TOYOTA

Facilities

GROUP 3
JAINI SHAH -21
SUPRIYA JAISWAL- 22
JUGAL KAGTADA -23
KALPESH WANI -24
SAGAR KAMRANI- 25
KARAN SHAH - 26
PRIYANKA KHANDARE -27
RAVI KUPPILI- 28
MAHESH GANGURDE -29
MANAS SONAWANE- 30
UJWALA KULKARNI- 63
 INTRODUCTION
• Headquarters
• Toyota, Aichi, Japan.
• Kiichiro Toyoda.

• Entry to India
• In 1997 in a joint venture with the Kirloskar Group.

• Manufacturing Units
• Bidadi, Karnataka .
• On the outskirts of Bangalore.
Capacity planning: It is the process of establishing the
output rate that can be achieved at a facility.

Measuring Capacity Examples

Types of Output measures of
business capacity

Car Car per day

Manufacturing
Normal 800 units per day
conditions
Toyota 570 units per day
 Measuring Available Capacity
• Design capacity:
- Maximum output rate under ideal conditions
- Under normal circumstances, Toyota India has a production
capacity of 800 units per day.

• Effective capacity:
-Maximum output rate under normal (realistic) conditions
-Toyota's production capacity has on an average 570 units per day
FACILITY PLANNING

• The goal of facility planning is not only to

recognize opportunities for improving
efficiency but also to anticipate them.

• Goals:-
• To Maximize: - Operations’ efficiency,
flexibility and quality
• To Minimize: - Operating costs, Work in
process and the Project cost
 FACILITY PLANNING OBJECTIVES
1. Support the organization's mission through improved material
handling, materials control, and good housekeeping.
2. Effectively utilize people, equipment, space, and energy.
3. Minimize capital investment.
4. Be flexible and promote ease of maintenance.
5. Provide for employee safety and job satisfaction.
 PROXIMITY TO SOURCE OF SUPPLY

"We are looking at localization not only because of

Make in India initiative. Backward integration also
insulates from exchange rate fluctuations and makes
supply chain shorter"

TKM Senior Vice President (Sales and Service) Naveen

Soni
 COMMUNITY AND SITE CONSIDERATIONS

The Bidadi Industries Association

Toyota started its operations here in 1998 and is among the first to start operations. Currently around 114
companies, mainly manufacturing units, have become the members of this association. Bigger companies
include Toyota, Bosche and Coca Cola, while the remaining are medium and small scale operating into
food industry, auto component.
 PROXIMITY TO LABOR
Toyota's current plant at Bidadi, Karnataka is
spread across 850 acres and has a capacity of
110,000 vehicles per annum.

People from bidadi or nearby villages

automatically become a part of labor force
 PROXIMITY TO CUSTOMERS
Toyota Car Showrooms in Top Cities
City Number of
Showrooms
Ahmedabad 2
Bangalore 10
Chennai 8
Delhi 8
Gurgaon 4
Hyderabad 6
Kolkata 4
Lucknow 3
Mumbai 9
Noida 3
Patna 2
Pune 5
 FACTORS RELATED TO MARKET
• Proximity of the firm’s market
The plant should be close to the
market in order to reduce the
transportation charges which will indeed
increase the cost of the automobile.

• Size of market
Toyota targets the urban population so it has
more dealers in urban areas as compared to
rural.
FACTORS RELATED TO INFRASTRUCTURE
• Toyota Motor Corporation entered India in 1997
in a joint venture with the Kirloskar Group. Toyota
Motor Corporation (TMC) holds 89% of the share
and the remaining 11% is owned by Kirloskar
Group.

• TKMPL's current plant at Bidadi, Karnataka is

spread across 850 acres and has a capacity of
110,000 vehicles per annum. TKMPL's second
manufacturing plant on the outskirts of
Bengaluru, Karnataka has a capacity of 210,000
vehicles per annum. Total production capacity is
320,000 vehicles per annum.

• As of April 2019, it has more than 350

dealerships in 225 cities across India.
 FACTOR RATING METHOD
It is most popular technique because a wide variety of factor can be included in the analysis.

The process of selecting a new facility location involves a series of following steps:
1. Identify the important location factors (key success factors).
2. Rate each factor according to its relative importance.
3. Assign each location according to the merits of the location for each factor.
4. Calculate the rating for each location by multiplying factor assigned to each location with basic factors
considered.
5. Find the sum of product calculated for each factor and
6. Select best location having highest total score.

Suppose, Toyota was considering 3 alternative sites for its new facility locations:
1. Site A : Kolkata, West Bengal
2. Site B : Bidadi, Karnataka
3. Site C : Pune, Maharashtra
EXAMPLE:
Factors Weight Kolkata,WB Bidadi,KA Pune,MH
Sr. No.
(Total = 100) (Weight * Rating) (Weight * Rating) (Weight * Rating)

Close proximity to markets

1 5*2 = 10 5*4=20 5*3=15
5
Close proximity to raw materials
2 20*3= 60 20*4=80 20*2=40
20
Good transportation facilities
3 15*4 = 60 15*4=60 15*3=45
15
Availability of power supply
4 10*2=20 10*3=30 10*3=30
10
Gov. policies around tax rebate
5 15*3=45 15*3=45 15*2=30
15
Availability of unexperienced
6 & skilled labor 15*2=30 15*4=60 15*3=45
15
Availability of cheap land
7 20*3=60 20*4=80 20*2=40
20

Total Weighted Scores 285 375 245

From the above results, it is evident that the largest total weighted score is for Bidadi, KA
location.
Therefore, Bidadi, KA appears to be the best location for Toyota to set up a plant.
 Break Even Analysis
• Break-even analysis computes the amount of goods required to be sold to just cover costs
• Costs includes fixed and variable costs
• Formula: N=Fixed Cost/Contribution Margin

• Example
Company A has fixed cost = 30,000
Price per unit = 100
Variable cost per unit = 40
So, the Contribution margin is price per unit – Variable cost per unit = 100-40 = 60
Break Even point = 500
This shows that beyond 500 units the company A will be able to make profits.
Thank you!