Toyota 2007 Annual Report Download - page 26

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24 ANNUAL REPORT 2007
Meeting Demand Fluctuations
Expanding Production and Demand
Fluctuation Risk:
Demand for Toyota vehicles is grow-
ing rapidly in many regions around the
world. We would lose sales opportuni-
ties if the production and supply capa-
bilities of our plants are unable to
keep up. However, only focusing capi-
tal investment on meeting demand in
each region increases the risk of declin-
ing business performance when
changes in demand leave surplus pro-
duction capacity. Therefore, Toyota
must anticipate and respond flexibly
and swiftly to changes in regional
demand to maintain international
competitiveness.
Offsetting Demand Fluctuations through
the “Global Link Production System”:
Toyota is introducing the “global link
production system” to enable flexible
responses to global demand shifts.
Simply put, plants with low operating
rates will take on part of the produc-
tion of plants with high operating rates.
We aim to raise our overall production
capacity utilization and production
capacity by establishing a mutually
supportive global system based on
monitoring demand trends and the
operating status of plants in regions
worldwide.
We are working to ensure that each
plant fully realizes its potential produc-
tion capacity and increases its flexibility
to enable diverse model mix production
through the “global link production
system.” This system will give us the
advantage of flexible production
capacity around the world and will
center on our core global models: the
Corolla, Camry, Yaris (Vitz in Japan),
and IMV* series.
Transforming the Role of Link
Production:
Link production is not new to Toyota.
Since Toyota’s early days, mother plants
in Japan have ensured initial quality and
stable supply by undertaking joint pro-
duction when new overseas plants start
At Toyota, we are building production networks that can respond flexibly to demand fluctuations
across global markets. We are also developing production engineering technologies that will lead to
groundbreaking improvements in production efficiency. In addition, we are moving forward with a
broad list of measures to strengthen the international competitiveness of production, including
stepping up the pace of personnel training to increase the self-reliance of overseas manufacturing
companies. In this section, we take a look at some of the specific challenges Toyota is tackling.
Part III: Innovation Up Close
An Example of a Global Link Production System: Link Production of the Corolla and Vitz/Yaris
Vitz/Yaris
Corolla
Vitz/Yaris Corolla
U.K. France Canada
NUMMI
Turkey
South Africa
Overseas
Stable
operation
Toyota Industries
Corporation
Kanto
Auto Works, Ltd.
Takaoka Plant
Corolla Vitz/Yaris As of June 2007
Overseas
Stable
operation
Japan
Absorbing vehicle
volume fluctuations
* IMV: An abbreviation of Innovative International
Multipurpose Vehicle, which refers to SUVs,
pickup trucks, and other multipurpose
vehicles that Toyota develops and pro-
duces overseas for markets worldwide.