TMCA

Weaknesses
Lack of alternatives in the domestic supplier
base and risk of currency exposure
Problems arising in linear supply chain
Over-reliance on forecast planning for
production
Lack of Vertical industrial relations environment

IT Solution for TMCA

Lack of alternatives in the domestic

supplier base and risk of currency
exposure

IT Solution for TMCA

Lack of alternatives in the domestic supplier
base and risk of currency exposure
TMCAs supplier agreements have to be obtained with
the approval of the TMC
Import costs and extended time taken for components to
arrive in Australia hinder TMCAs JIT system.
Currency exposure will cause too great a financial risk
for TMCA
Components also take longer to arrive the plant
Affect on the overall production costs and time taken to
produce a locally produced Toyota cars

IT Solution for TMCA

Problems arising in linear

supply chain

IT Solution for TMCA

Problems arising in
linear supply chain
Dispersed geographical location of the TMCA
supply chain infrastructure
Cannot currently communicate and interact with
other members further downstream
No collaborate in spite of TMCAs involvement
with the AANX network
Escalate problems with ongoing redundant
supplier delivery expenses

IT Solution for TMCA

Over-reliance on forecast planning for

production

IT Solution for TMCA

Over-reliance on forecast
planning for production
PARTS
SUPPLIER

TOYOTA
(TMCA)
Material Requirements Forcast

Planning

ANSI X12 830

Orders

Planning

Forecasts

Kanbans
Delivery Docket

Kanban
Sorting

Production
Line

Despatching

Goods
Kanbans
Delivery Docket

Receiving

Accounts

Remittance Advice

Accounts

Receivable

EDIFACT REMADV

Payable

EFT

EFT

BANKING
SYSTEM

IT Solution for TMCA

Lack of Vertical industrial relations

environment

IT Solution for TMCA

Lack of Vertical industrial
relations environment
Currently industrial relationships with automotive
manufacturers in terms of sharing suppliers
Current AANX network relying on the freight company to
do all the logistics planning
Automotive shipments require specialised vehicle
transport ships

IT Solution for TMCA

Business Goals

IT Solution for TMCA

Business Goals
1. Provide a comprehensive domestic
supplier base
2. Provide initiatives for a non-linear, hubbased supply chain system
3. Provide real-time updates on demand
and supply allocation
4. Vertical industry logistics collaboration

IT Solution for TMCA

Solutions Overview

IT Solution for TMCA

Goal 1: Provide a comprehensive domestic supplier base
Solution: Implementation of a supplier website
Goal 2: Provide initiatives for a non-linear, hub-based supply chain system
Solution: An agent-based e-marketplace initiative.
Goal 3: Provide real-time updates on demand and supply allocation
Solution: Real-time tracking function module incorporated into the current
electronic BEA system

Goal 4: Vertical industry logistics collaboration

Solution: An intelligent logistic coordinating agent in the form of a
collaborative e-logistics hub.

Solution 1
Solution 1
Implementation of a supplier website
By Joseph Baez

Solution Description
Goal 1 Provide a Comprehensive Domestic
Supplier Base
SOLUTION: Implementation of a supplier web site
U.S. version of Toyota supplier web site
Toyota Supplier.com
www.toyotasupplier.com

Supplier Website

Supplier Website
TMCA focused on core competencies in
high-end design
engineering and
system integration
Toyota Australia needs highly focused
core competency oriented suppliers.
Small and diverse companies though have the ability to display such
potential to add
Innovation
Flexibility and
Strength to TMCAs supply base.

Supplier Website
TMCA first has to open its doors to the
domestic market suppliers
Invest in their new concept of supply base
Target: 100% domestic suppliers

Supplier-centric web site

Provide
opportunities
to expand TMCA
supplier network.

Supplier Website

Figure 6.

Access Flow From Toyota

Australia Suppliers web site

Supplier Website
Reasoning behind Goal 1 The Business Needs

Many of TMCAs car components have to be imported due to the lack of

domestic suppliers
Application of the right part at the right place at the right time concept or JIT to
lack the optimal efficiency throughout the TMCA supply chain.

The implementation of a comprehensive domestic supplier base is

essential.

Provision of collaborative web site linking current TMCA online presence

which provides similar functions to the Toyota suppliers web site currently
in use in North America
Allowing TMCA to have comprehensive overview of their current suppliers.
Also reducing the red-tape involved to be part of the TMCA supply chain; and
most importantly
Provides TMCA with a channel to disseminate important supplier related
information to its upstream entities.

Supplier Website

Web site functions

Potential suppliers will be able to acquire information on the requirements of
becoming part of TMCAs supplier network
Potential suppliers need only to download/complete an online form
to join the network
Information such as
Suppliers guide
Community activities; and
Any core information about TMCAs current suppliers network can be obtained from the
website.

Connection links provided to domestic e-Marketplace

Registered e-Marketplace members:
Able to enjoy the privileges on what the e-Marketplace is offering

To be discussed in Solution 2

New opportunities for potential suppliers as well as existing suppliers

who possess the capabilities to improve TMCAs
overall supply chain process using this proposed
collaborative web site.

Solution 2

An agent-based e-marketplace initiative

Solution Description
Goal 2 Provide initiatives for a non-linear,
hub-based supply chain system
SOLUTION: Agent-Oriented Domestic eMarketplace

Agent Oriented Domestic Marketplace

Figure 7: Logical concept of the

Domestic e-Marketplace

Agent Oriented Domestic Marketplace

General Overview
Proposed e-Marketplace functions
Will be able to support a broader base of services given
further growth in e-Market infrastructure
Baseline interaction and directory services
Specialty market services, such as:
Dynamic trading;
Cooperative supply chain integration
and management
Enables and facilitates the relationship between
business participants
Suppliers and service providers; and
Supporting systems

Agent Oriented Domestic Marketplace

Proposed e-Marketplace functions (contd.)
Many-to-many relationships supported between TMCA
and these business partners.
Enables both TMCA and suppliers to leverage
economies of scale in their trading relationships
Allows access to a more liquid marketplace
Further allows the use of dynamic pricing models
e.g. Auctions (one of the services provided in
the proposed e-marketplace)
Improve the economic efficiency of the market
where uncertainty about prices and demands are
common.

Agent Oriented Domestic Marketplace

Integration with existing systems

e-Marketplace architecture accommodates and supports
interfaces to the existing business models of the participant
entities through cooperative supply-chain integration and
management
To provide smooth and effective integration at the business
level
There is a need for well-accepted interoperability standards,
which must be meshed for supply chain integration to meet
business demands.
e-Marketplace corresponds with the supply chain with
flexibility and agility in responding to customer demand shifts
without conflicts in resource utilization.

Agent Oriented Domestic Marketplace

Integration with existing systems (contd.)
Fundamental objective improve coordination within
and between various participant business entities in the
supply-chain
The increased coordination can lead to:
Reduction in lead times and costs
Alignment of interdependent
decision-making processes
Improvement in the overall performance of each
participant in the chain as well as the supply chain
itself.

Agent Oriented Domestic Marketplace

Integration with existing systems (contd.)

Figure 8: Logical concept of system Integration.

Agent Oriented Domestic Marketplace

Agent-Oriented e-Marketplace
Handles complex and non-deterministic interactions
usually involved in e-Marketplace
E.g. Auctions and ad-hoc service integrations
Components of proposed e-Market system for TMCA will
be able to change its configuration to participate in
different, often simultaneous roles in e-Marketplaces.
Completes tasks that would be manually impossible.
e-Marketplace agents play several roles
Will be able to coordinate, cooperatively or
competitively, with the other agents, including HR

Agent Oriented Domestic Marketplace

Figure 9: The architecture of the e-Auction within the proposed e-Marketplace

Agent Oriented Domestic Marketplace

Agents for the proposed e-Marketplace:
User interface agents
support and collaborate with users in the same work environment to
achieve the users goals

Business-specific service agents

Specialists that provide a collection of business-services available in
the e-Marketplace
Performing the functionality of a business service is typically the
cooperative integration of several agents including:
business-specific service agents; and
market service agents
Acts as a representative in the e-Marketplace for some functionality
that is based on legacy applications or libraries, such as a product
catalogue web site

Agent Oriented Domestic Marketplace

Agents for the proposed e-Marketplace (contd.)

Market service agents:

Specialises in providing a collection of functions for generic
e-Businesses in e-Marketplace environments in which a single entity
(usually an agent) can perform its tasks in the e-Marketplace.
Market services (value-added and core services) are horizontal,
i.e., services that are used in several business domains by several business
entities.

Integration service agents

Also provide a collection of integration functions for a cooperative distributed
system in which a single entity (agent, component, object, etc.)
can perform its tasks.
Used by several distributed entities. E.g. a brokering agent provides a
capability-based integration service in the e-Marketplace.
Another type of integration agent provides view-integration,
which is a service to merge and map the description of business-objects
(e.g., source schemas) in the e-Marketplace supported by the business
ontology into an integrated view or schema

Agent Oriented Domestic Marketplace

Reasoning behind Goal 2 The Business Needs
The acquisition process of parts, materials and supplies from
TMCAs 100+ suppliers can be slow, expensive and ineffective

A milk run system could be possible within these

groups of suppliers.
No coordination among suppliers have been established
Currently a missed opportunity

Current electronic Kanban (card) system is the only existing mechanism for
ordering supplies between TMCA and its suppliers;

A linear supply chain is not able to efficiently support the JIT productions as
significant collaboration among entities within the supply chain.

For these reasons an agent-based e-marketplace initiative

will be suitable
TMCA will be able to eliminate its existing linear supply chain system to permit
supplier collaboration and integration.

Topic Outline

Solution 3
Real Time Inventory Tracking Module
By Nurhazman Abdul Aziz

Solution 3 :
Real Time Inventory Tracking Module
Why did introduce this module?
GOAL 3: Provide real-time updates on
demand and supply allocation
Solution: Real-time tracking function module
incorporated into the current electronic BEA
system

General Overview
A complete modular solution,
reduce the bullwhip effect which causes
shifts in orders up and down the supply
chain,
eliminating any stockpiling cause by the
current forecast method of determining the
quantity of components needed for the
productions.

General Overview
to provide process visibility across the
value chain, giving suppliers greater
control over the process and
ensure synchronization of information with
all partners regardless of size or
geographic location.

Graphical Overview

The Real Time Inventory Tracking Module

To be incorporated into the BEA system,

which comprises of 4 agents
Forecast Agent
Inventory Agent
Order Agent
Multi - Tier Visibility Agent

Details of the Desired Agents to be work as

Forecast Agent
enables suppliers to rapidly align demand and supply in the mid-to-longterm planning horizon,
allowing customers and their partners to arrive at a consensus forecast or
plan.
provides alerts and notifications of demand supply mismatches and
can support a single-phase or two-phase commit planning process.
Inventory Agent
enables suppliers to align demand and supply by providing visibility to
inventory status levels at multiple internal and external locations, as well as
in-transit positions, enabling optimal levels of inventory.
allows partners to exchange key inventory-related information, such as
demand-pull requests and target inventory levels
can be used to track supplier compliance to contract obligations such as
min/max inventory levels.
exception alerts can be configured to flag any inventory-level violations.

Details of the Desired Agents to be work as

Order Agent
enables suppliers to manage and track the entire purchase order lifecycle
through TMCAs supply process.
Suppliers can manage and track, in real-time, the complete end-to-end
process for discrete, replenishment, demand pull and/or blanket purchase
orders from order creation through shipment, receipt, invoicing and
payment.
Multi-Tier Visibility Module
allows TMCA to extend their demand/supply planning, order management
and inventory management workflows beyond their first-tier partners to
provide visibility to the processes executed between tier two, three and four
partners.
allows to monitor demand/supply disconnects and exceptions throughout
the extended supply chain,
providing tools to help identify the impact of problems identified multiple tiers
away.

A Suitable Scenario

The interest of this system is focused on a complete solution to provide a

real-time updates on the demand and supply allocation.

one of the distributors of TMCA has just received an order of purchase of a

locally made Toyota Camry.

logs the order into the current BEA system, the information will immediately
be sent Toyota Vehicle Order Processing System (TVOPS).

the real-time inventory module will acquire the new order information and be
analysed.

sent to the respective suppliers to be updated onto their own system.

With such message flow, suppliers can get their supply ready for the next
delivery to meet the JIT production in the shortest possible time needed.

Topic Outline
Solution 4
An agent-based transport and
logistics coordination system

Solution 4
An agent-based transport and logistics coordination system
Why did introduce this module?
Goal 4: Vertical industry logistics collaboration
Solution: An intelligent logistic coordinating agent in the form of a
collaborative e-logistics hub.

General Overview
An agent-based transport and logistics coordination
system (collaborative e-market), are designed to
accomplish transport and logistic coordination tasks
among different automotive manufacturers in Australia.
Consist of 4 generic roles agents in supply chain:
Distribution Hub Agent
Logistics Coordinator Agent,
Manufacturer Agent
Transporter Agent.

Framework for agent based supply chain coordination

The Distribution Centers of individual

automotive manufacturers will send their
distribution requirement (DRP) to a
Logistics Coordinator who will transform
the DRP into transport and manufacturing
requirements.
These requirements will be broadcast to
the available transporters and
manufacturers plants so that they could
work on their bids.
After the bids are received, the logistics
coordinator will work on a global optimized
solution before committing the distribution
centers.

Logistic Optimisation within Australia

How does the logistics optimisation works within Australia:

Based on ordered demand established, the Distribution Hub Agent

calculates the distribution requirements.

pass the DRP to the Logistics Coordinator Agent by pre-defined data

interface. logistics coordinator splits the requirement into manufacturing
and transportation requirements.

Logistics Coordinator Agent divides the distribution requirements based on

a historical knowledge base.

In this database, the records show for a product, how long it will take for
the Manufacturing Plants to produce a specific quantity, and how long it
will take for the Transporters to deliver as shown in Table next

Logistic Optimisation within Australia

5.

In the first round of coordination, the Price afforded by the Distribution

Center is not given to the Manufacturing Plants and the Transporters.

6.

Instead, the Logistics Coordinator waits for the service providers to bid
with price.

Logistic Optimisation within Australia

The Transporter Agents perform local optimization using their own data
on routes, schedules and consignments.

The Manufacturer Agents will perform local optimization using data on

inventory, capacity and processing times.

The results of the optimization will be transferred to the Logistics

Coordinator Agent for global optimization.

Global Optimisation
After the Manufacturer and Transporter
Agents finish local optimization process,
they will commit the orders back to the
Logistics Coordinator Agent.
to combine the respective commitments to
produce joint commitments by summing up price
and lead times (for Q1, Q2 and Q3 respectively)

Global Optimisation
The optimization searching process
is to find the optimal point (see
Figure 12) which with acceptable
difference with that of the customer
requirement (with quantity, price and
due date).
If the point identified is still not
acceptable, a boundary box will be
defined around the optimal point to
set the lower and upper limits so that
a second round of bidding can be
done. This process will be repeated
until the solution converges.

A Suitable Scenario

The interest of this system is focused on improving the current logistic

demand to provide customers with the fastest delivery of their vehicles.
wish to send 20 cars to a country.
not feasible for TMCA to ship the cars.
With the system, TMCA invites other automotive manufacturers to join
collaborative e-logistic marketplace.
individual automotive manufacturers will submit their orders to the emarketplace.
Together with the shipping information provided by the freight companies,
the system will conduct an optimization searching process based on
manufacturers requirements (quantity, designation, price and due-date) and
the shipping details until the search has reached a optimal point when is
feasible for the shipment to be made to the country or even nearby ports
with the least time needed for the vehicles to arrive to their final
designations.

Integrating the four solutions in a big solutions

Integrating is made possible

In order to overcome the weaknesses as previously identified, the team have provide
with individual solution to address each weakness.

the proposed solutions are based on open standards means that is inherently easy to
modify.

designed to be flexible,

allows the stakeholders to decide on which system is to be integrated and which

system to be run alone.

Additionally, exposing functionality and data as services across the enterprise also
helps TMCA reduce overhead by eliminating the need for infrastructure duplication.

the messaging-oriented nature of these solutions enables the team to link sales,
marketing, manufacturing, and financial applications in real-time, which improves
customer service by making up-to-the-minute information accessible across our value
chain.

Therefore, the team strongly suggests the implementation of the integrated solution.

Topic Outline
Financial Analysis
By Loh How Whay

Financial Analysis
Increased ROI on Existing System
Toyotas WebLogic platform
WebLogic development environment is built
on the standards-based Java 2 Enterprise
Edition (J2EE) platform

Financial Analysis
Development Cost
Team of developers required by TMCA:
1 Project Leader
2 System Analysts
10 Programmers

SALARIES AND WAGES

Team member

Salary/wages for project

Project Leader

$50,000.00

Senior system analyst

$35,000.00

System analyst

$30,000.00

Programmer analysts

$60,000.00

Programmers

$160,000.00

System programmers

$50,000.00

Total salaries and wages

$385,000.00

Financial Analysis
SUMMARY OF DEVELOPMENT COST
Expenses

Amount

Salaries/wages

$385,000.00

Equipment/installation

$100,000.00

Trainning

$200,000.00

Facilities

$120,000.00

Utilities

$70,000.00

miscellaneous

$100,000.00

Licenses

$10,000.00

Support Staff

$50,000.00

Total

$1,035,000.00

Development Costs Graph

Financial Analysis
SUMMARY OF ANNUAL OPERATING COSTS
Recurring expense

Amount

Connectivity

$50,000.00

Equipment/installation

$20,000.00

Programming support

$80,000.00

Training & ongoing assistance

$120,000.00

Advertising

$50,000.00

Total recuring costs

$320,000.00

Annual Operating Costs

Graph

Financial Analysis
SAMPLE BENEFITS
Benefits/cost saving

Amount

Increased localization of
parts

$300,000.00

Efficiency and flexibility in

dealing with suppliers.

$200,000.00

Reduced shipping costs

$250,000.00

Increased sales of
cars/parts

$1,300,000.0
0

Other savings

$100,000.00

Total annual benefits

$2,150,000.0
0

Sample Benefits Graph

Topic Outline
Net Present Value
&
Return of Investment

NPV & ROI

Topic Outline

Financial Challenge

Financial Challenge

PROJECT COST

THE NEED TO TRAIN INTERNAL AND EXTERNAL USERS

Professional constraint programmers + months of development time

Significant investment amount from TMCA.

Company staff, suppliers, customers, automotive manufacturers, etc.

PROPER INFRASTRUCTURE NEEDS TO BE PROVIDED

Users need to be capable of operating the system

with minimal technical support
Requires a significant amount of time and money

THE NEED TO RETAIN SYSTEM EXPERTS

Crucial to ensure project success.

None of required skills currently available to develop/support the system

PREPARING FOR POSSIBLE OUTCOMES

Toyota should be prepared for project failure

A contingency plan

fallback to other alternatives e.g. AANX.

Topic Outline

Organisational Challenge

Organisational Challenge

COLLABORATION WITH PROJECT TEAM

IT staff to work closely with the development team

Business requirements and project goals to be met

Constant communication between the development team and TMCA staff

COLLABORATION WITH AUTOMOTIVE MANUFACTURERS,

SUPPLIERS & CUSTOMERS
Crucial requirements need to be identified successful solution
Effective system use by users

FOSTERING NEW RELATIONSHIPS

Marketplace will open up to potential customers and business partners
Vertical/Horizontal industry
Requires better customer & supplier relationship management

ADVERTISING THE NEW SYSTEM

Internal and external users mist be informed of new system
E.g. automotive manufacturers, suppliers & customers

Organisational Challenge
TRAINING USERS WITH NEW SKILLS & KNOWLEDGE
TMCA Needs to provide proper training methods to both internal and
external
users of the system;
USERS: Internal staff, suppliers, manufacturers & customers.

ACHIEVING GLOBAL REACH

International market remains major challenge for TMCA

CONVINCING TMC TO ADOPT THE SYSTEM

Pressure on TMCA for successful and reusable implementation

MONOPOLY ISSUES
Blackbox method
Solution 4 will be an optional solution which requires careful
consideration

Financial Feasibility
6 months to develop and deploy
Complexity
Benefits

Shipping cost reduction;

Higher percentage of parts localization;
Increased profitability;
increased efficiency;
etc.

Topic Seminar

Cost Benefit Analysis

Cost
Categories of Cost

Significant

Development/maintenance costs

Getting existing suppliers to use the system

Minor
X

Reduction of shipping cost

Attracting new suppliers

Major

Disruptions to staff

Additional staff to handle the system

Threat of competitors taking advantage of similar technology and

achieving similar efficiency improvements.

Benefits
Categories of Benefits
Increased localization of parts

Significant

Major

Minor

Expanded sales and customer base

Efficiency and flexibility in dealing with suppliers.

Gaining experience that would assist with future e-commerce ventures.

Increasing the business competitive advantage

Suppliers remain loyal due the range of services offered

Organizational Feasibility
New solution to work in tandem with the
existing system
Phased installation
Ensures that organisational operations will not be
affected dramatically during implementation.
Relationship between Toyota & suppliers improved
higher degrees of collaboration
System

Introduction Highly Feasible

Conclusion
The study is being conduct in procedural manner.
Focus on current supply chain and what the current IT
setup exist
Weakness were identified based on overall supply chain
process
Goal are set to close the current gap of inefficiency
identified.
Based on each goals, solutions are derived.
To prove worthiness of each solution, illustrates in terms
of business needs are provided.
Other factors, such as challenges and financial, have
proofed feasible for these proposed solutions to be
implemented.

Q & A Session