Section 7. The Functions that Supported Globalization

Item 2. Reducing Cost and Ensuring Quality

Reducing in-house production costs

The BT2 project began in earnest in 2002, run concurrently with the CCC21 initiative. According to the benchmarking surveys conducted by the BT2 secretariat prior to the project kickoff, there were in fact several instances in which Toyota lagged behind competitors in cost and quality.

The production engineering and manufacturing divisions worked with the accounting and procurement divisions on "strengthening competitiveness of in-house production" (one of the topics set to be tackled during the BT2 initiative) and conducted a reform of plant operations by methods such as visualizing in-house production costs, while embarking on the development of revolutionary forms of production engineering, including simplifying and slimming of facilities.

For in-house production costs, plant cost-management programs were revised based on a plant cost control system that had been developed until then mainly by the Accounting Division starting in 1993, resulting in a new and improved plant cost control system in April 2003. The scope of the system, which had previously focused on variable costs, was expanded to an "all expenses incurred" approach that included fixed costs such as maintenance and depreciation expenses, making it easier to grasp the overall picture during cost improvement exercises. Plant cost control countermeasures continued after the conclusion of the BT2 project, with the establishment of a specialist working group in 2006 and the creation of a "plant improvement analysis system" by unifying itemized cost evaluation methods.

In the field of cylinder block die-casting machinery, there was a development toward higher levels of compactness and accuracy, for instance through the adoption of the world’s first open-and-close mechanism on die-casting machinery. In the case of machinery for the V6 engine, these improvements achieved a 50% saving in both total machinery cost and the space required for installation. Following the installation of the first such machinery in 2003, it was rolled out to Toyota affiliates across the globe and as of 2008 had been installed on around 100 production lines, including a number belonging to affiliates.

TMC's BT2 initiative also aimed to streamline the production system and logistics operations, promoting yosedome, or the "gathering" of production lines to improve efficiency through merging and consolidation. For vehicle production, in addition to restructuring manufacturing of truck-type vehicles, drastic yosedome was also performed for major components such as engines, on an individual plant level. Distribution of completed vehicles, which had previously been shipped from four ports in central Japan, was also consolidated. After the yosedome of distribution, in principle only Nagoya port and Tahara port in Aichi Prefecture were to be used, which reduced costs.

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