Toyota Way

Seminar on GREEN MANAGEMENT & Corporate Competitiveness ~ Tradeoff or Opportunities ?
JBIC Partnership Forum in Asia
50 Year Golden Year Indonesia ~ Japan Friendship
on Environment Management
Contribution of CO2 Reduction in Manufacturing & Logistic Activities
by Hidematsu Ibaragi (President Director) I Made Dana M.T (Senior General Manager)
Jakarta, November 4, 2008
TOYOTA WAY
TOYOTA MOTOR MANUFACTURING INDONESIA TOYOTA MOTOR MANUFACTURING INDONESIA
Presentation Outline
Page
1. INTRODUCTION.....................................................................................
* TMMIN Company Profile & Product Line Up..
3 3 5 5 10 11 12 26
2. TOYOTA POLICY ON ENVIRONMENT.

a. Toyota Global Vision b. TMMIN Environment Action Plan (Focus Item)
3. IMPLEMENTATION OF TMMIN ENVIRONMENT ACTIVITIES. > CO2 Reduction in Manufacturing & Logistic Activities. 4. CONCLUSION.
TOYOTA MOTOR MANUFACTURING INDONESIA
1. INTRODUCTION
Company Profile
Head Office
Jl. Yos Sudarso, Sunter II, Jakarta 14330 Phone (62-21) 6515551 (hunting), Fax. (62-21) 6515360
Total Employee
5,271 persons
Share Holders
Toyota Motor Corporation (95%), PT Astra International Tbk (5%)
Production Facility
Sunter I Plant :
Engine Plant (13,000 Units/Month) Packing Plant (5000 Units/Month) AREA : Land 41,527 m2
Sunter II Plant :
Casting Plant (1,000 Tons/Month) Stamping Plant (8,000 Units/Month) U-IMV Packing Plant (4,200 Units/Month) AREA : Land 129,275 m2
Karawang Plant :
Integrated Mfg. Facility Stamping, Welding, Painting, Assembling CAPACITY AREA : 100,000 Units/Year : Land 100 HA (Used 30 HA)
TMMIN Product Line Up

Starting of Production June 2008
Domestic Starting of Production Oct 2006
Domestic & Export Starting of Production Aug 2004
Domestic & Export
2004
2005
2006
2007
2008
Basic Toyota Global Vision Environmental Mission 2) Approach to Business Process

eo u u s f E tion Dev latio nv elo n iro pm nm en en t tal Inf orm ati on
a. Toyota Global Vision a. Toyota Global Vision
2. TOYOTA POLICY ON ENVIRONMENT
Th M e Ad ost in mi W r Re orl ed gio d & na Mo l Ha noz En rmo ukur vir ny i in G on wi lob me th S nt OC al W N C s ar m atu H om ing re S um plian Re D ocia an R ce so urc isc l C es with los on our R es ur trib ce eg
Approach 1) Approach to Environment Issue
Toyota Global Vision
Cycles of Nature Monozukuri in harmony with cycle of nature
Monozukuri means more than simply manufacturing products, but instead covers a set of activities and processes, from development through production to sales and service, that create added value to fully satisfy our customers.
Toyota Global Vision
Cycle of Industry Service of Social Development
Toyota Product Development

Ultimate Eco-Car
Issue
CO2 reduction
Issue
Alternative fuel HV Diesel HV
FCHV Plug-in HV THS II
Hybrid Technology
Energy issues Biofuels Synthetic fuels CNG DPNR Common rail DI D-4 Lean burn VVT-i EV
Issue
Air quality issues
Alternative fuel engines
Diesel engines
Gasoline engines
Electrical energy
Hybrid technology boosts performance for all powertrain systems

8 TOYOTA MOTOR MANUFACTURING INDONESIA
Toyota Global Environment Action Plan

Environment Focus Item
3. Substance of Concern Energy/ 2. Atmospheric Global Warming Quality
Reduce the discharge of substances (SoC)
4. Energy (Global Warming)

Reduce CO2 emissions in each country & region
Implement initiatives to reduce VOC emission
Recycling Substances Substances of of Concern Resources Of Concern
Reduction of Waste & Water
The Fourth Toyota The Fourth Toyota Environmental Action Plan Environmental Action Plan
1. Cooperation with Society

Disclosures of environmental information & two way communication
Management
Strengthen consolidated environment management
: Focus Explanation
Toyota Earth Charter

2. TOYOTA POLICY ON ENVIRONMENT b. TMMIN Environment Action Plan ( (Focus Item) b. TMMIN Environment Action Plan Focus Item)
1.Cooperation 1.Cooperation With Society With Society 2.Atmospheric 2.Atmospheric Quality Quality 3.Substance 3.Substance of Concern of Concern
CSR & Community Development Activities Reduce VOC (Volatile Organic Compound) from Painting process Incinerator Recovery Thinner Introduce ESG top coat stack Eliminate SoC in Part (4 heavy metal parameter) SoC free for Investigation & switch over Innova~Fortuner Reduce CO2 emission in manufacturing & logistic activities Manufacturing Alternative Energy Logistic Grasp CO2 data Fuel & truck efficiency Packing materials reduction Target Setting & PDCA Regional No.1 Local No.1 Zero Emission Zero Waste
Water borne
SoC free for Avanza
Follow up control & regular audit
4.Energy / / 4.Energy Global Warming Global Warming
Energy efficiency for process
Continuous improvement to reduce electric & fuel consumption (PDCA)
Recycling Recycling Environmental Environmental Management Management
Reduce water consumption & waste minimization Optimize reuse water Waste recycle (Hazardous) Waste Water Management Soil & Air Pollution
Continuous Cleaner Production Environment Performance
Implement ISO 14001 incorporated with Toyota Global EMS
Oct. 2007
10
2008
2009
2010
2011
3. IMPLEMENTATION OF TMMIN ENVIRONMENT ACTIVITIES

(Example & Focus Points)
3.1 Cooperation with Society 3.2 Atmospheric quality 3.3 Substance of Concern (SoC) 3.4 Energy / Global Warming
11
3. Implementation of TMMIN Environment Activities 3.1 Cooperation with Society Objective : 1. Empowerment Community Surrounding TMMIN business 2. Perform TMMIN's concern and contribution to the country & society
Example 1)
Greenery Program
Plantation in surrounding TMMIN Location : Karawang Residence
Example 2)
Toyota Eco Youth Program
Environmental Improvement Contest for Senior High School student Scope : National (30 School, 13 Provinces)
Impact :
12
Contribution to local community Build trust with local groups Positive atmosphere

3. Implementation of TMMIN Environment Activities 3.2 Atmospheric quality

What is VOC ?
V OC Evaporated Organic Chemical
Reduce VOC (Volatile Organic Compound) from Painting

Improvement Example :
Optimizing use for Painting Robots
1. SURFACER ROBOT
Sunlight
Photochemical smog Suspended particulate matter (SPM)
Process
Recovery Thinner 2007
Use of Solvents Paints & Coating
Respiratory illnesses
(Impact of VOC)
Painting Process
2006
2. CLEAR ROBOT
TMMIN VOC (Emission) Reduction Achievement

68 65
67.16 64.21
gr / m2
= Actual = Target
70
Tack Time Change VOC Reduction : 1.01 g/m2
Change gravity to pump system VOC Reduction : 3.09 g/m2 2008
60
59.45
60
Application ESG (Electronic Static Gun)
55
Target 50
50
Major Activity
2006 Optimizing Paint Robot
2007 Recovery Thinner
2008 Application Electronic Static Gun
2009 Incinerator for top coat stack
2010 Water borne
ESG Application on Spray Clear (6 Guns) VOC Reduction : 1.22 g/m2

3. Implementation of TMMIN Environment Activities 3.3 Substance of Concern (SoC)

Progress Status 2007~2008
No 1 Vehicle Innova, Fortuner Total Part (SoC content) 130 parts Status SoC Free 100% Remark as 1 Agt 2008
Eliminate SoC in Part : Lead (Pb), Cadmium (Cd), Mercury (Hg), Hexavalent Cromium (Cr6+)
Part Example : Bracket Exhaust Tail
CR 6+ CR 6+
Avanza
20 parts
On Progress
Target complete 2009 Dec 2009

Before (SoC content) (SoC After (SoC Free) (SoC
Total Suppliers (SoC) 97 Companies

2 Companies (Remaining) 20 Parts
Total Parts (SoC) Avanza

Bulb
Pb, Cd Pb,
Stay Head Rest

CR 6+
95 Companies (SoC Free)
Innova Fortuner
130 Parts (SoC Free)

3. Implementation of TMMIN Environment Activities 3.4 Energy / Global Warming

TMMIN CO2 Reduction Activities TMMIN CO2 Reduction Activities
Reduce CO2 emissions Reduce CO2 emissions Manufacturing Manufacturing
Reduce CO2 emissions Reduce CO2 emissions Logistic Logistic
B1
Internal Logistic Internal Logistic
B2
External Logistic External Logistic Logistic Logistic
a. Local Parts Delivery System b. Packing Container Efficiency Up
3. Implementation of TMMIN Environment Activities

A. CO2 Reduction in Manufacturing Activities
FY 2007 ~ 2008 : Utilization of alternative energy
CO2 Generated
Ton CO2/Unit
0.48 0.45 0.43

as Sept 0 8
Reduction Target 15% 0.414 0.407

Target
0.6 0.5 0.4 0.3 0.2 Replacement of Diesel Oil with Natural Gas
CO2 reduction : 274 ton CO2 / Month Total Invest :Rp. 11.5 Billion Cost reduction : Rp. 1,4 Billion/Month
06
07
08 Year
09
10
Return on Investment : 9 Months
Future Activity : > Improve process for energy efficiency

B1
B2
B1. CO2 Reduction in Internal Logistic Activities
TMMIN
CO2
CO2
PRODUCTION LINE
Volume
(Stock, Space)
Supplier
Store
Lead Time (L/T) BASIC THINKING Volume & L/T

Machine Machine Man Man by 4 M Analysis
(Man, Machine, Material, Method)
Forklift Forklift Towing Towing Operator Operator Others Others

REDUCE VOLUME & REDUCE VOLUME & LEAD TIME LEAD TIME
COST COST REDUCTION REDUCTION CO2 CO2 REDUCTION REDUCTION
Time
Internal Logistic Improvement Example
REDUCE FORKLIFT OPERATION at ENGINE PLANT LOGISTIC SYSTEM

BEFORE
C R A N K S H A F T M A C H IN IN G L IN E
C R A N K S H A F T M A C H IN IN G L IN E
AFTER
M A C H IN IN G
FORKLIFT SPACE : :2,154 m2 FORKLIFT SPACE 2,154 m2 FORKLIFT : :33Units FORKLIFT Units COST/DAY : :Rp. 216,000 COST/DAY Rp. 216,000 CO2 2: :690 Kg/Day CO 690 Kg/Day
CAM SHAFT M A C H IN IN G L IN E M A C H IN IN G C Y L IN D E R B L O C K L IN E FINISH GOOD ENGINE
C Y L IN D E R H E A D M A C H IN IN G L IN E
BIG PART AREA
EMPTY PALLET AREA SHORTAGE TANK
BIG PART AREA TRANSIT AREA

PART DEFFECT AREA
FORKLIFT SPACE : :1,820 m2 FORKLIFT SPACE 1,820 m2 FORKLIFT : :22Units FORKLIFT Units COST/DAY : :Rp. 144,000 COST/DAY Rp. 144,000 CO2 2: :460 Kg/Day CO 460 Kg/Day
CAM SHAFT M A C H I N I N G L IN E FINISH GOOD ENGINE C Y L IN D E R B L O C K L IN E
C Y L IN D E R H E A D M A C H I N I N G L I N E
BIG PART AREA
EMPTY PALLET AREA SHORTAGE TANK
BIG PART AREA TRANSIT AREA

PART DEFFECT AREA
DELIVERY KARAWANG
DELIVERY KARAWANG
SUB MAIN LINE
BP
RECEIVING CHECK RECEIVING CHECK
SUB MAIN LINE
BP
BP
PACKING AREA PALLET SAFETY STOCK PALLET SAFETY STOCK MACHINING PART MACHINING PART
BP
PACKING AREA PALLET SAFETY STOCK PALLET SAFETY STOCK MACHINING PARTPART MACHINING
PREPARE ENGINE COLLECT AREA TEMPORARY AREA
RECEIVING 1 F
PREPARE ENGINE COLLECT AREA TEMPORARY AREA
RECEIVING 1 F
BP
BP
BP
BP
B B
BP
BP
BP
BP
B B
RECEIVING CHECK
RECEIVING CHECK
RECEIVING CHECK
RECEIVING CHECK
EMPTY STORE
EMPTY STORE
UNBOXING AREA
ASSY LINE TR
EMPTY STORE
RECEIVING 1 E
UNBOXING AREA
EMPTY STORE
RECEIVING 1 E
OVER FLOW
FREE LOCATION RACK
TEST BENCH TR
B
TEST BENCH TR
WAITING LANE
BP
AREA TRAINNING CENTER
Utilize Towing or Manual Handling

B
ASSY LINE TR
OVER FLOW
FREE LOCATION RACK
WAITING LANE
FREE LOCATION RACK
BP
FREE LOCATION RACK
BP
BP
1 2
1 2
AREA TRAINNING CENTER
EMPTY BOX READY DELIVERY TO SUPPLIER
EMPTY BOX READY DELIVERY TO SUPPLIER
A A A
PROGRESS LANE 4 AREA 5

M121 M121 M126 M126 J004 J004 M125 M125
A A
PROGRESS LANE 4 AREA 5

A M121 M121 M126 M126 J004 J004 M125 M125
J040 J076 J011 J023 M18C M18B M18A J020 J040 J076 J011 J023 M18C M18B M18A J020
PC STORE AREA
P1B P1B 15 14
OK M
M M 010 009
P1B P1B P1B P1B P1B P1B 12 11 10 09 08 07
J016 M J016
6 7 76
B
KANBAN ROOM
KANBAN ROOM OASIS LOGISTIC TR
J040 J076 J011 J023 M18C M18B M18A J020 P1B P1B J040 J076PC STORE AREA M18A J011 J023 M18C M18B
15
J020
14
OK M
M M 010 009
P1B P1B P1B P1B P1B P1B 12 11 10 09 08 07
J016 M J016
6 7 76
B
KANBAN ROOM
KANBAN ROOM OASIS LOGISTIC TR
PC STORE AREA
0051 O K M
PC STORE AREA
0051 O K M
8
START
8
START
9
P3A 27 P3A 26 P3A 25 P3A 24 P3A 23 P3A 22 P3A 21
9
P3A 27 P3A 26 P3A 25 P3A 24 P3A 23 P3A 22 P3A 21
P2A P2A P2A P2A PC STORE AREA17 20 19 18
P2A 16
P2A 15
P2A 14
P2A 13
P1A
P1A 10
P1A
9
11
PC STORE6 AREA 8 7 5
P1A
P1A
P1A
P1A
P1A 4
P1A 3
P1A 2
P1A 1
10 11
PC STORE AREA17 20 19 18
P2A
P2A
P2A
P2A
P2A
P2A 15
P2A 14
P2A
13
P1A
11
P1A 10
P1A 9
16
PC STORE6 AREA 8 7 5
P1A
P1A
P1A
P1A
P1A
4
P1A 3
P1A 2
P1A
1
10 11
OASIS ASSY TR
OASIS ASSY TR
START
12
START
12
Remarks : = Area Forklift
- TOWING A = FILL IN LOCAL PART - TOWING B = FILL IN IMPORT & SUPPLY
Remarks :
= Area Forklift
- TOWING A = FILL IN LOCAL PART - TOWING B = FILL IN IMPORT & SUPPLY
: Forklift need : Forkliftless
1) Productivity : Space Reduction for Forklift Operation : 334 m2 Forklift Reduction : 1 Unit 2) Safety : Reduce potential forklift (car) accident 3) Environment : CO2 Reduction : 230 Kg/Day 4) Cost : Reduction : Rp. 72,000/Day TOYOTA MOTOR MANUFACTURING INDONESIA

B1
B2
B2. a. CO2 Reduction in External Logistic Activities TMMINs Logistics Supply Chain
B.2a
CO2
EXTERNAL LOGISTICS EXTERNAL LOGISTICS B.2b

CO2 CO2
Local Supply Parts (LSP) Export

Port
Volume
TMMIN Production Plant Import Parts (MSP/JSP)

Port
Importer
CO2 CO2
Tact Time :
Main Distributor
Lead Time (1)
Lead Time (2)
Working Hours No. of Production/Sales
BASIC THINKING
Volume & L/T
Machine Machine
by 4 M Analysis
Volume & L/T

Same Concept
Machine Machine
by 4 M Analysis
REDUCE VOLUME REDUCE VOLUME
(Truck Efficiency, Lot) (Truck Efficiency, Lot)
Truck Truck Efficiency Efficiency Operator // Operator Driver Driver


Container efficiency Container efficiency Part Module Part Module
(Waiting time, Stagnant time, etc) (Waiting time, Stagnant time, etc)
&& LEAD TIME LEAD TIME
Man Man Material Material
COST COST REDUCTION REDUCTION
CO2 CO2 REDUCTION REDUCTION
Part, Stock Part, Stock
Time
Time 2 TOYOTA MOTOR MANUFACTURING INDONESIA
Truck Transportation ( Example )
TMMIN LOCAL SUPPLIER MAP SUNTER

TMMIN
CIBITUNG/CIKARANG BEKASI
TMMIN
TANGERANG
KARAWANG/CIKAMPEK
BOGOR
2
= TMMIN Direct Supplier = TMMIN Milkrun Supplier TOYOTA MOTOR MANUFACTURING INDONESIA
External Logistic Improvement ( Example )
LOCAL PARTS DELIVERY SYSTEM

Before : Direct Delivery
29 Km 28 Km 25 Km Cikarang 33 Km 36 Km 39 Km Cibitung Cibitung
After : Grouping Delivery
TOTAL ACHIEVEMENT UP TO SEPT 2008
Distance Reduction 43200

33 Km
42400
1,128 Km/day
42,560 41,433
TMMIN
Karawang Plant
Cikarang
TMMIN
Karawang Plant 46 Km
41600
40800
Before
10400 Fuel Reduction
After
6 Delivery/Day, 190Km
Empty Space
2 Delivery/Day, 79Km
9600
262 L/day
9,874 Loading Efficiency : 89%

8800
9,613
Before After
Empty Space
CO2 Emission Reduction

27 26 25 24 23
28
68O Kg/day
25.9 25.2
Before After TOYOTA MOTOR MANUFACTURING INDONESIA
B2. b. Packing Container Efficiency Up TMMINs Logistics Supply Chain

B.2a
CO2
EXTERNAL LOGISTICS EXTERNAL LOGISTICS B.2b

CO2 CO2
Local Supply Parts (LSP) Export

Port
Volume
TMMIN Production Plant Import Parts (MSP/JSP)

Port
Importer
CO2 CO2 Main Distributor
Lead Time (2)
BASIC THINKING
Volume & L/T
Machine Machine
by 4 M Analysis
Volume & L/T

Same Concept
Machine Machine
by 4 M Analysis
REDUCE VOLUME REDUCE VOLUME
(Truck Efficiency, Lot) (Truck Efficiency, Lot)


(Waiting time, Stagnant time, etc) (Waiting time, Stagnant time, etc)
&& LEAD TIME LEAD TIME
COST COST REDUCTION REDUCTION
CO2 CO2 REDUCTION REDUCTION
Time
TOYOTA MOTOR MANUFACTURING INDONESIA 2
Time
Packing Improvement Example
PACKING CONTAINER EFFICIENCY UP (CKD Export to Philippine)

Before : Direct Delivery After : Milk Run Delivery
ACHIEVEMENT UP TO SEPT 2008 CONTAINER EFFICIENCY
96% 94%
94 %
TMMIN Packing
Importer
TMMIN Packing
92%
Importer
90% 88%
66 Container/Day
54 Container/Day
8 6%
86% 84%
0 82%
B efore
A fter
EMPTY SPACE
NO EMPTY SPACE
NUMBER 100
80 60 40 20 0
OF CONTAINER
20 Cont./day
Before
After
CO2 EMISSION REDUCTION
Trucking :
3150 Kg/Day
Shipping (130 Ton/Cont):
674,700 Kg/Day
4. Conclusion
1. Environment conservation is important to be done to save the earth & as corporate social responsibility (CSR) 2. Environment management activities aligned with company goal to reduce cost and increase efficiency 3. To achieve cost reduction & CO2 reduction in manufacturing and logistic activities, it will maximize achievement of corporate competitiveness

Toyota Way

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Seminar on GREEN MANAGEMENT & Corporate Competitiveness ~ Tradeoff or Opportunities ?

JBIC Partnership Forum in Asia

50 Year Golden Year Indonesia ~ Japan Friendship

TOYOTA MOTOR MANUFACTURING INDONESIA TOYOTA MOTOR MANUFACTURING INDONESIA

2. TOYOTA POLICY ON ENVIRONMENT.

TOYOTA MOTOR MANUFACTURING INDONESIA

TOYOTA MOTOR MANUFACTURING INDONESIA

TMMIN Product Line Up

Domestic Starting of Production Oct 2006

Domestic & Export Starting of Production Aug 2004

Domestic & Export

TOYOTA MOTOR MANUFACTURING INDONESIA

Basic Toyota Global Vision Environmental Mission 2) Approach to Business Process

a. Toyota Global Vision a. Toyota Global Vision

2. TOYOTA POLICY ON ENVIRONMENT

Approach 1) Approach to Environment Issue

Toyota Global Vision

Cycles of Nature Monozukuri in harmony with cycle of nature

TOYOTA MOTOR MANUFACTURING INDONESIA

Toyota Global Vision

Cycle of Industry Service of Social Development

TOYOTA MOTOR MANUFACTURING INDONESIA

Toyota Product Development

Alternative fuel HV Diesel HV

FCHV Plug-in HV THS II

Air quality issues

Alternative fuel engines

Hybrid technology boosts performance for all powertrain systems

Toyota Global Environment Action Plan

4. Energy (Global Warming)

Implement initiatives to reduce VOC emission

Recycling Substances Substances of of Concern Resources Of Concern

Reduction of Waste & Water

1. Cooperation with Society

Toyota Earth Charter

SoC free for Avanza

Follow up control & regular audit

4.Energy / / 4.Energy Global Warming Global Warming

Energy efficiency for process

Continuous improvement to reduce electric & fuel consumption (PDCA)

Recycling Recycling Environmental Environmental Management Management

Continuous Cleaner Production Environment Performance

Implement ISO 14001 incorporated with Toyota Global EMS

TOYOTA MOTOR MANUFACTURING INDONESIA

3. IMPLEMENTATION OF TMMIN ENVIRONMENT ACTIVITIES

TOYOTA MOTOR MANUFACTURING INDONESIA

Toyota Eco Youth Program

3. IMPLEMENTATION OF TMMIN ENVIRONMENT ACTIVITIES

TOYOTA MOTOR MANUFACTURING INDONESIA

3. Implementation of TMMIN Environment Activities 3.2 Atmospheric quality

Reduce VOC (Volatile Organic Compound) from Painting

Use of Solvents Paints & Coating

TMMIN VOC (Emission) Reduction Achievement

Tack Time Change VOC Reduction : 1.01 g/m2

Change gravity to pump system VOC Reduction : 3.09 g/m2 2008

Application ESG (Electronic Static Gun)

2006 Optimizing Paint Robot

2007 Recovery Thinner

2008 Application Electronic Static Gun

2009 Incinerator for top coat stack

2010 Water borne

ESG Application on Spray Clear (6 Guns) VOC Reduction : 1.22 g/m2

TOYOTA MOTOR MANUFACTURING INDONESIA