Life Cycle Management in Industry 42377

Group 1 Andreas Strjer Tynan Schmidt, s103423

Ebou Touray, s093515

Jlia Pladevall Viladecans, s136135

Laura Ramos Sancho, s131063

Marc Weissenbom, s131238

Melody Parsa, s040996

Date: 02/05/2014

nikiText BoxNext to your name and student number, indicate sections/pages which you provided - unless your group decided to assign same shares for each member.If nothing is indicated, we assume same shares for each group member.

nikiText Box FOR GENERAL INSPIRATION NOT FOR COPYING

2

Table of Contents 1. Introduction ................................................................................................................................................... 3

2. Stakeholders Analysis .................................................................................................................................... 3

3. Current LCM activities ................................................................................................................................... 5

4. Challenges and strategies .............................................................................................................................. 8

Contribution to a Low-Carbon Society .......................................................................................................... 8

Contribution to a Recycling-based society .................................................................................................... 8

Environmental Risk Reduction and society in harmony with nature society .............................................. 10

Promotion of Environmental Management ................................................................................................ 11

5. Key Performance Indicator (KPI) ................................................................................................................. 12

KPIs for Toyota dealers ............................................................................................................................... 12

Sales department: ................................................................................................................................... 13

Service department ................................................................................................................................. 13

Business management department ........................................................................................................ 13

6. Overall recommendations and suggested KPIs. ......................................................................................... 14

7. Conclusion ................................................................................................................................................... 15

8. Bibliography ................................................................................................................................................. 16

9. Appendix ..................................................................................................................................................... 17

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1. Introduction Toyota was founded in 1937 by Kiichiro Toyoda in Toyota, Japan. For decades, it has been one of the

industry leaders in efficiency and quality of general manufacturing with their TPS - Toyota Production

System - which inspired what later has become known as lean manufacturing. During the 70s and 80s,

they experienced a huge growth in the dominant American market due to their highly effective production

system and their less fuel consuming cars, which had become popular because of the oil crisis of 1973. This

development contributed to creating their identity of producing smaller, less fuel consuming cars.

Through their successful years, Toyota has managed to achieve incredible growth to become the 14th

largest company in terms of revenue in the world with more than 330,000 employees all over the globe.

This puts them in a dominant position, not only as a high grossing company, but by being the largest

manufacturing company in the world according to Fortune Global 500. This makes the company extremely

relevant for life-cycling management.

This report will be looking into the company from a life-cycle point of view to understand their current

situation with stakeholders and activities, while finding the challenges the company is currently facing and

furthermore adding recommendations for further action and KPIs to measure the success of these.

Global vision

Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most

responsible ways of moving people. Through Toyotas commitment to quality, constant innovation and

respect for the planet, Toyota aim to exceed expectations and be rewarded with a smile. The company will

meet its challenging goals by engaging the talent and passion of people, who believe there is always a

better way.

2. Stakeholders Analysis Toyota has many stakeholders in their value chain and these parties are crucial for their very existence.

Basically, Toyota has five main stakeholders, which are: customers, global society/local communities,

shareholders, business partners and employees.

In order to carry out a good analysis of Toyotas stakeholders and their relation with the company it is

useful to do a brief explanation of them:

Customers: Toyota is aware of the importance of having a good communication with its customers and

getting feedback from them, which is why they have a tradition known as Customer First, in order to live

up to their customers expectations. With the aim of putting it into practice, all activities through all the

product life cycle are oriented to the customers perspective. In the last couple of years, Toyota has not

been able to satisfy its customers needs, this is why the company is making a great deal of effort to

execute its old tradition.

Employees: Toyota has focus on human resource development, which is based on putting the Toyota Way

into practice. The Toyota Way is an overview of values and business methods that employees would have

to embrace for carrying out the Guiding Principle at Toyota in all their activities. The Toyota Way consists of

two main concepts: the first one is continuous improvement, which is divided in challenge, improvement

4

and Genchi Genbutsu (philosophy used to implement Customer First), and the second one is respect for

people, which has two sub-areas which are respect and teamwork. Toyota is working to develop human

resources by taking advantage of the bad times as a chance to learn, planning better for improvement and

investing on educational programs. Additionally, Toyota is making an effort to build an environment that

respects diversity of values, ideas and cultures.

Business partners: Toyota believes that it is important to work in cooperation with its suppliers, overseas

distributors, domestic dealers and other business partners. Regarding suppliers, in good and bad times

Toyota and its suppliers have been dealing together with the same issues, in other words, they have a close

relationship so that they can achieve higher customer satisfaction on every level, Emphasis on Quality.

Shareholder: one of Toyotas top management priorities is to benefit shareholders. Toyota struggles to

continue paying dividends and at the same time focusing on the business results in each term, investment

plans and cash reserves. Toyotas financial strategy can be simplified to the phrase "Accomplish Solid

Profitability, and Making Better Cars", with three main points: "Growth", "Efficiency" and "Stability". By

following these three main points, Toyota hopes that they can maintain a healthy and stable growth, which

not only provides them with more revenue, but also benefit the local and global community.

Global Society/Local communities: one of the bases of Toyota is: enriching lives of communities. Toyota's

CSR policy wants to get involved in as much as possible in the community, locally and globally. Both in

terms of getting involved themselves directly, but also by listening to the local community, for example if

they expand a plant, they will try not to bother the respective neighbors. Socially, economically and

environmentally, they organize many activities that benefit the community. As an example, in Japan they

have participated in rebuilding the community after the earthquake in 2011. Moreover, they have

organized reforesting activities. Globally, Toyota has helped victims of natural disasters in both Thailand

and the United States. Generally, the company invests a lot of money in society, not only because they

want to make a difference, but also because it is an advantage in itself.

Moreover, stakeholders can be classified in different groups: primary or secondary and internal or external,

depending on how important they are in the company and which position they have. The classifications can

be found in the following tables:

It is also interesting to classify the stakeholders depending on their interest and power.

5

As Toyota has a great interest in its stakeholders and emphasize on maintaining good communication and

cooperation with them, none of them can not be considered as least important. In the segment meet

their needs, on one hand there is the customers, who have a lot of influence on the company and it is

really important to meet their expectations and to get feedback with them (e.g. Customers First). On the

other hand, the authorities of each country are also situated in this segment because the existing

regulatory framework acts as an important driver for organizations to consider the impacts of their

operations and products. Whereas NGOs and community groups have a big interest in the company,

employees and shareholders have a key role in Toyota. To succeed in LCM, it needs a commitment from top

management and the active participation of key employees from relevant departments.

3. Current LCM activities Over the past years, Toyota has taken more responsibility for the environment and is making an effort

towards achieving sustainability by implementing activities in the sustainable main pillars: economic, social

and environmental. This section focuses on the initiatives and activities related to Toyotas vehicles and its

environmental, social and economical impact through all stages of the vehicle life cycle. Toyota has carried

out different Environmental Action Plans since 1994 with the aim of promoting eco-friendly activities. The

latest Initiative is the Toyota Global Vision which was announced in March 2011 and has a main focus on

sustainable growth. Toyota describes in its Sustainability Report (2013) a series of environmental initiatives

with the main focus on technological improvements and developments. The first point has a focus on

improving the usability of more environmentally friendly vehicles (electrical, bio-fuel, CNG, GTL, CTL and

hydrogen) by increasing the vehicle size and the driving distance. With this approach Toyota tries to gain

market share from the conventional vehicle market. Moreover, Toyota wants to increase the worldwide

sales of hybrid vehicles. Furthermore, the most technical advanced activity is definitely about the

development of the fuel-cell for vehicles.

6

Environmental Economic Social

R&D

Design

- First in the automotive industry to introduce ISO 14001 in its design and development division -Reducing the usage of oil resources: Ecological plastic and Bio-PET (plastics derived from plants) are used in interior surface areas of the cars instead of petroleum-based plastics

- Carrying out life cycle assessments with the companys environmental management system called EcoVAS

- Increase the average fuel efficiency by 25% for 2015 compared to 2005

- Higher investment in R&D to improve performance and efficiency at the site

- Implementation of more energy efficient plants than previous

- Dealers and suppliers work hard to sell as many vehicles as possible, employees try to reduce costs and even government is making an effort to stimulate car demand. The result is a constant improving in revenues.

- Expanding education programs at the R&D Learning Center into Mid-level Engineering: in order to increase human resource development

- Total Quality Management (TQM): an activity for employees about customer-first work practice, principles of quality control and actions to refine corporate strength

- Providing comfortable freedom of movement to all people: development and production of the assisted-mobility vehicle called Welcab for people with disabilities and the elderly

- Running so-called Eco-Schools environmental program: Toyota Motor Europe has participated in the development of one of the Eco-Schools programs called Environmental and Innovation Project

Procurement - Reduction of packaging and wrapping materials. e.g. slimmer bumper wrapping and wider use of returnable shipping containers

- Ensuring that 100% of energy purchased is from renewable sources.

- Promote and contribute for economic development by purchasing local suppliers

- Collaboration with suppliers: work closely with them in its manufacturing activities.

Production - Try to reduce water waste and use water effectively in the plants, especially in car assembly plants.

- Market expansion by making economic contributions to each nation and region (China, India and other emerging countries) in terms of local production and employment.

- Helping employees balance work with childcare

- Increment employment opportunities for disabled people

- Job placement program for over-sixties: re-employment program for retired professionals in order to help over-sixties to continue working (external/internal workplace)

7

Transportation

and sales

- Toyotas vehicles started being transported by ship reducing CO2 emissions during transportation and improving fuel efficiency

- Reduction of transportation distance of trucks by improving loading rates, consolidating and reviewing travel routes

- Sharing vehicle transportation with other companies

- Employment of larger containers and more efficient carrier vehicles improving logistics for completed vehicles

- Efforts in environmental activities leading also to greater financial benefits due to better scheduled departure times and a higher degree of capacity utilization. This ended in reduced transportation costs and therefore in a larger financial interest

- A better scheduled transportation system can be considered as a profit for the reduced delivery time for a vehicle (market advantage - time between customer order to delivery)

- A more efficient transport system leads to lower overall costs for the vehicle and in the end to lower price of sell for the customer

- Reduced pollutant and noise emissions to better utilized freight traffic and changing of transport systems from road to train or ship are an asset for the population in the environment of roads, plants and suppliers

Usage - Environment-conscious promotion, Eco-Driving. This system tells drivers when to change gear in order to save fuel and reduce environmental impact

- Better usable cars are a sales argument and therefore useful for increasing the amount of sold vehicles

- Customer assistance center (toll-free dialing, 24-hour catalog desk and 365-day operation), addressing recall-related inquires

- Safety Guide Book with information about safe vehicle use distributed to new vehicle customers

Recycling and

reuse

- Collection network to collect used batteries (90%)

- Advanced technology to bumpers recycling. Development of a recycled new material with end-of-life vehicles bumpers as the raw materials

- Adding dismantle marks in key points and instrumental panels have made easier to disassemble and reduce component removal time

- Supply of rebuilt parts and used parts

- Recycling and reusing of materials and resources are useful regarding to increasing prices for natural resources (nickel, aluminium, copper)

- Reuse of generated heat in the painting line for partly heating the assembly plant by cogenerated electric power

- Lower need for discovering and usage of new natural resources

- Lower emissions due to a lower energy consumption of recycled or reused materials and parts

- Decreased amount of waste for landfills and incineration plants leads to a better living environment for the society

Others - Rainforest restoration initiatives: tree-planting project

8

4. Challenges and strategies Regarding the desire of achieving a sustainable development, one part of the Toyota Global Vision is the

Fifth Environmental Action plan. This plan consists of four main environmental priorities that are currently

important issues and environmental concerns. The action plan ranges from 2012 to 2016 and includes

different activities which can be described as (1) contribution to a low-carbon society, (2) contribution to a

recycling-based society and (3) environmental protection and contribution to a harmony with nature

society. Main parts are about reduction of CO2 emissions, increasing the average fuel efficiency, reduction

of waste volume and the recycling of end-of-life vehicles. In some of these areas, Toyota deals with exact

numbers regarding their targets:

Contribution to a Low-Carbon Society

Target: By 2016 a 10% reduction of CO2 emissions by means of improving product efficiency compared to

FY2011 levels and an 18% reduction of CO2 emissions in manufacturing activities compared to FY2006.

Furthermore, by 2016 a 20% reduction of CO2 in logistics activities by means of improving transport

efficiency compared to FY1991.

Current situation: By the end of 2013 Toyota had already achieved a reduction of 10% in manufacturing

and production activities and a 15% reduction of CO2 in logistics activities, both of them compared to

FY1991.

Recommendations: Compared to other automobile companies, Toyota is considered to be a transparent

company in terms of clarity when it comes to the information they publish regarding their different goals

on CO2 emissions, which is a key point for carrying out a good analysis.

However, there are recommended ways in which Toyota might be able to better achieve their targets of

2016 and future challenges. With regards to CO2 emissions in logistics, the use of hydrogen fueled trucks for

transportation (suppliers and distributors) would mean an eradication of CO2 emissions in two stages of the

vehicles life cycle. At first it can mean an important investment, but in the future Toyota will get profit of it.

This improvement would imply talking with suppliers and distributors and make the right decision, either

hiring a special hydrogen logistic company or developing and introducing it into the market (Toyota

hydrogen fueled trucks). To get off to a good start, firstly they can hire a hydrogen logistic company while

developing its new Toyota hydrogen fueled truck.

On the other hand, it will be a good idea to make commercial employees use hybrid or electric cars in their

workday. As a result, Toyota will have a better company image and also their employees will contribute to

reduce the global warming.

Contribution to a Recycling-based society

Target: Encourage suppliers in order to establish a technology that enables 20% usage of ecological Plastic

and recycled resin materials in resin parts by 2016.

Current situation: The use of ecological plastic started in 2003 and Bio-PET in 2011 especially in interior

surface areas of the vehicles. Furthermore at the end of 2011, Toyota started using a new Ecological plastic

9

for components that were difficult to produce with previous ecological plastics, reaching now 80% of the

surface area.

Recommendations: Toyota is already on the right track as the company is using ecological plastics in

interior components. For this reason, it is difficult to make recommendations that will improve this target.

The main problem is that organic plastics are also thermoplastics, characterized by thermic and resistant

limitations in comparison with plastics made from thermosets. That is why the usage in areas with high

temperatures or impacts is complicated. One possible way to increase the percentage of ecological plastic

in Toyotas vehicles is producing some external components which do not require these high features.

Possibly a study for each component would be better in order to ensure that is accomplishing the required

characteristics. Some examples could be the rearview mirrors, the fuel cap, the spoilers and the car

handles.

Target: Dematerialization by taking action to the source improving by 2016 1.01 the environmental

efficiency compared to FY2013.

Current situation: By the end of 2013 the environmental efficiency had improved 1.13 in relation to 2006.

Recommendations: Regarding the dematerialization of materials, a solution for that could be to start

promoting and incentivizing smaller vehicles, which means a reduction in terms of weight and less material

required. With the aim of replacing the production of big vehicles by smaller ones, one suggestion would be

to invest in a good marketing campaign that starts a new trend within the population: The less heavy car

you have, the more eco-friendly you become. Moreover, another suggestion would be to be clearer when

they express their progress by including the units of their measures.

Target: Reduce the use of packaging and wrapping materials 1.09 in relation to FY2007. Promote reduction

activities that are the highest level in each country.

Current situation: 1.06 in relation to FY2007. Slimmer bumper wrapping and wider use of returnable

shipping containers are already implemented initiatives.

Recommendations: The improvements in packaging and wrapping materials in terms of optimizing the

volume and weight are well-advanced and in this context it is hard to come up with a better system.

However, there is a lack of information about the type of materials used in packaging and wrapping. In this

perspective, it will be interesting to start using recyclable and ecological materials. Besides, from working

closely with Toyotas suppliers and involving them in the sustainable development, Toyota could rewards

the suppliers with extra money if their packaging and wrapping materials are environmentally friendly. In

this case, supply chain management will be needed. Additionally, it is important to discuss that they do not

specify the units of their measures again and how they calculate them, which makes it confusing in terms of

interpreting the improvements.

Target: Promote and expand globally the development of recycling technologies and the effective use of

resources.

Current situation: Incorporating the concept of the 3Rs (Reduce, Reuse, Recycle).

10

Recommendations: On one hand, for continue promoting the importance of the 3Rs Toyota could organize

workshops, volunteer training programs and a good market strategy all over the world to raise the

awareness about this concept. On the other hand, another recommendation for Toyota would be to come

up with a Sustainable Reuse Plan. This reuse plan could be based on: a customer buys its new car and

Toyota offers the possibility of rebuying it after 7 years of usage in an affordable and feasible price. The

customer would be able to sell its old car easily after some years of using it and get some money back. At

the same time, Toyota will have their parts and materials back in order to reuse some of them. Due to that

plan, Toyota could invest in promoting design for disassembly so that they can get a benefit of it.

Furthermore, thanks to this reuse plan, Toyota would be considered as an eco-friendly and sustainable

company that takes care of the environment and its company image will be greatly improved. Besides, it

would become a way of attracting new customers interested in that promising offer.

Target: Sharing the companys sustainable and afforestation worldwide in other companies to conserve

and revive forests.

Current situation: They have carried out rainforest restoration initiatives in different regions of Asia such as

Philippines, Japan and China.

Recommendations: The approach of this initiative will be taken into account more seriously if the

governments and NGOs collaborate with the company. An idea could be a publicity campaign on TV about

afforestation with these entities as sponsors. Toyota would change its current image: some customers and

industrial segments consider that the Toyotas initiative of conserve forests is made just in order to appear

a green company, which is a current megatrend, instead of having a real interest in being sustainable.

Environmental Risk Reduction and society in harmony with nature society

Target: Reduce wastewater by 2016.

Current situation: Although they state that one of Toyotas goal is to reduce the amount of water wasted

during the vehicle manufacturing, they dont specify the way they are doing it. Additionally, they do not

have a quantified target so we cannot assess if they have been improving in terms of data and results.

Recommendations: It is recommended that they start quantifying their target for wastewater reduction

and set up a key indicator factor for quantifying it. It is tested that once you start to quantify and formalize

a goal, you become more efficient, in other words, a KPI can be used to measure the improvements in

these area.

Target: Improve their communication with the stakeholders (local residents, customers, suppliers,

distributors, etc.)

Current situation: Communication between Toyota and stakeholders exists at the moment but it is always

an important issue to be improved.

Recommendations: The creation of a social platform would be an innovative project which would enable a

networking improvement between Toyota and its stakeholders. On the one hand, customers satisfaction is

really important for any company and the idea would be that once a vehicle buyer gets a new car, the

11

company provides her/him an online account in which the customer can share opinions about the product

with other customers and receive recommendations from them and even from the company (particularly in

case the customer has any problems or needs technical assistance). Also with that project Toyota could be

updated knowing which are the most common problems in its products and improving efficiency solving

them. Moreover all organizations employees will have an account. The platform will be useful in terms of

the keeping the retailer updated about all improvements and innovative aspects happening at each

moment. As a result, the customer will receive more accurate information and better knowledge about the

vehicles features and improvements. Finally Toyota will ensure its employees awareness of the new

aspects carried out and shared on the platform by means of a training system. Employees have to fill a test

every month about the new initiatives and improvements of the last month. Stores with best scores will be

rewarded (e.g. increasing their salaries). Besides, the test results will be published in the platform and all

stores will have a position in the updated stores ranking.

On the other hand, suppliers communication and relationship could be improved by a better performance

and appearance in the fairs organized for automotive companies. This means a bigger marketing

investment to attract suppliers and with the aim of getting competitive advantage.

Promotion of Environmental Management

Target: Promote ECO-VAS (Eco Vehicle Assessment System), an environmental management system in

order to be more efficient.

Current situation: Toyota is already using ECO-VAS management system.

Recommendations: With the Eco-VAS system Toyota want to improve all vehicle-development processes

through to production, use and disposal. Here Toyota introduced a system which makes it possible to go

through the whole lifetime of vehicle parts. Actually, Toyota promotes the system in a way that they show-

up with specific parts where the whole life-cycle-process is visible for the customers. Based on this, possible

improvements are in the field of showing this for other non-specific parts and above more key-numbers

which benefit brings the Eco-VAS system to the whole LCA of a car.

Target: Incentivize the information flow within the different countries and regions:

Current situation: Toyota is getting a fast market expansion by making economic contributions to each

nation and region in terms of local production and employment. They have reached a total of 66 plants and

also around 170 distributors and 8000 dealers worldwide.

Recommendations: Toyota has a good local strategy and is investing in its expansion in a good way;

encouraging local employment and commences recruitment and education of local employees. However a

suggestion would be to use the platform proposed above to improve communication as an external

network between all Toyotas companies. Knowledge would be shared in the platform and the company

would have the same information and knowledge anywhere. That could be also a good way to identify in

which field are the weaknesses of the company to solve them faster.

12

5. Key Performance Indicator (KPI) Key performance indicators are means by which a company can measure its performance. Appropriate

selection of indicators that will be applied to measure the different performances are of great importance.

By having KPIs companies can figure out how close or far away they are from reaching their strategic goals.

Toyota has set a series of visions (Toyota global vision) that they want to attain in the future. These visions

are meant to improve different aspects of the Toyota Company but much focus is placed in the

environmental aspects of their cars in order to reduce their environmental impacts. Since visions are hard

to attain at one approach Toyota utilize the work break down structure by means of dividing a vision into

multiple attainable goals as seen in the picture below. Note: Not all of Toyotas goals are interdependent

therefore multiple goals can be pursued at once to realize the targeted vision.

These goals are defined and coupled with key performance indicators which Toyota call Toyota Visionary

Management Indices in order to measure progress made towards achieving the different goals and coming

a step closer toward realizing the Toyota vision. The table in the appendix shows an example of one of

Toyotas visions, which is divided into attainable goals along with their respective KPIs. It can be concluded

that Toyota has great visions for the future within sustainability as seen in the appendix, but do not provide

detailed information on how the mentioned KPIs are measured and the different steps taken to acquire

the needed data for its assessment. It can be recommended that Toyota should provide more specific

information that elaborates how data is collected and measured in order to assess progress and become

more credible.

KPIs for Toyota dealers

Toyota applies a series of different standardized and prescribed KPIs to measure effectiveness and

efficiency of business of their dealers. This is to ensure quality and be able to compare and evaluate dealers

globally. To facilitate this process Toyota dealers are divided into 5 sections for reference purposes and

they include: sales, service, parts, body-shop and business management departments. The following

section shows a series of formulas of standardized KPIs applied in some of the mentioned departments in

order to measure performance:

Goal 1 Goal 2 Goal 3 Realization of

Toyota vision

Toyota vision

defined

Toyota work break down structure of Visions

Assesment by repective KPIs

13

Sales department:

1. Profit made by sales of cars: measures the amount of profit made after several units of cars have

been sold.

2. Annualized sales per sales person: measures the average number of units sold by a sales person in

a year. This is in order to gather information about a sales teams performance and hence be able

to assess their strengths and weaknesses.

3. Stock turn: measures the number of times a dealers stock is turnover in a year i.e. the number of

times a dealer sells its entire inventory of cars.

Service department

1. Technical efficiency: measures the relationship between the numbers of hours sold and number of

hours the technicians has worked.

2. Labor Utilization: measures the productivity of workers.

Business management department

1. Absorption: measures the number of overheads covered by the profits generated by aftersales.

2. Return on Sales: measures the profit dealers have attained as a percentage of the products and

services that dealers have sold.

14

6. Overall recommendations and suggested KPIs. Toyota does well in life-cycle management. In fact, at first glance they do so well it is hard to see anywhere

they could improve. All domains are covered: socially, economically and environmentally. Their work is

well-documented and touches upon most theory on the subject. Especially in terms of reducing CO2-

emissions in the environmental area, by a lot of activities, measurements and well-defined KPIs.

However, there have been a few places to direct focus. Despite a long list of social activities, there is a lack

of documentation for its overall extent and an embodiment of their KPIs. This area is sensitive, since a

critical approach towards social charity activities is often considered disrespectful. Nonetheless, for a true

implementation of life cycle thinking, evaluating social activities and their extent is vital.

Environmentally, Toyota has many initiatives and activities besides only reduction of CO2-emission to be

first movers in the car industry and general manufacturing. However, a few areas within the environment

domain need to be documented and quantified further like water waste and definition of clear goals when

talking about harmony with nature and other soft defined goals.

A life cycle assessment is subjective to its assumptions and scope. This becomes apparent when Toyota

chooses their year of comparison for KPIs on a basis that is left unexplained despite a thorough research,

which makes sense. Choosing a year after some reduction is already done will take some of the glory off

their work, while choosing years further back than the beginning of a big initiative will make their work

seem less efficient than it is. However, the big range of starting points makes the overall evaluation harder,

especially in defining how far they are in the overall process of improving their performance in a life cycle

management.

Therefore, we can summarize with our recommendation for prioritizing action in Toyota:

1. Quantifying their target for water waste reduction and to set up a key indicator factor relative to

the current amount.

2. Embodiment of KPIs for the social aspect and documentation for its impact. Clear goals for what

they want to achieve.

3. Consistency in comparisons for evaluation of development to make transparency of overall life

cycle management progress better.

4. Documentation of KPI numbers all around, showing their actual calculation and specifying numbers

without units.

15

7. Conclusion During the present report an overview of how Toyota deals LCM-activities has been described. Toyota use

different tools and methodologies which are enabled in a management system. Furthermore, the corporate

group incorporates environmental, economic and social aspects of the vehicles that they are producing.

With the Global Vision Initiative, Toyota leads the strategic way for the whole company. With respect to all

the different stakeholders, Toyota implemented different LCM-activities in R&D design, procurement,

production, transportation and sales, usage and recycling and reuse compared to three relevant fields of

environmental, economic and social areas. The challenges of the Toyota group were described within the

target and the current situation, as well as recommendations were made as a part of the solution for

handling different strategies. Therefore, it is important to measure prosperousness in various fields. For

this reason Toyota uses KPIs for measuring the performances in all divisions. The overall dealing with KPIs

and numbers in the Toyota group is well performed, but sometimes the procedure is not clear, nor is the

source of which the numbers are generated from. Furthermore, the composition proceedings are

sometimes unreasonable and difficult to comprehend. This is seen particularly in the area of water savings

in plants and the solution ways for calculating KPIs.

The description of how Toyota measures the CO2 emissions of the entire vehicle fleet is well

documented, clear and understandable.

The overall impression is that Toyota uses often the right approaches and procedures, as far as we

can judge this from our outside observer perspective.

Toyota is on the right track, but only continuous improvement in a sustainable direction, supported

by a strong financial stability of the company leads to the right achievement.

16

8. Bibliography

- Stakeholders:

http://www.toyota.com.hk/inside_toyota/environment/report/10/relations_with_stakeholders.aspx

http://www.toyota-global.com/sustainability/csr_initiatives/stakeholders/shareholders/

- Social pillar:

http://www.toyota.com.hk/inside_toyota/environment/report/10/relations_with_stakeholders.aspx

http://www.toyota-global.com/sustainability/report/citizenship/pdf/citizenship.pdf

- Environmental pillar:

http://www.toyota-

global.com/sustainability/environmental_responsibility/establishing_a_low_carbon_society/reducing_co2_

emissions.html

http://www.toyota-global.com/sustainability/environmental_responsibility/data/

http://www.toyota-global.com/sustainability/report/sr/pdf/sr13_p06_p07.pdf

http://www.toyota-europe.com/Images/Final%202013%20Sustainability%20Report_tcm280-1271042.pdf

http://www.toyota-global.com/sustainability/report/sr/pdf/sustainability_report13_fe.pdf

http://www.toyota-industries.com/csr/environment/

- Toyota plans:

http://www.toyota-industries.com/csr/environment/management/plan.html

http://www.toyota-global.com/sustainability/environmental_responsibility/data/data19.html

http://www.toyota-global.com/sustainability/report/sr/pdf/sustainability_report13_fe.pdf

- Life Cycle Management - A Business Guide to Sustainability (UNEP)

-KPI

http://www.toyota-global.com/sustainability/csr_initiatives/kpi/

http://www.toyota-boshoku.com/global/about/social/report/index.html

http://www.sjm06.com/SJM%20ISSN1452-4864/6_1_2011_May_1-121/6_1_63-72.pdf

17

9. Appendix

Global Vision for those

we serve Goals Major activities in FY 2012 and results Major KPIs Status Major activities

FY 2013

Reduce environmental burdens through lifecycle by developing various eco-friendly vehicles and technologies and making them prevail.

Eco-Cars: Aim to improve global average fuel efficiency by 25% by FY2015 (compared with FY2005)

1. Annual global sales of hybrid vehicles top one million units

2. Developed a new hybrid

system exclusively for rear-wheel-drive vehicles that realizes both class leading levels of environmental performance and high system output

Average fuel efficiency (Japan, US, Europe) Sales of hybrid vehicles 1219 thousand vehicles (FY2012)

Go

al Ach

ieved

Further enhance performance and line-up of hybrid vehicles Further improve fuel efficiency of conventional engine vehicles

Environmental impact: Aim to reduce CO2 emissions from business activities by 29 % (compared to FY 2001; per unit produced globally)

Pomoted integrated energy management initiatives taking both energy consumption and supply into consideration (energy saving production technologies/ development and introduction of energy efficient equipment and installation of high efficiency in-house power generation equipment Toyota motor corporation (TMC))

Global CO2 emissions from energy source reduced by 34% (compared with FY2001, per unit produced)

Go

al Ach

ieved

Aim to achieve FY2013 targets to implement the 5

th Toyota

Environmental Action Plan