Toyota Business Practices and AcademeIndustry Linkage: Supporting Education for Sustainable Development in Technical Vocational Education and

Training
Mr. Ronald N. Gaspar CSR Coordinating Manager and Education Sector Head Toyota Motor Philippines Foundation, Inc.

ABSTRACT
Toyotas Business Practices was born out of the challenges and experiences starting from the time of its founders until today. Its business practices are shared among its suppliers and dealers and to a great extent to its academic partners as part of its academe- industry linkage and corporate social responsibilities. With the introduction of Toyota Prius, the worlds first Hybrid car using gasoline- electric power in synergistic action, it paved the way for Toyota to craft its Earth Charter, Green Purchasing Guidelines as well as Green Dealership Program all focused on environmental mitigation and education. In the Philippines, Toyota Motor Philippines Corporation in coordination with Toyota Motor Philippines Foundation work hand in hand to share Toyotas business practices in its automotive business and to locally implement its environmental initiatives among its suppliers, dealers and academic partners. Is it sustainable? What are the benefits for its suppliers, for its dealers, for its community and academic partners? What are the challenges of implementing the program among its stakeholders and partners? This paper aims to present the local Toyota affiliates programs and its challenges and achievements in implementing a global program adjusted to fit the local setting.

INTRODUCTION

ince the company was founded in 1937, Toyota Motor Corporation and its subsidiaries have continuously strived to contribute to sustainable development of society through the manufacture and provision of high-quality innovative products and services. Through such continuous efforts, Toyota has formulated its own management philosophy, values and methodologies that have been passed down from generation to generation throughout the company and was collectively known as the Guiding Principles at Toyota which reflect its idea of Toyota would

like it to be. The guiding Principles at Toyota were summarized with the expectation that all Toyota Group companies and business partners would understand and share the fundamental management principles and contribute to society by referring to these principles.

GUIDING PRINCIPLES AT TOYOTA

1. Honor the Language and Spirit of the law of every nation and undertake open and fair corporate activities to be good corporate citizen of the world. 2. Respect the culture and customs of every nation and contribute to economic and social

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development through corporate activities in the communities. 3. Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities. 4. Create and develop advanced technologies and provide outstanding products and services that fulfil the needs of customers worldwide. 5. Foster a corporate culture that enhances individual creativity and teamwork value, while honouring mutual trust and respect between labor and management. 6. Pursue growth in harmony with the global community through innovative management. 7. Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships. (Adopted Jan. 1992, revised April 1997) As Toyotas operations become more global in scope, societys expectation of Toyotas contribution towards sustainable development has increased and the scope of such expectation has expanded. In response to this development, a pamphlet entitled Contribution towards Sustainable Development was made in 2005 to expound the Guiding Principles of Toyota from the perspective of Toyotas relationship with its stakeholders. Toyota expects its business partners to support the initiative and comply fully with all applicable laws and societal norms in countries where it operates and to practice management based on respect for people. Toyota has been very active in environmental preservation for many years and as it operation expands globally, it will need the cooperation of its suppliers and dealers to work hand in hand to resolve global environmental issues such as related to energy, climate change and management of manufacturing substances. Toyota Motor Philippines Corporation is one affiliate whose operation is guided by Toyota Management Principles. However, to continuously dominate the market while complying with environmental

requirements, TMP must harness the cooperation of its supplier chain, dealerships and academic and organizational partners to create a sustainable future for the Philippine Automotive Industry.

COMPANY PROFILE
Company Name: Toyota Corporation (TMPC) Motor Philippines

Date Incorporated: August 3, 1988 Location: Plant: Toyota Special Economic Zone, Santa Rosa City, Laguna, Philippines. Marketing Office: Makati City, Philippines Size of Toyota Special Economic Zone- 82 Hectares, Shareholders: Metrobank Trust and Company (Philippines) - 51% Share Toyota motor Corporation ( Japan) 34% Share Mitsui and Company, Ltd. ( Japan) 15% Share Number of Employees: 1,296 (as of August 2010), 900 of which are Manufacturing, Division. Production Capacity: 30,000 units/ year. CKD Models: Innova, Vios CBU Models: Camry, Altis, Fortuner, Hi-lux, Hi-ace, Avanza, Land Cruizer, Rav-4, Previa, Prius, Alphard Milestone Achievements: 600,000 units sold (including CBU) since 1989. 400,000 units produced since 1989 (as of March 2008). 8th Triple Crowns in a row- No.1 in Passenger Cars No.1 in Commercial Vehicles No. 1 in Total Sales
Figure 1: Toyota Market Share in Philippine Automotive Market
Consistent leader in the Philippine automotive industry

- CAMPI Report, December 2009

CAMPI- Chamber of Automotive Manufacturers of the Philippines

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Toyota Quality Awards (2000- 2010) Excellent Manufacturing Quality Award Worldwide Best Vios and Innova Region-wide One of Top Best Performing Toyota Manufacturing Plants Worldwide

Environmental Performance Monitoring

1. CO2 (Power, LPG, Gas) Emission Performance 2. Water Performance 3. Solid Waste Management Performance 4. Volatile Organic Compound Performance

SUSTAINABLE PLANT INITIATIVES Basis

Toyota Earth Charter 1. Contribution towards a prosperous 21st Century. Aim for high growth that is in harmony with the environment, and set as a challenge the achievement of zero emissions throughout all areas of business activities. 2. Pursuit of environmental technologies. Pursue all possible environmental technologies to enable the environment and economy to coexist harmoniously. 3. Voluntary actions. Develop a voluntary improvement plan, based on thorough preventive measures and compliance with laws, that addresses environmental issues on the global, national, and regional scales, and promote continuous implementation. 4. Work in cooperation with society. Build close and cooperative relationships with a wide range spectrum of individuals and organizations involved in environmental preservation including governments, local municipalities, related companies and industries. The Toyota Earth Charter formulated by Toyota Motor Corporation- Japan was translated by Toyota Motor Philippines into its own environmental Policy with acronym TREES. T- Team members and community awareness R- Regulatory and legislative compliance E- Ensure prevention of pollution E- Environmental objectives and target attainment S- Seek continuous improvement

Other initiatives
1. Use of Solar panel to light up team members gym and parking area. 2. Use of Compact Flourescent Lamps (CFL). 3. Water recycling. 4. Treatment of busted fluorescent lamps. 5. Use of Rapid composting technology to reuse organic was materials. 6. Waste segregation. 7. Sludge reduction through vermicomposting. 8. Propagation of plants at tree nursery and maintenance of forest. 9. Phytoremediation of indoor air pollutants by introduction of indoor plants for humidification, VOC removal and improve oxygen level inside manufacturing plant and offices.

GREEN PURCHASING GUIDELINES

The Green Purchasing Guidelines directs TMPs suppliers to undertake the following environmental initiatives: 1. Acquisition of ISO 14001 Certification. 2. Elimination of 4 Substance of Concern in all parts and components of vehicles. 3. Compliance with environmental laws and regulations. 4. Enhancement of environmental performance 5. Reduction of CO2 emissions and packaging and wrapping materials in logistics.

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Under these guidelines, Toyotas advocacy for suppliers to undertake environmental initiative has expanded to design, construction, cleaning, landscaping and logistics suppliers. It aims to gain suppliers full understanding of the guidelines and to engage them in environmental initiatives in accordance to Toyotas environmental activities. In all these activities, the importance of continuous education, training and awareness campaign for all the staff and leaders alike are important to make a sustainable campaign to internalize the importance of caring for the environment while operating a business. Here is the compliance result since the Green Purchasing Guidelines Program was introduced in 2007.
Figure. 2 Certication Status Local Parts & Material Suppliers
I. Compliance to Green Purchasing Guidelines
A. ISO14001 Certification Status
2. Compliance Status as of August 2010 a. Local Parts & Materials Suppliers

Figure 4. Suppliers compliance to CO2 emission reduction

I. Compliance to Green Purchasing Guidelines
B. Carbon Dioxide (CO2) Emission Reduction Activity
1. Compliance Status as of August 2010 a. CO2 Emission Reduction Requirements

Submitted Not Yet Submitted

11 (20%)
Suppliers

56

45 (80%)

CO2 Requirements: (1) Master Plan (2) Policy (3) Table of Organization (4) Activity Board

TMP / Procurement Department

Figure 5. Suppliers collective CO2 emission reduction in tons

I. Compliance to Green Purchasing Guidelines
B. Carbon Dioxide (CO2) Emission Reduction Activity
1. Compliance Status for 2009 to 1st Half of 2010 c. Submission of Concrete Activities to Reduce Consumption Result of CO2 Emission Reduction in Tons
2009

Certified
13 23%

1st half of 2010

2,166

3,036 2,778

1,486

Suppliers
Electricity LPG

56

On - Going

907 620 246 385 0 4

Diesel

Gasoline

Total

43 77%

TMP / Procurement Department

TMP / Procurement Department

Figure 6. Suppliers Independent or volunteer activities Supplier Environmental Initiatives

Suppliers Independent Initiatives
Use of Solar Power Community Clean Up Ambient Air Monitoring Installation of Bird Houses Donation to La Mesa Dam Project

Figure. 3 Certication Status for Gen. Contractor & Service Suppliers I. Compliance to Green Purchasing Guidelines
A. ISO14001 Certification Status
2. Compliance Status as of August 2010 b. General Contractors and Service Suppliers On Going Target is by 2010

11 28% 1 1 3% 1 3% 3% 1 3% 1 3% 4 11% 5 13%

Tree Planting Activities Environment Awareness Campaigns Recycling of Used Materials

6 16%

38 Activities

7 17%

7
Suppliers

(Batteries and Solvent)

River / Coastal Clean Up

Scrap and Waste Collection Program

7 100%
TMP / Procurement Department

TMP / Procurement Department

Toyota Motor Philippines network of suppliers have also been exporting to a number of Toyota manufacturing plants in countries such as Thailand, Malaysia, Indonesia, Taiwan, India, Venezuela, Brazil,

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Argentina, Australia, Kenya and Pakistan. To be able to be a global supplier you must pass global standards such are those that are embodied in Toyotas Green Purchasing Guidelines.

ACADEME- INDUSTRY LINKAGE PROGRAM Toyota Technical Education Program (T-TEP)

When Toyota Motor Philippines started its Completely Knock-down (CKD) production operation in the 1990s, Toyota Motor Corporation of Japan supported the recruitment of its manpower through the program called Toyota Technical Education Program (T-TEP). Toyota Technical Education Program is the basic human resources strategy of Toyota Human Resources System that promotes recruitment, training and certification and loyalty to acquire the best human resources in the automotive industry. T-TEP caters mainly on supporting talented young people through selected educational institution worldwide. In the Philippines, there are 4 T-TEP accredited institutions namely; Don Bosco Technical InstituteMakati (1990); Guzman College of Science and Technology (1991); Technological University of the Philippines- Manila (1992); College of Technological Sciences- Cebu (1993) and University of Mindanao (2008). Top 10% of the graduating class of each accredited T-TEP institutions undergo competitive examination given by TMP and top 30 examinees are then chosen to undergo Special Automotive Training Program an extensive 6-months training for future technicians at TMP Training Center. Those who successfully pass the final examination and completed the program are then distributed to dealers for onthe-job (OJT) training and eventual hiring of dealers.

GREEN DEALERSHIP
Green Dealership is both a desired status and a program (dealer environment program) for all Toyota Motor Philippines Corporation (TMP) dealerships. It aims to integrate all environmental management in the development of current and future TMP dealerships.

Current Programs
Fig 7: Dealer Compliance to the Dealer Environmental Program
Proponent
Dealer Environmental Risk Audit Program (DERAP) TMCs auditing system to ensure dealer environmental compliance
Dealer Environmental Management System (DEMS) a guide for the integration of environmental management in the development of TMPs current and future dealerships - DERAP + Solid Waste Management + SOP and Trainings + Monitoring + Self-audits and Reporting + Promotions Programs Substances of Environmental Concern (SOC) elimination (or reduction to certain levels) of Pb, Hg. Cr(VI) and Cd from vehicle partd Volatile Organic Compunds (VOC) control of VOC activities in manufacturing and dealership operations Standardization (ISO 14001 Certication) global certication on environmental management systems DFIC requirements ensuring dealership facilities are environmentally sound

Scope
Total

programs

TMP - Marketing

Total

Proponent

Scope

TMC

Products and accessories

TMC / Govt

Chemicals

TMP EMS / TMC DFIC

Total

Facilities

Nationwide Dealers ComplianceNationwide Dealers Compliance 1st Semester 2010

Toyota Automotive Education Program (TAEP)

Toyota Automotive Education Program (TAEP) is the technical program of Toyota Motor Philippines Foundation, Inc.(TMPF). It aims to complement, enhance and expand the program of T-TEP by accrediting other educational institutions recommended by Toyota dealers in their locality known for its quality graduates. TAEP has the following component:

22 out of 28 Dealers reached the 100% mark

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1. Donation of Equipment and Parts. Donation of locally fabricated engine training simulators, parts, visual aids, poster and signage to broaden learning and develop hands-on skills necessary to be globally-competitive technicians. 2. Establishment of Toyota Technology Center (TTC). This is an in-campus Toyota workshop and classroom area where all donated simulators, visual aids, tools and signage are located. The area mimics a dealer workshop and is used by all automotive students of the accredited institutions to learn Toyota engine technology. 3. Market-driven Scholarship Program. The aim of this program is to support the economicallydisadvantage youth to study at accredited institutions for free and is intended to be the future employees of the Toyota dealer network. During their studies, they are required to participate in Toyota Corporate Social Responsibility (CSR) activities such as coastal / river clean-ups, medical dental outreach programs and other activities that the dealers which partially sponsor his education may require. 4. Instructors Training and Immersion Program. Toyota invite instructors from accredited institutions to undergo training based on available program to keep them inform of the latest advancement of Toyota automotive technology. Likewise, instructors also immerse in Toyota culture and processes by touring its manufacturing plant and dealerships and by attending seminars on Toyota Production System, Toyota Way management principles, environmental management system among others. Toyota values education and training among its stakeholders and partners. 5. Professorial Chair Grants & Curriculum support. Toyota promotes within the ranks and so if there are supervisors lacking in its organization, it does not hire from outside the organization but promotes from the ranks of eligible team members. Toyota granted professorial chair to 2 institutions namely

College of Engineering, University of the Philippines-Diliman and College of Engineering, Mapua Institute of Technology to develop curriculum leading to Automotive Engineering. Other institution also upgraded their curriculum and applied them into accredited courses of Commission on Higher Education (CHED) that accredits students skills and experiences into academic units (through Expanded Tertiary Education Equivalency Accreditation) Program. In this way, those technicians who went to work early for Toyota can further advance professionally by applying to ETEEAP. In this way, Toyota technicians and even office team members will have a continuous education while being employed.

CONCLUSION
Toyotas successful model for sustainable development is anchored on its management principles, values and practices accumulated and improved over the years. To survive or thrive in business, your management principles, values and practices must be understandable, universal/ practical and replicable to all your stakeholders. Continuous education and training of Toyotas stakeholders such as its team members, suppliers, dealers and academic partners enhances communication and clear understanding of business goals. Understanding business requirements means Toyota can respond to market demand quicker, thus, it means continuous jobs and market dominance and profit. Technical Vocational Education and Training (TVET) promoters and the academe can learn from the business operation of Toyota by enjoining its stakeholder continuous education and training. TVET promoters must consider itself part of the supply chain, wherein, if the industry needs highlyskilled level technicians it must be able to supply the need of the industry, otherwise, there is no point of opening a technical school or a university wherein graduate cannot pass the industry requirements.

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REFERENCES
Toyota Technical Education Program Handbook, 1997 Sustainability Report, Toyota Motor Philippines Corporation, 2008 Green Purchasing Guidelines, Toyota Motor Philippines Corporation, 2007

TMAP-EM ASEAN Joint Meeting, Purchasing Engineering Department, TMAP-EM, 2010 Manufacturing Administration Division Environment Presentation, 2010.ppt Plant Tour Presentation, Organization Development, 2010.ppt Dealer Environment Presentation, DESH Section, Technical, CSO, 2010.ppt

BRIEF BIODATA
Mr. Ronald N. Gaspar is presently the Toyota Motor Philippines Foundations Head of Education Sector and Coordinating Officer in charge of social contribution of Toyota and has been in Toyota Corporation since 1990. He is the President Emeritus of the Philippine Association of Labor Management Councils, Inc. (PALMCO) which is composed of labor leaders and human resources managers aimed at improving the industrial relations of the Philippines to make it conductive to business. Mr. Gaspar has been into a number of advocacies and was invited to a number of national and international forum and presented country papers in the areas of Labor Management Relations (LMCs) through Asia-Pacific Economic Forum (APEC), Productivity and Quality (P&Q) and Corporate Social Responsibility (CSR) under Asian Productivity Organization (APO). (Email: ronald.gaspar@toyota.com.ph)

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