Agenda

• Introductions• Business Conditions• Toyota Transformation

– TNGA, Reborn, NA1T– Process/Collaboration Reform

TTC Purchasing/SED/Cost Planning

Robert YoungGroup Vice President

Noby TanakaExecutive Advisor

Mak TakekawaVice President

Seiya NakaoPresident, TTC

Direct &    Manufacturing 

Indirect Purchasing

Cost Planning

Supplier Engineering Development

TTC Purchasing/SED/CPD OrganizationDeb 

Schroeder

Seats, Interior &

Exterior

Jamie Todd

Powertrain,Chassis

& Functional

Greg Laskey

Electronics, Electrical & 

Body

Jason Reid

Materials &Indirect

Jim Holloway

Supplier Relations, Diversity, Risk Mgt., 

& Systems

Ryan Grimm

Project Mgmt.,Service &Export

Eric Doll

SED I

Chris Kostopoulos

SED II

BrianJordan

SED III

Luc Zilio

SED V

KimEngel

SED IV

Dave Girvan

Cost Planning

Introduction

Adam KaribianVice President, Vehicle Monozukuri& Data MgmtSr. Executive Engineer –Body DesignToyota Technical Center, York Township, MI

Agenda

• Introductions• Business Conditions• Toyota Transformation

– TNGA, Reborn, NA1T– Process/Collaboration Reform

2015 ReflectionVehicle Production

2011 2012 2013 2014 2015

Production

Capacity Increases 2015 Toyota Sales

2015 Industry Sales2M

Vehicle YearCapup amount

Comment

Tacoma 2015 +30K TMMBC shift pattern

2015 Reflection

GR Kai

New Launches Next Gen TNGA Development

2016 and Beyond

10.4 11.6 12.814.5 15.6 16.5 17.5

2009 2010 2011 2012 2013 2014 2015 2016 2017

VOLUME UNCERTAINTY

ADJUST PRODUCTION MIX TO MARKET

49.4% 51.1% 50.0% 48.2%43.2% 41.1%

50.6% 48.9% 50.0% 51.8%56.8% 58.9%

30.0%

40.0%

50.0%

60.0%

70.0%

11CY 12CY 13CY 14CY 15CY 16CYTD

LV Sales % of TotalCar Truck

Leveling Market

Prepare for next downturn

2016 and Beyond Development & Production Preparation (TNGA Deployment)

TMMGT Preparation

Early SourcingSienna

HighlanderTrucksEngines

Guanajuato, MXCorolla, 2019

Midterm Challenges & Opportunities

New Entrants New Mobility Models Hardware ‐> Software Value

Future Mobility: Conventional Mobility:

Strong Competitive Landscape: Marketability Quality Active Safety Fuel Economy Mass Reduction Fleet Optimization

Global Cost Competitiveness

80+% of Mix for Foreseeable Future Change Point/Opportunity Prep

Agenda

• Introductions• Business Conditions• Toyota Transformation

– TNGA, Reborn, NA1T– Process/Collaboration Reform

"Sudden and drastic changes in the business environment means that conventional ways of thinking and doing business can no longer help us grow sustainably. We are at a crossroads where we must now build a new business model.”

Toyota TransformationThe Need for Change

13

Making Better Cars Through TNGA

Akio Toyoda 

Collaboration Reform

Toyota Transformation

Safety Quality MonozukuriMfgr. Optimization

Collaborative Advanced Development: Linking Design and Manufacturing

Innovation to develop the best next generation platform/series/family solutions.

Frontload Collaboration

Toyota’s New Global ArchitectureTNGA

Manufacturing ReBORN: Footprint Alignment 

• First launch of TNGA in NA

• Maximize family development

• Centralize  midsize production close to OEM supply base

• Enhance flexibility to the market

• Corolla #1 selling compact car –2014

• Re‐alignment of supply chain center of gravity to the South

• Continue to align supply chain for Tacoma parts

• Implement mid‐term strategy to meet customer demand and maintain flexibility

ReBORN

Ever Better Cars Optimize Vehicle& Location

Stable Growth & Competitiveness

Mid‐sized Small Truck

ReBORN:  Ever Better PlantsReBORN

NA1T ‐ One Toyota  Streamline Decision Making

Integrate Regional Functions

Strengthen Midterm/Long Strategic Planning

Enhance Development thru Colocation

Accelerate Innovation

NA1T

NA1T StructureNA1T

Jim LentzCEO, NA

Plano UpdateNA1T

Georgetown Update

TMMK

NA1T

York UpdateNA1T

NA1T

Prototype Building 

4th Qtr 2016

York Co‐locationDesign / Collaborate / Trial

Supplier Center1st Qtr 2017

(E3) Engineering Design Building

Collaboration Reform

Co‐LocationNew 

Organizational Structure

Process Reform‐ Safety‐ Quality‐ Manufacturing 

Optimization‐ Advanced 

Development

Pur & SED• Increased headcount• Reduced Span of 

Control• Alignment with Design 

Divisions

Workplace Safety 

Process Score

TIR Result

Process Reform

Link Collaboration with Risk

Objective: Continuous Improvement

Actions based on Risk Assessment

Total Incident Rate DataProcess Self Assessment Update Annually

Output:   ‐Trend Data  (Process and Result)                  ‐Focused Activity for Common Areas of Improvement‐Increased Best Practice Sharing‐Go & See to support Process Kaizen           

Low Medium High

Process Risk

HH

ML MM MH

LM

High

Medium

Low LH

HM

Results

 Risk

HL

LL

Quality Collaboration Process Reform

Quality CollaborationAnnual Quality Business Meeting  (AQBM), May 2016

Purpose and Intent• Share Quality Priorities & New Initiatives• Strengthen Collaboration & Best Practice Sharing• Strengthen Continuous Improvement for Quality

Award Winner Board Display (Best Practice Sharing) AQBM Meeting Q&A Panel

Reactive   Proactive

Process Reform

Manufacturing OptimizationGoal: Continuous Benchmark & Improvement

Benchmarking Problem Solving Kadai (ideas)Yamazumi

Poor Line Balancing

Standard Work Flow

Supply Chain Mapping

Rate & Usage

Process Reform

COMMODITYNEW SUPPLIER CENTER

VEHICLENEW VEHICLE MONOZUKURI CENTER

Advanced Development Collaboration

• Frontload Collaboration• Ensure One Voice

Monozukuri:The Art, Science & Craft of making things (mono: thing made, zukuri: act of making).

‐ Technology & processes integrating development, production & procurement targeting quality and continuous improvement.

Commodity Development CollaborationCommodity Reform

Advanced Commodity CollaborationExamples

Des

ign

Before After

Proc

ess

Optimal Design

25% more efficient process

Focused Team Collaboration

Scope

2

3020

40

FY14 FY15 FY16 FY17

Commodity Reform

Obeya Reform Vehicle Reform

Commodity Vehicle

K4 SE Genzu CVModAdvancedStage

ObeyaCommodity WG Kobeya

Find and Fix Process during Drawing Stage – Catch Issues Pre‐Release – Reduce ECIs

Appearance study confirmed by Rapid P, Functional study confirmed by Machined Parts

Enhance Obeya with Physical Parts Enhance Utilization of CV

Use all CV to evaluate specification differences and variations 

Strengthen development using physical parts.

Enhance Prototype Quality

Make decisions with all stakeholders present using Rapid Prototype and prototype parts. 

Within Obeya/Kobeyanew 3D Printer

Obeya/Kobeya Reform

Catch issues during DRW stage based on Physical Materials (RP and Proto Parts)

Vehicle Reform

Engineering Building Purchasing Building

3rd Floor Obeya 1st Floor Supplier Center

C/F Kobeya‐ Design‐ Purchasing/SED‐ Suppliers‐ Prototype Division

‐ QE‐ NAMC

Kobeya

Obeya moves to PD Building 

at CV

Kobeya Reform Vehicle Reform

SED Frontloading

• Risk Assessment (Product, Process, Capability – All Tiers)• Drawing Review for Manufacturability• Process Planning Support• DR Activity (Risk Identification) & Recurrence Prevention• Cost Engineering Support• Joint Design Feedback/Negotiation

Strengthen TNGA Risk & Change Point Assessment Frontload Collaboration & Link with Family Development Strengthen Systems, Capacity and Capability

Vehicle Reform

Collaboration Reform

Toyota Transformation

Safety Quality MonozukuriMfgr. Optimization

The Toyota Way Purchasing Principles Collaboration

Kaizen

GenchiGenbutsu

Challenge

Teamwork

Respect

Kaizen

GenchiGenbutsu

Challenge

Teamwork

RespectRespectfor People

Continuous Improvement

Strengthen our Foundation

We Can Only Succeed Together

THANK YOU