3. Topic Outline
Introducing Toyota Australia
&
Her Supply Chain Management
By Cong Xue

4. History of Toyota Australia
• Toyota Motor Corporation Australia (TMCA) is a
subsidiary of Toyota Motor Corporation (TMC).
• Toyota Australia’s origins go back to 1958.
• The commercial vehicle business became
Thesis Toyota in 1971
• In 1988, Toyota’s local operations were unified
to form Toyota Motor Corporation Australia
• Toyota Australia currently build two models—the
Camry and Avalon series.

5. 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

6. 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.

7. Toyota Australia’s supply network
The basic of Toyota Australia’s supply
network:
– Supplier Association
– Effect of ―knowledge sharing network‖ on
supply chain coordination
– Upstream and downstream entities

8. Suppliers Association
• The key to Toyota’s 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.

9. 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.

10. The Upstream problems
After a series of research, few critical
factors were identified:
– Bundled outsourcing
– Logistic challenge
– Import of vehicle components

11. 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.

12. 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.

13. 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.

14. 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

15. 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

16. 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

17. Topic Outline
Toyota’s Australia
&
Her Current IT Setup
By Simon Chew

18. Topic Outline
IT Solution for
Toyota Motor Corporation
(TMC)

19. IT Solution for TMC
• Enterprise Resource Planning System
(ERP)
• E-Marketplace
• TradeMatrix system

20. IT Solution for TMC
Enterprise Resource Planning
System (ERP)

21. Enterprise Resource Planning System
Why ERP?

22. 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.

23. 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

24. IT Solution for TMC
E-Marketplace

25. 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

26. IT Solution for TMC
TradeMatrix system

27. TradeMatrix system
• Initiative with i2 Technologies Inc
• Automates with equipment manufacturer
and suppliers in terms of :
– site’s inventory management
– warehousing
– Logistic and shipping

28. Topic Outline
IT Solution for
Toyota Motor Corporation
Australia
(TMCA)

29. 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)

30. IT Solution for TMCA
Main SAP Automotive Suit ERP
System

31. 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

32. IT Solution for TMCA
BEA Web-logic Integration 8.1

33. 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

34. 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

35. BEA Web-logic Integration 8.1
Customised BEA
Application

36. BEA Web-logic Integration 8.1
Financial management functions

37. IT Solution for TMCA
SAP vs BEA

38. SAP vs BEA
International
collaboration
Raw Material
Suppliers
End Customer
SAP/BEA Dealers
1st Tier/ 2nd Tier
Suppliers
Manufacturing Warehouse/
Plants Parts Centers

39. IT Solution for TMCA
Electronic “Kanban”-Card
System

40. 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

41. Electronic “Kanban”-Card System
“Kanban”= Card (Japanese)

42. Electronic “Kanban”-Card System
PARTS TOYOTA
S UPPLIER (TMCA)
Ma te ri a l Re qu i re m e n ts Fo rca s t
O rde rs
Pl a n n i n g ANS I X1 2 8 3 0 Pl a n n i n g
Fo re ca s ts
Ka n ba n s
De l i ve ry Do ck e t Ka n ba n
S o rti n g Pro du cti o n
Li n e
De s pa tch i n g G o o ds
Ka n ba n s
De l i ve ry Do ck e t Re ce i vi n g
Acco u n ts Re m i tta n ce Advi ce Acco u n ts
Re ce i va bl e EDIFAC T REMADV Pa y a bl e
EFT EFT
BANKING
S YS TEM

43. IT Solution for TMCA
Participant of iStarXchange

44. 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

45. IT Solution for TMCA
Australian Automotive Network
eXchange (AANX)

46. 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

47. 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

48. 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

49. Australian Automotive Network eXchange
Software
Gateway
Router Dialup
trading
Trading
Partner
Partner
Permanent
Connection IBM Laptop
Firewall Hardware
Compatible Computer
Gateway
Modem
Modem
Equant Connect
Exchange
Point
Permanent
Connection
AANXO
Monitor
CASP Trading
Keytrust Partner
Router Hardware
Community
Firewall
Gateway
Directory &
Authentication
AANX Framework

50. IT Solution for TMCA
Problem Statement

51. 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

52. IT Solution for TMCA
Lack of alternatives in the domestic
supplier base and risk of currency
exposure

53. IT Solution for TMCA
Lack of alternatives in the domestic supplier
base and risk of currency exposure
• TMCA’s 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 TMCA’s 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

54. IT Solution for TMCA
Problems arising in linear
supply chain

55. 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 TMCA’s involvement
with the AANX network
• Escalate problems with ongoing redundant
supplier delivery expenses

56. IT Solution for TMCA
Over-reliance on forecast planning for
production

57. IT Solution for TMCA
Over-reliance on forecast
planning for production
PARTS TOYOTA
S UPPLIER (TMCA)
Mate ri al Re qu i re m e n ts Forcast
O rde rs
Pl an n i n g ANS I X12 830 Pl an n i n g
Fore casts
Kan ban s
De l i ve ry Dock e t Kan ban
S orti n g Produ cti on
Li n e
De spatch i n g Goods
Kan ban s
De l i ve ry Dock e t Re ce i vi n g
Accou n ts Re m i ttan ce Advi ce Accou n ts
Re ce i vabl e EDIFAC T REMADV Payabl e
EFT EFT
BANKING
S YS TEM

58. IT Solution for TMCA
Lack of Vertical industrial relations
environment

59. 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

60. IT Solution for TMCA
Business Goals

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

62. IT Solution for TMCA
Solutions Overview

63. 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.

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

65. 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

66. Supplier Website

67. 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 TMCA’s supply base.

68. 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.

69. Supplier Website
Figure 6. Access Flow From Toyota
Australia Suppliers web site

70. Supplier Website
Reasoning behind Goal 1 – The Business Needs
• Many of TMCA’s 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 supplier’s 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.

71. Supplier Website
• Web site functions
– Potential suppliers will be able to acquire information on the requirements of
becoming part of TMCA’s supplier network
• Potential suppliers need only to download/complete an online form
to join the network
• Information such as
– Supplier’s guide
– Community activities; and
– Any core information about TMCA’s current supplier’s 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 TMCA’s
overall supply chain process using this proposed
collaborative web site.

72. Solution 2
An agent-based e-marketplace initiative

73. Solution Description
• Goal 2 – Provide initiatives for a non-linear,
hub-based supply chain system
SOLUTION: Agent-Oriented Domestic e-
Marketplace

74. Agent Oriented Domestic Marketplace
Figure 7: Logical concept of the
Domestic e-Marketplace

75. 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

76. 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.

77. 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.

78. 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.

79. Agent Oriented Domestic Marketplace
Integration with existing systems (contd.)
Figure 8: Logical concept of system Integration.

80. 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

81. Agent Oriented Domestic Marketplace
Figure 9: The architecture of the e-Auction within the proposed e-Marketplace

82. 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

83. 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

84. Agent Oriented Domestic Marketplace
Reasoning behind Goal 2 – The Business Needs
• The acquisition process of parts, materials and supplies from
TMCA’s 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.

85. Topic Outline
Solution 3
Real Time Inventory Tracking Module
By Nurhazman Abdul Aziz

86. 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

87. 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.

88. 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.

89. Graphical Overview

90. 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

91. Details of the Desired Agents to be work as
Forecast Agent
• enables suppliers to rapidly align demand and supply in the mid-to-long-
term 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.

92. Details of the Desired Agents to be work as
Order Agent
• enables suppliers to manage and track the entire purchase order lifecycle
through TMCA’s 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.

93. 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.

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

95. 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.

96. 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.

97. 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
manufacturer’s 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.

98. 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

99. 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.

100. 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.

101. 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)

102. 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.

103. 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 e-
marketplace.
• Together with the shipping information provided by the freight companies,
the system will conduct an optimization searching process based on
manufacturer’s 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.

104. Integrating the four solutions in a big solutions

105. 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.

106. Topic Outline
Financial Analysis
By Loh How Whay

107. Financial Analysis
• Increased ROI on Existing System
– Toyota’s WebLogic platform
– WebLogic development environment is built
on the standards-based Java 2 Enterprise
Edition (J2EE) platform

108. 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

109. 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 Development Costs Graph
Support Staff $50,000.00
Total $1,035,000.00

110. Financial Analysis
SUMMARY OF ANNUAL OPERATING COSTS
Recurring expense Amount
Connectivity $50,000.00
Equipment/installation $20,000.00
Programming support $80,000.00
Annual Operating Costs
Training & ongoing assistance $120,000.00
Graph
Advertising $50,000.00
Total recuring costs $320,000.00

111. 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 Sample Benefits Graph
cars/parts $1,300,000.00
Other savings $100,000.00
Total annual benefits $2,150,000.00

112. Topic Outline
Net Present Value
&
Return of Investment

113. NPV & ROI

114. Topic Outline
Financial Challenge

115. Financial Challenge
• PROJECT COST
– Professional constraint programmers + months of development time
– Significant investment amount from TMCA.
• THE NEED TO TRAIN INTERNAL AND EXTERNAL USERS
– 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
• Crucial to ensure project success.
• THE NEED TO RETAIN SYSTEM EXPERTS
– 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.

116. Topic Outline
Organisational Challenge

117. 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

118. 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

119. Financial Feasibility
• 6 months to develop and deploy
→ Complexity
• Benefits
– Shipping cost reduction;
– Higher percentage of parts localization;
– Increased profitability;
– increased efficiency;
– etc.

120. Topic Seminar
Cost Benefit Analysis

121. Cost
Categories of Cost Significant Major Minor
Development/maintenance costs X
Getting existing suppliers to use the system X
Reduction of shipping cost X
Attracting new suppliers X
Disruptions to staff X
Additional staff to handle the system X
Threat of competitors taking advantage of similar technology and X
achieving similar efficiency improvements.

122. Benefits
Categories of Benefits Significant Major Minor
Increased localization of parts X
Expanded sales and customer base X
Efficiency and flexibility in dealing with suppliers. X
Gaining experience that would assist with future e-commerce ventures. X
Increasing the business’ competitive advantage X
Suppliers remain loyal due the range of services offered X

123. 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

124. 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.

125. Q & A Session