Daily review of detailed planning crucial to Toyota

Wichien Emprasertsuk, senior vice president of the local unit of the Japanese giant auto-maker - which is taking over the world No-1 spot from General Motors - said that once the company's annual business goal was plotted, all teams had started looking at all possible tiny details.

How many cars to be produced and sold in the year to achieve the profit target? In each month, how many cars must be made and sold? On each day, how many? How many vehicles can dealers in a province sell in a month?

The intensive planning also takes into account factors to minimise costs, such as how successfully the "just-in-time" philosophy is in place to ensure the punctual delivery of parts, to ensure zero inventory costs.

Punctuality is key, as production involves parts from 150 suppliers in 10 provinces.

Shaping policy is Toyota's PDCA concept - planning, deployment, check and action.

"The most important is planning. If it is poorly designed, everything can go wrong," Wichien said.

While profit is the main goal, the profit forecast must be set carefully and in line with economic growth to ensure sustainability. Then management looks into resources.

On sales, once there is a target of how many vehicles are to be sold in a month, management looks deeper into the daily sales number, taking into account variables such as locations of dealers and seasonal factors. As the economy of each province and local people's incomes differ, Toyota plans in advance how many units dealers in each province should sell in the month. Production and logistics plans are set accordingly. The key performance indicators cover seven main areas: domestic sales/services, exports, production, employees, customers, society and profits. In each category, a number of tiny indicators are applied.

"At a global company, the more details we can get right, the greater the chance of success. Like a pyramid, once the base is large and strong, the pyramid can be built successfully and automatically. We even determine the volume of watts of power we need to manufacture a vehicle."

Wichien says the company evaluates performance daily. Based on real-time data, the head office in Bangkok and HQ in Nagoya know instantly which dealer is selling what vehicle. This allows the company to standardise its work process, leading to continuous improvement. Then, the knowledge is stored for all, to see how it can be applied and adapted for greater benefit.

"Thanks to very detailed planning, we achieve competitiveness. We have no defects and we don't need to work long hours, as short hours with continuous improvement is more important," he added.