How does Toyota Textile achieve business objectives of CSV?


As a traditional manufacturing enterprise in Japan, Toyota Textile has experienced great changes in industry, products, technology, region and personnel in its development process of more than 100 years, from its main business of textile industry in the initial stage to automobile interior. From small workshops to production factories all over the world, the number of employees from dozens to up to 50,000. Up to now, Toyota Textile has established responsible economic growth, fair social progress and effective environmental protection as the "only way" to realize corporate economic value, social value and environmental value by summarizing the experience and perception acquired in the process of upholding the concept of "sustainable development", and has constructed a new blueprint for sustainable development from these three aspects.

As a result, Dr. Zhuang Zhiqiang, director and executive vice president of Toyota Textile (China) Co., LTD., accepted an exclusive interview with Autoscope. He said that in this process, Toyota Textile will "never forget the essence of product manufacturing and challenge the new era of mobile travel".

Director and Executive Vice President of Toyota Textile (China) Co., LTD

Dr John Chong

Specialize in product fundamentals

Looking back on the development axis of Toyota Textile in the past, "we have indeed experienced the pain of transforming into the auto parts manufacturing industry due to the decline of the global textile industry, and also felt the confusion of not being able to clear the development direction in the process of rapid economic development," Zhuang Zhiqiang said frankly: "But what has kept Toyota Textiles going for 100 years has not changed. Focusing on manufacturing and implementing the 'Toyota Way of production' in the traditional areas of automotive seats and interiors has allowed us to gain industry recognition in terms of product development, production quality and delivery management."

Today, Toyota Textile not only contributes to the development of Toyota Motor in China, but also expands the circle of friends by virtue of its product advantages to provide high-quality first-class products to new customers such as SAIC GM, BMW, Mercedes-Benz, Hongqi and Chinese Express. "In the industry, we have established an image as a professional automotive interior parts company, which has laid a solid foundation for our development in China."

In the face of the new trend of mobile travel under the background of electrification and intelligence, Toyota Textile is also advancing with The Times, committed to exploring emerging technologies and product innovation. "In recent years, through the establishment of 'new Value Creation Center' and 'car space Development center', we focus on the systematic research and development in the field of intelligent cockpit, and further put forward the clear goal of becoming the 'pioneer of interior space', and launched MX series of intelligent cockpit products. We hope to bring MX series products to the market as soon as possible, and become a company that truly leads the development trend of the smart cabin industry, positioning ourselves in the era of once-in-a-century great changes, and achieving greater development." Mr Zhuang said.

This also leads to the concept of product creation recognized by Toyota Textile. Zhuang Zhiqiang to "Auto" introduction: "Only truly meet the needs of users, products can be called valuable products. User needs are diverse, changeable and easily influenced by the environment, so only by improving the adaptability and humanization of products can we ensure that the 'economic value' of products can be created." He also said that this creative concept has become a driving force for Toyota Textiles to continue to grow.

At the same time, in addition to meeting the diverse needs of users as an important strategic direction of the enterprise, Toyota Textiles also believes that facing the future automobile society with more mature electric and intelligent development after 2030, the way of travel will also undergo fundamental changes. Technological leaps and advances in artificial intelligence will also lead to more possibilities for smart cockpit products and web-based application services. "Toyota Textile, as the pioneer of car room space, will develop and manufacture more comfortable and convenient interior space products for users. In the future, with the further development of the Internet of Everything V2X, mobile mobility service vehicles using intelligent cabins will be able to connect with drone delivery services and other services to more accurately meet users' needs and bring more travel fun to users' mobile life." He also believes in the rise of new forms of consumption based on the sharing economy rather than monopolizing goods. "We can expect that people will realize the optimal configuration of shared services through AI matching, while the concept of commodity ownership will gradually fade, and users will pay more attention to the expansion of experience and content services."

Based on the above ideas, Toyota Textile integrates internal and external resources, and has developed a new product "Intelligent cabin MX221". It is said that the conceptual theme of MX221 is "multifunctionality", focusing on the two sub-concepts of "diversity" and "multifunctionality". "It's designed for all types of consumers, from millennials and baby boomers to wheelchair users with limited mobility, and we cater to all types of users by offering different configurations and features." To provide a better travel experience, the MX221 smart cabin is equipped with six advanced systems comprising more than 50 innovative technologies and products. In terms of space service system, this product is equipped with MXPass, MXPlus, MXPrime, MXAccess and other four spatial combination service modes, so as to provide differentiated travel solutions from simple and convenient to business intelligence for the diversified needs of users in different application scenarios. It is worth noting that the product also emphasizes its "sustainable value" by further increasing the use of environmentally friendly materials to reduce its carbon footprint: the interior is made of eco-friendly nanocellulose and linen composite panels, and the seats are based on a system of quickly replaceable modules that can be adjusted according to the number of passengers. At the same time, high performance materials are used to improve the efficiency of thermal management and reduce heat loss.

On the other hand, Toyota Textiles also believes that in addition to the needs of end users, smart cabin products also need to ensure better value services for OEM customers and ride-sharing service providers. "In the latter case, we can only create mutually beneficial 'economic value' if we help ride-sharing providers to improve their competitiveness by providing efficient operations and differentiated value," explains Mr Chong. "New differentiated values include: superior ride experience, trend-friendly design, sophisticated functionality and better workmanship." In order to achieve the product quality required by these value standards, Toyota Textile is putting forward the requirements of comprehensive product value management, from the product painting, cost, parts procurement, production and manufacturing to quality management, "no matter how far the development of new technology, these most basic elements should always be improved."

Join hands with partners for mutual Benefit

The balance and interaction between corporate social responsibility and business value has long been a classic proposition in the field of management. In the book Modern Corporation and Private Property co-authored by American jurist Berle and economist Means, the following views have been clearly expressed: Corporations should pursue not only the interests of shareholders, but also the interests of employees, partners, consumers and other groups and individuals. This view coincides with Toyota Textile's current emphasis on the "benefit" development scene.

At present, there are more than 350 local enterprises in China's core tier 1 suppliers alone. "It is well known that Toyota companies attach great importance to comprehensive capabilities such as technology, product quality and guaranteed delivery cycle when selecting suppliers, and will concentrate some suppliers for long-term close cooperation. And as we work with our supplier partners, these 'sustainable partnerships' are critical to making really good products."

According to Zhuang Zhiqiang, Toyota's production mode cannot give full play to its power without the participation of suppliers, and the competitiveness of Toyota Textile comes from the competitiveness of its supply chain partners. Therefore, Toyota Textile has long insisted on working with suppliers to improve the production, technology and supply links. "Especially in the context of the new normal of the epidemic, the competition between enterprises is no longer a single fight, but requires the full cooperation of the upstream and downstream enterprises of the whole supply chain to achieve an ideal balance point in terms of cost, quality and delivery timeliness."

In the post-epidemic era, supplier partners are also facing the pressure of business operation, supply chain, orders and other aspects. How to help core supplier partners tide over the difficulties is also what Toyota Textile has been thinking about and working hard. "We have a 'co-existence and co-prosperity' relationship with our long-term suppliers, especially during the uncertainty of the 'chain break crisis', we always maintain information exchange with suppliers, and provide support for the resumption of production at the supply end, as well as the smooth flow of parts distribution and transportation channels."

Of course, after the test of supply chain rupture occurred, Toyota Textile also reflected on and adjusted its operation and management mode as well as its cooperation with suppliers. "We do hear questions about the concept of 'JIT' in Toyota's approach to production." Zhuang Zhiqiang admitted. JIT is to keep the synchronization of logistics and information flow in production, to achieve the right amount of materials, at the right time to arrive at the right process, so as to ensure the right amount of production products. Over the past decades, JIT has fundamentally achieved the effect of reducing inventory, eliminating waiting time for materials, reducing costs, and improving production efficiency with one stone, which has become a beneficial solution for enterprises. Because of this, the production mode of Toyota has become a "Bible" for manufacturing enterprises to learn, and is highly sought after and imitated.

"However, JIT is not equal to zero inventory, but to keep inventory of a certain variable. Therefore, accurate adjustment of inventory variables is the key to JIT. We are also seeing the pandemic as a powerful external force that is stimulating the extension and reshaping of JIT production models." On the supply side, Toyota reduces "variables" by designing supply and demand processes with customers and connecting information flows to improve the accuracy of order supply and supply time as much as possible, he said. On the supply side, the company is working more closely with suppliers to help them build solutions to deal with variables. "These changes will help improve the resilience of Toyota's textile supply chain and strengthen sustainable partnerships with our suppliers."

"Carbon reduction" will follow in the long run

As early as 2016, Toyota Textiles released the 2050 Environmental Vision, which sets out six major challenges for Toyota Textiles in the world, starting from four social issues such as coping with climate change, natural resource depletion, water shortage and biodiversity crisis. It includes: a challenge to zero carbon dioxide emissions, a challenge to minimize the use of natural resources, a challenge to zero carbon dioxide emissions in the life cycle of products, a challenge to minimize waste, a challenge to recycling water in the production process to achieve zero waste water emissions, and a challenge to plant 1.32 million trees.

In terms of product development and technology, Toyota Textile hopes to achieve zero CO2 emission in the whole life cycle of products through innovative production technology, research and development of new products and material replacement technology. In addition to the above-mentioned flax fiber composite board used in the MX221 intelligent cabin product, Toyota Textiles is expanding the use of "natural plant materials", gradually applying plant materials to the mass production of more automotive parts, to achieve the ultimate goal of interior materials application, that is, 100% natural plant materials. In addition, in order to cope with the future trend of electrification, Toyota Textiles vigorously promotes the development of parts and components used in fuel cells, electric vehicle motor rotor, lithium ion battery, electric vehicle filters and other parts and products, so as to provide more energy-saving and lightweight product solutions for customers of new energy vehicles.

The company's plans to "cut carbon" at the manufacturing level are even more obvious. "We will reduce the use of electricity from fossil fuels and reduce carbon emissions within our manufacturing facilities through innovation in manufacturing technology and the introduction of carbon dioxide recovery and conversion units and distributed solar photovoltaics. At the same time, the company will thoroughly adopt the Toyota production method and the "Toyota Textile Energy Saving and Emission Reduction 40 activities" to improve equipment operation efficiency, reduce energy use and improve energy efficiency. In recent years, combined with a variety of improvement activities, we plan to reduce greenhouse gas emission levels at the manufacturing end by 55 percent." In addition, in the field of logistics and transportation, Toyota Textile is planning to work with its suppliers to adopt more clean energy logistics vehicles, improve load rates, optimize transportation routes and accelerate digital management process, so as to achieve simultaneous energy conservation and emission reduction in upstream and downstream areas.

At the social level, Toyota Textile practices the concept of green environmental protection, and emphasizes the "common benefit heart" to do "public welfare". "Being a member of the local community and a good corporate citizen has always been an important part of the basic values of Toyota Textile company. Over the past 10 years, we have adhered to the policy of practicing public welfare activities." In particular, with the support of the China Green Foundation, the company's "Fengfang Oasis" charity tree planting activity has developed into one of the representative brand activities of corporate green public welfare activities.

"Over the past ten years, we have always been adhering to the purpose of continuous persistence, practice, full participation and expanding social influence. Representatives of Toyota Textile headquarters, representatives of various enterprises in China, as well as the government, industry associations and suppliers have participated in this activity, which has formed a brand activity with broad social influence." It is said that the tree planting activities carried out near the Tengger Desert in Alxa, Inner Mongolia have been continued so far, and the survival rate of the trees is more than 80%. It covers an area of about 920,000 square meters. "This campaign will continue to help us achieve the goals outlined in our Environmental Vision for 2050."

At the same time, in addition to leading Toyota Textile China enterprises to donate tree planting funds and their representatives to directly participate in planting activities, the company also insisted on sharing ecological and environmental protection concepts with all stakeholders, including customers, partners, employees and employees' families, and spread the importance of tree planting activities to combat desertification. "Toyota Textiles always believes that the power of a person or a company is limited, not only to 'do it yourself', but also to gain recognition and positive response from more partners. We hope that if conditions permit, more employees and partners can experience the hardships of planting trees in the desert, so as to pay more attention to and create 'environmental value'. The pursuit of Toyota textile is not a temporary honor, but to achieve the green and sustainable development of the earth's environment, only in this way, the enterprise has a sustainable development of the soil."

From focusing on products to create economic value, working together with partners to "benefit" social value, to practicing green concept and continuing to "reduce carbon", Toyota Textiles is making great strides on the road of sustainable development. "At a time of concentrated change in the automotive industry, Toyota Textiles is not at ease," says Mr Zhuang. In the long run, it is necessary to improve the social value while improving the economic value, and truly fulfill the social responsibility of enterprises. Through sustainable development, we will provide diversified value and expand our business scope to strengthen our management foundation and corporate competitiveness. He also believes that as the economic value of the company increases, it will continue to strengthen the reinvestment for the future development, which will lead to a virtuous circle of true CSV (create shared value) management.

Note: This article first appeared in Autograph magazine 2022 11