Toyota 2015 Annual Report Download - page 53

the global distribution system aims at implementing parts procurement that meets changes in vehicle production
in a timely manner. These varying efforts, combined together, have led to maximized customer satisfaction, as
well as to building a good working relationship with Toyota’s suppliers.
Toyota aims to share information and collaborate among the procurement divisions in each of the regions
throughout the world in order to procure parts and materials from the most competitive suppliers among Toyota
factories located in various areas worldwide. At the same time, Toyota carries out streamlining efforts
undertaken together with suppliers in each country in order to achieve sustainable growth. In particular, Toyota
has been working on a cost reduction measure referred to as RR-CI activities. RR-CI activities aim to improve
competitive power through thorough localization, sharing parts and components and manufacturing reforms
together with producing products matching customers’ needs in each region and vehicle category. Toyota is
advancing RR-CI activities in conjunction with the TNGA. Urgent VA (value analysis) Activities began in fiscal
2008 and developed into All-Toyota VA Activities at the beginning of fiscal 2010 as part of Toyota’s ongoing
unified cost reduction effort with suppliers for the various types of vehicles already on sale. In addition, Toyota
has been working on the TNGA to achieve sweeping advances in basic performance and product appeal of parts
and units as well as seeking cost reductions by sharing more parts and implementing manufacturing reforms.
In fiscal 2016, market prices of raw materials such as steel generally decreased in comparison to the prior
fiscal year due in part to decreased demand in China. The direction of prices is still unforeseeable. Toyota is
continually promoting cost reduction efforts, such as reducing the amount of raw materials it uses.
Toyota’s ability to continue to obtain supplies in an efficient manner is subject to a number of factors, some
of which are not in Toyota’s control. These factors include the ability of its suppliers to provide a continued
source of supplies and the effect on Toyota of competition by other users in obtaining the supplies.
Intellectual Property
Toyota holds numerous Japanese and foreign patents, trademarks, design patents and some utility model
registrations. It also has a number of applications pending for Japanese and foreign patents. While Toyota
considers all of its intellectual property to be important, it does not consider any one or group of patents,
trademarks, design patents or utility model registrations to be so important that their expiration or termination
would materially affect Toyota’s business.
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