Toyota to start eKanban to raise logistical efficiency

The company currently practices what it calls the Toyota Production System, which ensures a smooth inflow of components with minimal inventory.

The Kanban system ensures just-in-time arrival of goods and is already in practice for Toyota's suppliers in Bangalore and Chennai.

Within the next 12 months, the company intends extend the same practice to its suppliers in Delhi and Pune by implementing eKanban.

So far, the Kanban method for suppliers in Bangalore and Chennai has proven effective to the extent that one truck arrives with supplies in every 4 hours.

Meanwhile, supplies from Delhi take 5 days to reach the Bangalore plant. Toyota has a safety stock inventory for 16 hours (or 1 day).

With the implementation of eKanban for its long distance suppliers in Delhi and Pune, the company is confident that it would reduce its inventory further to about 4-6 hours. This translates to an arrival of about 4 trucks per 16 hours from long distance suppliers.

Speaking to the Business Standard, Joseph Saldanha, assistant manager, materials and logistics department, plant and logistics control division said, "The use of IT would be a key propeller for improved efficiency. When we began our operations, we started with 5 days of inventory. The inventory has now been reduced to 16 hours which translates to 2 shifts. With the introduction of eKanban, we intend to further reduce our inventory."

Toyota plans to implement this new logistics initiative by means of mixed logistics and increased frequency, while the lot size would also be reduced.

The company would also rely on introduction of cross docks. A cross dock is a trans-shipment point. Currently, the company has cross docks in Chennai, Pune and Delhi.

The concept of mixed logistics would come into practice along with Toyota Kirloskar Auto Parts, which is a separate company that also supplies components to Toyota's Bidadi plant near Bangalore.

This would mean that TKAP would share and in turn pay for the space that it would utilise along with other suppliers.

Toyota is also constantly focusing on "Kaizen" or "continuous improvement" , which includes standardising of forklift movement. Also part of its precision logistics are the Jumbiki System and the Chorukya System.