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Focus now on competitiveness, a shift from previous focus on high-volume production
Toyota Motor Manufacturing Indonesia (TMMIN), Toyota Motor Corporation's vehicle production subsidiary in Indonesia, recently completed construction of a new engine plant, with production beginning from the end of February. Built with an investment of approximately 2.3 trillion rupiah, the Karawang Engine Plant, located in West Java, has the capacity to produce 216,000 engines per year and will take on approximately 400 new employees. The plant will produce 1.3 and 1.5 litre NR engines, some of which will be for export.
With the goal of achieving sustainable growth, Toyota is creating plants with a focus on competitiveness, which is a significant shift from the previous focus on high-volume production. Toyota aims to build plants that are safer and more environmentally-friendly, whilst also incorporating innovative production technologies. This corresponds to Toyota's overarching goal of building simple, slim, and flexible plants around the world. As a result, Toyota's new plant in Indonesia―while compact―is able to effectively handle fluctuations in demand and to house all aspects of the engine manufacturing process under one roof.
Previously, manufacturing processes had been divided and were conducted in separate locations due to space constraints. Processes downstream were also subject to the negative impacts of tar, dust, and heat generated in the casting process. However, by reducing equipment sizes and eliminating certain processes, Toyota has minimized the negative impacts on downstream processes, and thus enabled the inclusion of all steps of the manufacturing process in the same plant. This reduces initial investment costs of plants and machinery by 40 percent in comparison with a comparable investment if made in 2008. Furthermore, with the elimination of in-process inventory, a leaner system of engine production has also been created.
In attendance at the opening ceremony for the new plant held onsite on March 7, Toyota's Senior Managing Officer Koei Saga commented, "Toyota sees TMMIN as one of our core hubs for the production and supply of both vehicles and engines. Through our operations here, we hope to maintain and strengthen our position as part of the local community here in Indonesia." Also present at the ceremony were TMMIN President Director Masahiro Nonami and representatives of the Indonesian government, including the Minister of Industry.