Supply Chain Agility

1. Supply Chain Agility Matt Hall Toyota Motor Engineering & Manufacturing North America Business Process & Systems Management

2. Manufacturing NAMC Locations TMMC Export SIA Service TMMI TMMWV TMMK TMMAL TABC TMMBC TMMMS TMMTX

3. Supply Base Locations Each blue dot represents a Toyota supplier

4. High Level Supply Chain Image Separation Center Crossdock Toyota Manufacturing Suppliers Up to 10 days lead-time (Average = 4 days)

5. Tier 1 Freight – NA Suppliers Plant Boxes per day Vehicles per day TMMK 147,623 1,922 TMMC 101,268 1,518 TMMI 87,720 1,204 TMMTX 47,487 897 TMMMS 31,382 660 SIA 17,764 388 TMMBC 8,214 223 Totals 441,458 6,812 80-90% 7.6 Vehicles per minute

6. March 11th 2011 Tsunami Hits 2 years ago

7. 2011 Tsunami Crisis • March 11th Horrible time in Japanese history • Lost many lives • Lost many businesses (Suppliers included) The March 11 Earthquake and Tsunami in Japan devastated suppliers that were located in the Miyagi prefecture in Northeast Japan close to the epicenter of the quake that provide a wide variety of electronic parts to the entire automotive industry. Parts supply became an issue. Directive: Operate Tues, Wed, Thurs at 50% capacity Supply Chain Challenge: Respond quickly – be flexible Reduce cost Be able to return to full capacity quickly (approx. 30 day lead-time for route planning) Minimize impact to suppliers and logistics partners

8. Log: Lead Manufacturing Planning Production Strategy BP&SM Prod Plan Decision Line up: Prod Plan to Op/Log Plan Crisis Roles Overview • Understand/input to prod. strategy by each Manufacturing location • Discuss/propose viable options to considering: • Supplier leadtime/impact • Logistics impact • System constraints • Discuss/instruct IS on changes by plant. Each NAMC differences (see example) requires different system operation: TX – leadtime BC-leadtime, Order Release TMMC-different systems

9. Crisis Decision Making Components*Prod Plan Alignment to Op/Log Plan • Decision Making Criteria: • # of Days Notice • Duration of Shutdown • Supplier Leadtime • *4. Operation Days/Pattern • *5. Pick up Days • 6. Order Method • *7. Unique Conditions • 8. Data Promise Times • 9. Vehicles schedule management • 10. Length of Virtual Line • 11. # of assembly Lines • 12. Vehicle Models • 13. Supplier Manpower • 14. Unit Plant Process • 15. Vanning Process • 16. Ramp up impacts Systems: 1. eKanban (G) 2. Unit eKbn (G) 3. NA Parts (R) 4. TLMS-G (G) 5. ALC (G) 6. Unit ALC (G) 7. Overseas (R) 8. Prenotice (R) 9. OWK (R) 10. Calendar Master (R) Brainpower: 1. NAMC’s 2. PC/Logistics 3. BPSM4. IS 5. Purchasing 6. Cross Docks 7. LP’s 8. Sep. Centers *new obstacles for FY12 crisis G=global, R=regional

10. Daily Crisis Strategy (ex: Timelines, eKanban) • Automated processes on hold due to crisis activities • Example of morning activities: Daily Route Planning discussion with all parties Manufacturing Makes Adjustments Determine Daily Strategy with each NAMC Ex: BC, Rolling Buffer BP&SM verify Adjustments: -Action plan -Logistics data -etc BP&SM confirms activity plan IS releases for Manufacturing to check BP&SM confirms Mfg. readiness Manufacturing conducts order checks, etc BP&SM gives approval to execute daily plan

11. Results: • Actual production results = production plan. We executed accurately. • Manageable impacts at supplier operations. • Quickly recovered when parts became available. • Demonstrated North American self reliance.

12. Key Points: • People , People , People – teamwork is mandatory (too much detailed knowledge needed) • Clear communication to team members, suppliers and logistics • Dedication

13. Questions?