2007/HRDWG/FOR/007b Case Study of Thailand: Sustainable Career Development Throughout Working Life (Paper)

2007/HRDWG/FOR/007b Case Study of Thailand: Sustainable Career Development Throughout Working Life (Paper) Submitted by: Thai Automotive Industry Association (TAIA) Forum on Sustainable Career Development Throughout Working Life Chiba, Japan 14-16 November 2007

APEC Forum on Human Resources Development 2007 Sustainable Career Development throughout Working Life Mr. Ninnart Chaithirapinyo A Resource Person from Thailand Introduction Globalization leads to an increasing worldwide integration and convergence in the economic, social, political, and technological spheres. This phenomenon has brought about rapid change, which has had a definite impact on us. In order to survive this change, and be well-prepared and on a competitive edge, we need to create new approaches to capability and competency development. One of the key factors that can create high capability and competency of organizations is human resources development. Not surprisingly, both public and private sectors have plunged into the tide of developing competitiveness without concerning themselves with sustainable growth. However, this issue has become an increasingly, widely debated topic in recent years. Therefore, in terms of human resources, sustainable career development has been emphasized and has become a crucial issue to achieve sustainable competitive advantages. Based on my experience in the auto industry for over 36 years, this paper will more focus on human resources development in the automotive industry. I will present new methods of human resources development which aim, not only to develop employee s capabilities, but to expand this to proper working conditions and an impressive atmosphere in the workplace, which can lead to sustainability of careers throughout one s working life. Before I begin this presentation, I would like to briefly touch upon problems in the Thai labor market. Even though unemployment, with a rate of 1.57%, is not a problem in Thailand, in my opinion, we are currently facing the following problems. 1. A supply shortage of skilled labor 2. A mismatch between labor market s demand, and human resource s supply, created by the Thai educational system 3. A high turnover of new employees 4. Refusal of employees to take-on 3D jobs; dangerous, dirty and difficult jobs 5. A preference of Thai youth to work in the service sector rather than the industry sector. The solutions to these problems can be roughly summarized with the following points; 1. Effective training 2. Cooperation between the public and private sectors to develop a new education system 3. Better structure of welfare and human resources management 4. Standardization of a skill certification system 5. Improvement of a salary and rewards structure I will now explain how to turn these ideas into practical results by using Toyota Motor Thailand, or TMT for short, as a case study. As most of us are well aware, currently, we fully compete on a stage of global car competition. TMT tries its utmost to solve the problems in the Thai labor market, and also prepares itself for new challenges that lay ahead with global competition. TMT has implemented an 1

abundant number of projects, and each of them do not aim only at solving immediate problems, but also expects to create sustainable career development throughout one s working life. This presentation will be divided into three topics. The first one is HRD within TMT. We also expand our HRD system to our supporting industries such as our suppliers and dealers. For the overall automotive industry market, TMT cooperates with both public and private sectors of Thailand and Japan to provide training systems for local SMEs through a project called, Automotive Human Resource Development Program, or AHRDP. In addition, TMT goes beyond the boundary of its industry by contributing many HRD projects to Thai society. Therefore, I hope that this information being shared with you is useful. HRD in TMT 1. Human Resource Development 2. Employee Relation Management 1. Human Resource Development Basic Concept In the midst of globalization, which every economy is seeking for a competitive advantage, many governments, companies and non-profit organizations also are looking to enhance people s capabilities by utilizing various developmental tools that are matched with corporate cultures. Toyota Motor Thailand ( TMT ), as a case study, is similar. Since the completion of the Innovative International Multi-Purposed Vehicle (IMV) project in 2004-2006, TMT has rapidly grown in term of domestic sales and exports to international markets, such as South America, South Africa, EU, Middle East and Asia Oceania, bringing about increased production volume from 200,000 to 550,000 units per year. This was concurrent with the establishment of its new Ban Pho plant. Accordingly, TMT considers its people as being the most valuable asset of the company. As a corporate tradition, TMC s Top Management recognized human value, and paid attention to develop its people. One of its historical philosophies is: Because people make our automobiles, nothing gets started until we train and educate our people and People are the most important asset of Toyota, and is dominant in the RISE and FALL of Toyota. (Mr.Eiji Toyoda, TMC President 1976-1982) Moreover, TMC declared the Toyota Way 2001 as Toyota s key value and common understanding among Toyota people, with two main pillars consisting of Continuous Improvement, and Respect for People. The Toyota Way 2001 also clarifies its meaning for Respect for People emphasizing how to make the employees think, act and develop on behalf of the organization by providing opportunities to contribute and achieve self-realization and maximizing the performance of each employee in their respective workplaces. HRD Approach in TMT There are two main HRD systems that provide for two different groups of employees: Core Competency for Management and Office staff (White Collar) and Skill System Development for Production staff (Blue Collar). For the Managerial and Office staff, we have to match a couple of thing, namely, company goals and employee goals. We believe that there are things the 2

company wants to achieve (Vision, Mission and Policy), and this can only be achieved through the dedication of the employees. Promoting competency enhancement through people development is a must for the company so employees can dedicate all their knowledge and skills for the prosperity of the company. TMT s Core Competencies deal with Challenge, Change and Commitment. Challenge & Change: We want TMT people well-prepared to be selfreliant. Business changes involve six core competencies, namely, Kaizen, Problem Solving and Decision Making, Global Perspective, Innovative Thinking, Policy Management and Strategic Leadership. Commitment : We want to fulfill the employees role and responsibility, goal achievement, HRD, and care of stakeholders by raising six other core competencies, including Achievement Orientation, Customer Focus, Cost and Quality Consciousness, People Development and Coaching, Mutual Trust, and Communication and Integrity. To provide effective training, TMT established the Toyota Academy Thailand in May 2004 by splitting its HRD section under the HR department, to a new department with its mission to: 1) be the core HRD center of the Toyota Way in Thailand, and 2) enhance business performance and globalization within TMT and its network through an excellent HRD system. Toyota Academy Thailand shifted its importance to a division level in October 2005. Today, the Toyota Academy Thailand has trained more than 24,000 TMT employees and 800 people in TMT s Network (Management of Affiliates, Suppliers and Dealers). In the near future, Toyota Academy Thailand will prepare readiness for Toyota human development in the entire Asia Pacific region as well. For the Production staff, TMT has provided a step-by-step Skill Development System for newcomers, Team Members, and Controller and Managerial level employees. There are two required capabilities for doing this job: Standardized Work Management: They have to perform their work by following established work standards developed by production skill training, such as Fundamental Skill Training and Maintenance Skill Training. Shop Floor Management: They have to perform their work by acquiring necessary production knowledge and skills developed by role-playing and supervisory training, such as the Toyota Production System, Toyota Job Instruction, and Group Leadership Role. This kind of development requires a specific department to ensure training effectiveness which is relevant to actual performance at work. The Asia Pacific Global Production [Training] Center, or AP-GPC, therefore, was established in August 2005 to perform this task. As a HRD center for production skills, and located in Thailand, AP-GPC has gradually developed its role and responsibility to support all Toyota manufacturing companies in the Asia Pacific Region, similar to other regional HRD centers for production like the North American Production Support Center (NAPSC) in the USA, and the European Global Production Center (E-GPC) in the UK. Career Development in TMT Opportunities for career growth are very important. Therefore, concrete systems have been developed to ensure that self-realization of employees are not overlooked. TMT provides a Training Roadmap for both office and production employees on a step by step basis, from newcomers, to General Managers. The Training 3

Roadmap will also be integrated into HRM functions as one factor for promotion in 2008. The production staff has also been provided a career development mechanism named Working Life Plan (WLP). Under this plan, employees are trained in the fundamental skills of their respective shops on a rotational basis. WLP is also linked to promotions, similar with the Training Roadmap. Furthermore, TMT expanded its self-realization opportunities to other activities, such as: 1) Potential Executive Programs: This program is provided to managerial staff at each level whose competency and performance evaluation results are high. 2) Skill Contest 2007: Designed to motivate career development in the production area and strengthen the WLP system. TMT has conducted Skill Contests for many years starting in each shop of each plant, finding representatives to join the TMT Cross Plant, Asia Pacific Skill Contest and TMC Skill Interchange Festival, respectively. 3) QC Circle (QCC): Since 1983, QCC has been implemented in TMT as one of the main Kaizen (Continuous Improvement) activities for the production line. QCC is an activity that promotes problem-solving, called the Toyota Way in Practices. In this activity, employees accumulate knowledge and practices of problem solving, including job and process improvement. Currently, the number of participating teams has substantially increased due to wider participation from the office area. 2. Employee Relation Management Our Principle With its long history of great success in Thailand, one of the core principles underlying TMT s remarkable performance is Human Resources Management, which has become the company s DNA. It deals with Mutual Trust and Mutual Respect, which requires the company to ensure stability of employment and also improves working condition. In return, employees have to show their strong ownership of their responsibilities. Based on the company s DNA, both the company and its employees share common values, goals, and targets for the company s prosperity. When success comes, all employees receive suitable benefits which contribute to happiness within our organization. How to ensure good relations with employees TMT strongly believes in the importance of human resource management, thus, it promotes good relations with employees through three key factors: Information sharing, communication opportunities, and mutual trust and respect. We initiate many activities that provide mutual understanding within the company. They can be divided into activities concerning our labor union and activities with all employees. Our company respects its Labor Union since it acts as employees representatives. Accordingly, TMT and the labor union have many kinds of communication. Activities with labor union 1. Information Exchange Meetings: The objective of this is to acknowledge situations in all departments. The first benefit derived from this activity is to 4

let the Labor Union understand the current situation of the company. And the second benefit is to reduce negotiation time. 2. Joint seminars between senior management and the Union Committee, and Familiar Communication between the President and the Labor Union Committee: The objective of these two activities is to directly convey Company Policies and direction to the Union Committee. The benefits received are good relationships between Top Managements and the Union Committee. 3. Workplace Visits: This activity provides an opportunity for our HR staff and the Labor Union staff to acknowledge problems and receive suggestions directly from employees for improving working conditions. Apart from that, I would like to give some examples of activities TMT directly provides its employees. Activities with all employees 1. Familiar talk between Senior Management and Staff: The objective of this program is to enhance each workplace s communication and relationship between top managements and the non-managerial staff. It is also an exchange channel for communication between the company and its employees. 2. Toyota Family Day: This is an annual event for employees and their families to be entertained and to enjoy a cheerful moment together through many activities at an amusement park. 3. Asakai, Yorukai Activities (Morning and afternoon meeting before start working): This activity provides a communication channel among production lines. It s also a chance for blue collar employees to directly communicate with the human resource staff. 4. Communication Promotion Office: This is a recently established special unit designed to enhance communication within TMT. It is intended to be a direct way for employees and top management to communicate so that we can acknowledge employees needs for further improvement. 5. Internal Communication 2007 under the theme Reflect the past to start our future : This massive event was recently held on Aug 26 th, 2007 for the first time in TMT s 45-year history. The objective of this event was to communicate the history of our company, including our past hard efforts to 4,000 employees, especially the newer generation. This is crucial because many of them have different images about the company s history, especially the struggle during the financial crisis in 1997, and the way we got through that difficult period with no-layoff policy and moved forward together. The messages of this event were shared by our top executives directly from their own experiences. The result is a greater commitment between top management and employees to form a united front for a brighter future for the company. Performance of TMT s Employee Relations Management Our effort to keep good relations with our employees has contributed to the outstanding performance of Toyota s employee relation management. This can be seen from our employee s level of engagement and the many Excellent Labor Relation Awards we received. Employee s level of engagement: I would like to share with you our employee s level of engagement rate after the massive event previously mentioned. 5

The feedback from the questionnaires is extremely positive and impressive. The results indicate that the duration of service years directly correlates with the employee s level of engagement. Compared to the average level of engagement prior to the Talk show, which was at 50%, the engagement level of the group of employees with more than 10 years of service was 96%, which is the highest. Moreover, the level of employee engagement between 2-5 years of service is around 80%, which is the lowest. Therefore, special attention must be paid to this group. In general, employees who attended the event really enjoyed themselves, and many were inspired by the activities that were conducted, and represented the highest rate of 98%. It can be concluded that we have achieved great results from the Internal Communication event, especially in terms of enhancing the sense of belonging of all employees. The Excellent labor relation Award and the Excellent Welfare Award: Since 2002, TMT has been evaluated by the Ministry Of Labor governmental agency in terms of basic compliance to labor law and the excellence of welfare for employee. In line with TMT s efforts and dedication to take good care of its employees, they received the Excellent Labor Relation Award and the Excellent Welfare Award for five consecutive years since 2002. This outstanding performance has led to the Continuous Excellent Welfare award for 2007, which was received from the Prime Minister on September 10 th, 2007. HRD for Suppliers and Dealers 1. Suppliers: Toyota Production System, Safety Management, Quality Management 2. Dealers: Toyota Education & Training Center, Toyota Automotive Technology School 1. Suppliers Toyota Production System Since being established in October, 2004, the TPS Promotion section s responsibility has been to support suppliers that produce automotive parts for TMAP- EM. Considered as our business partners, suppliers are encouraged to achieve higher levels of quality in their manufacturing system. We replaced the old Push System by introducing a Pull System that eliminates processes that do not add value to our products. Furthermore, the Toyota Way is applied in order to counteract new challenges and to ensure continuous improvement for suppliers. This year, we have 81 TPS suppliers that are separated into three divisions; namely, Leader, Sub-Leader, and Member. A TPS training program is provided at the beginning of each year, educating suppliers on TPS introduction and theory. Accordingly, we select suppliers by their TPS efficiency to participate in the project, such as TSST Supplier Joint Jishuuken ( Self-study or Autonomous study group ). This includes various practical contents. The activities offer specific expertise that is best suited to their type of achievement. TPS Final Presentation and TPS Supplier Evaluation are conducted at the end of each year in order to evaluate annual TPS results. The purposes of our activities are to ensure Quality, Delivery, Safety, and also to enhance their staff morale. The selected suppliers are trained on TPS ability by the Genchi Genbutsu (Go & See) method in order to promote self-reliance and be able to develop their firm s competencies. 6

Along with this, TMT also improve itself by engaging in teamwork with its partners. The results of these activities can be evaluated by the following indicators; 1. Reduction of Lead Time, Manpower, and Area Usage 2. Improvement of productivity by comparing our target to the suppliers target 3. Development of both TPS section s and our partners human resources in applying TPS to their own firms, and develop the wisdom of working under pressure. The TPS has been widely applied to many industries all over the world, therefore, T in TPS does not mean only to Toyota, but also to Thinking. It can be said that TPS is a rational theory that requires various approaches that encourage trainees to think. We believe TPS can overcome any potential challenges, and is a winning strategy that will lead Toyota and its partners to attain all-important Cost Reduction. On the other hand, TPS itself also upholds Continuous Improvement, which is the key success in meeting all our goals. This will help our accomplishment in the trend toward Globalization. Safety Management Activity TMAP-EM announced three main policies dealing with Zero Fatal Accident targets to all suppliers as follows: 1. Promoting Zero Risk Workplace 2. Conducting Off the job safety to prevent traffic accidents, and 3. Promoting Safety Activity to our partners There are five safety activities with all suppliers. They are: 1. Supplier Safety Management Kick Off Meetings 2. Completely Check Completely Find out (CCCF) Training 3. Safety & Quality Exhibitions 4. CCCF Safety Audits & Evaluations 5. TCC Safety Activities (TCC: Toyota Co-operation Club) The CCCF principle is a new innovation of safety activity introduced in Thailand. All employees must identify any potential hazards and inform leaders to take preventive actions immediately. Suppliers top management must be the chairmen of their respective CCCF organization. The role of suppliers top management should include periodic safety patrols, confirm safety prevention, and identify potential accidents with employee. Most importantly, the top management should elevate safety awareness of all employees. Quality Management Activity TMT has been a production base of IMV s and their worldwide export since 2004. It was TMT s objective to strengthen and improve parts quality to achieve world-class quality. Therefore, TMAP-EM introduced quality gate to all suppliers and implement seven activities as follows; 1. Establish ASAKAI (morning) Meetings for quality issues in the Purchasing Department in order to communicate defect information among purchasing members, then make countermeasures immediately. 2. Have face to face meetings with top management of problem suppliers 3. Introduce Genchi-Genbutsu in order to confirm countermeasures 7

4. Hold monthly Suppliers Meetings to communicate the quality status to suppliers top management 5. Initiate Packing Quality Improvement Activities through training and auditing of the suppliers 6. Introduce Yellow Card Activities to urge top management of poor suppliers to improve their performance 7. Establish TCC QA activity (Improve parts quality of TCC members) In addition, TMAP-EM monitors all suppliers in three areas, such as the number of defects, frequency of problems, and ppm so called 3 High Defect Supplier Activity in order to treat suppliers who cannot achieve success in our three areas. Finally, TMAP-EM believes that its suppliers will achieve world-class quality in the near future. 2. Dealers Toyota Education & Training Center The Toyota Education & Training Center is the largest and most modernized facility among all automobile education & training centers in Asia Pacific. Our Education & Training Center was established and began operations in June, 1996. Currently, we have a total of 87 employees, and have been able to support dealer's staff training of 4,210 people in 2007. Our missions are to train and develop dealers staff and our employees on customer service skills, as well as to transfer automotive technology to Thai society. Moreover, we also expect to improve our service skills by conducting Sales & After- Sales Skills Contests. The Toyota Education and Training Center enforces Human Resource Development Systems through various curriculums on a step-by-step basis for our students. During the first step, trainees start in the T-TEP, or Toyota Technical Education Program, which is a cooperative effort between Toyota and the Ministry of Education to attract service personnel for the purpose of joining Toyota s Dealers. The T-TEP is a program designed to recruit talented younger generation individuals into the Toyota network by supporting technical institutions with training materials and equipment. Moreover, we also have a total of 21 Technical Institutes who have joined the T-TEP program which are classified as 11 General T-TEP s, and 10 Body & Paint T-TEP s. The next step is the TEAM 21 (Toyota Education for Automotive Mastery in 21st century) training course, which is especially designed for general technicians. The training curriculum of TEAM 21 is divided into four levels as following; 1. Toyota Technicians, who perform periodical maintenance within flat-rate time. 2. Pro Technician, who can perform frequent repairs within flat-rate time. 3. Diagnostic Technicians, who can perform basic diagnostic procedures for individual system problems, and 4. Diagnostic Master Technicians, who can perform advanced diagnostic procedures for cross-system problems Service Advisors will be trained in the TSA21 (Toyota Service Advisor Program) training course. The training curriculum of TSA21 is split into two levels as following; 8

1. Service Advisor Level 1, which can perform maintenance & repair advice, Control service operations, and customer follow-up. 2. Service Advisor Level 2, which can perform complaint handling, and all customer requests. Body & Paint Technicians also have their training course called the B&P TEAM (Body & Paint TEAM). The training curriculum of the Body & Paint TEAM is divided into three levels as following; 1. B&P Toyota Technician, which can perform light damage repairs. 2. B&P Toyota Pro Technician, which can perform medium damage repairs. 3. B&P Toyota Master Technician, which can perform heavy damage repairs and quality control checks. For all dealers staffs who pass certification examinations in each level, dealers will pay them a Certification allowance as a reward and motivate for them to improve their skills and knowledge at higher levels. Finally, since 1975, in order to produce the highest customer satisfaction possible, and continuously develop skills of the dealer's staff, Toyota has started to conduct yearly National Sales & After-Sales Skills Contest for Technicians and Service Advisors. Presently, we have conducted Skills Contests in 8 categories, namely; Sales Representatives, Parts Staff, Service Advisors, Customer Relation Managers, Technicians, Body & Paint Service Advisors, and Body & Paint Technicians. The winners will be cordially invited to attend the Annual Assembly of International Customer Service Champions in Japan to honor their outstanding achievements, and to help them gain a better understanding of Toyota's service philosophy. Toyota Automotive Technology School (TATS) The objectives of our TAT schools are to establishment a supply of high quality human resources to support after-sales business demand, and to comply with the Thai government s policy in technology transfer. Toyota Automotive Technology, or TAT, schools provide formal education, authorized by the Ministry of Education, under the registered name Toyota Automotive Technology Co., Ltd. The school was started in June 1998 and provided two-year Higher Vocational Education Certificates in two programs of Automotive Technology and Automotive Service Technology. TAT acquires high school graduates, as well as those who have obtained vocational education. There are many programs for Automotive Technology in which students are trained in special knowledge and in professional skills. Certifications provided for this program are as of following; 1 Higher Vocational Education Certificate provided by The Government 2 Ministry of Labor Certification for Technician provided by The Government 3 Toyota Body & Paint Certificate provided by TMT 4 Toyota Pro Technician Certificate provided by Toyota Motor Corporation Apart from that, there are also the Automotive Service Technology programs in which students are trained as After Sales Service professions, such as Service Advisors, Customer Relations officers and Parts staff. Certifications provided for this program are as of following; 1 Higher Vocational Education Certificate provided by The Government 9

2 Ministry of Labor Certification for Technician provided by The Government 3 Toyota Technician Certificate provided by TMT 4 Toyota Service Advisor Certificate provided by Toyota Motor Corporation Since the school started in 1998, there have been a total of 825 graduates. These graduated students are capable of becoming an important part in the automotive industry. Detailed below is the job recruitment history of TAT graduates. 1) Working 50 % - working with Dealers 35%, TMT and affiliated company 12% and supplier companies 3% 2) Family business and others 23% 3) Further study (University level) 27% HRD and Corporate Social Responsibility 1. The contribution to the Thai Automotive Industry: Automotive Human Resource Development Project (AHRDP) 2. The contribution to Thai society: Toyota Thailand Foundation, Pradabos Project and Scholarships Apart from its system to solve internal HRD requirements, TMT has also helped the Thai automotive industry and has supported the social development of the country. TMT realizes that one company alone cannot prosper without the coherence of growth among concerned partners. After the 1997 economic crisis, in 2000, Thailand implemented the first master plan for Thai automotive industry development, with the vision to be an automotive hub of Asia. Within five years, the industry recovered to become a star industry of the country by achieving all the goals one year prior to the target time. The major goals were to produce one million units of automobiles, three million units of motorcycles, and export more than 200,000 million Baht of auto-parts. This year, Thailand is drafting a second master plan directed at sustainable growth. With more than 2,000 existing qualified auto-parts manufacturers, Thailand is considered to be one of the competitive auto manufacturers in the world. However, many threats lay ahead in order to achieve more challenging goals. Moreover, Thailand realizes that it has to adapt itself to be capable of competing in the free trade arena. The success of the new plan relies on productivity and knowledge accumulation, and utilization in which human resources are key factors. If the country wants to boost the industry, more human resources are needed, together with the higher qualifications due to the fast changing technology in the automotive industry. 1. The contribution to the Thai Automotive Industry Automotive Human Resource Development Project-AHRDP The AHRDP project has been set up with the support of many partners from Thailand and Japan. It is a very unique project in which many parties from both public and private organizations of the two countries, joined together aiming at the same target, i.e., human resources development for the Thai automotive industry. With the hope that if the industry grows and sustains itself, all players will mutually benefit. The project runs by two collaborative principles: equal partnership between Thailand and Japan, and maximum utilization of existing resources. The main objective is to create human resource development for the Thai automotive industry through various kinds of Technology Transfer which can sustain and benefit the industry. Technology transfer in AHRDP strives to improve engineering, mould & die making and manufacturing capabilities by transfer the knowledge and technology from the 10

supporters, to Thai Trainers, and distribute the knowledge industry-wide, especially for pure Thai second and third tiers. The outcome of the project is for Thai trainers to obtain technology transferred from the Japanese experts. Consequently, those Thai trainers will later transfer their knowledge to Thai workers. The Thai government provides big support in terms of both budget and effort to many organizations led by the Ministry of Industry. Participating ministries are the Ministry of Education, and the Ministry of Labor. The Thailand Automotive Institute acts as an implementing organization. On the Japanese government side, much support is given in expert dispatching, and in providing machines and tools, and, of course, budget allocations are made by JICA (Japan International Cooperation Agency), JETRO (Japan External Trade Organization), and JODC (Japan Overseas Development Corporation). Four private companies help in transferring their technology to the Thai trainers, i.e., Toyota provides training on the Toyota Production System Denso provides training on manufacturing and mind management Honda provides training on mold & die technology Nissan provides a skill certification system. With this freely opened project, all automotive-part suppliers in Thailand, especially whether they are tier 2 SMEs of any companies, or suppliers to other non- Japanese vehicle manufacturers, are eligible to participate in it with fair treatment. I would like to emphasize, again, that this system aims for sustainability of the project. All curricula are well designed to fit both the current and future demands of the industry. The expected outcome of the project is not only represented by the number of the trainers, but the project has to generate further activities. Technology Transfer Technology transfer of the Toyota Production System is an extension of TMT s normal support to its tier one suppliers. There are two steps in the process Step 1: Training Thai trainers by six TMT master trainers. Thai trainers are required to learn and practice in a real environment in three factories in three cycles (4 months for each cycle). They will learn how to diagnose the existing systems of the participating factories, and seek the right solutions to the problems of the production processes by using TPS as a major solution. Four TPS tools are utilized: worksite control, continuous flow, standardize work, and pull system. During the process, personnel of participating companies are trained in both the TPS philosophy, and how to practice it in a real environment in their factories. So, the system is embedded in the companies through their invaluable human resources. This process cannot actually produce much output at the beginning, but fruitful benefits will occur within only a few years, with an exponential rate of growth. Step 2: One year after, the trained Thai trainers are ready to teach and give advice to the participating companies. With this extending process, more and more companies and personnel can involve themselves in the development process under the capability of the Thai trainers. In the long term, the system can sustain itself and benefit both the industry and the country. Results of the implementation In addition to the TPS trainers development, around 112 TPS staff in 24 model companies are improved through being a part of TPS activity implementation. The results of 2006-2007, after the companies implemented TPS, are a decreasing of stock 11

(Work in Process and Finished Goods) level between 25-75%, increasing of productivity between 30-50%, and the reduction of utilization area between 30-50%. The improvement results in the 2006-2007 model companies represent an economic impact of around 44.88 Million Baht, compared to the invested capital of both the government and private side which were around 11.7 Million Baht. The improved values are derived from lead time, stock and area reduction, and increased productivity. With the success of the project, we expect that TPS activity to create a multiple effect on human resource development. From 2005 to 2010, a group of 45,000 engineers, technicians and leaders, will be developed through this project accounted for 50% of the employees in the Thai Automotive Industry. 2. The contribution to Thai society Toyota Motor Thailand (TMT) has set one of its missions to create a better quality society through meaningful social contribution. To fulfill the mission, the company conducts its social contribution for the needy areas of the society and provides support by utilizing the company s strengths be it our know-how or manpower for the best interests of the Thai society. The social contribution activities are operated by two corporate channels: Toyota Motor Thailand and Toyota Thailand Foundation. Toyota Thailand Foundation Toyota Thailand Foundation was established 1992. The fundamental objective is to help alleviate social problems in the remote areas of the country. The focus areas are education, quality of life and support to other organizations. Education is the firstly prioritized area. The work to promote educational opportunities is divided into two main activities which are scholarship donation and promotion of academic studies. The foundation provides the annual scholarships to less fortunate students in all education levels. In area of academic studies, the foundation supports, for example, TTF Awards for excellent academic writing, publishing of textbooks and organizing academic seminars. Pradabos Project and Scholarships For Toyota Motor Thailand, Education and Technology Transfer is one of the company s social contribution areas, in which it can effectively contribute to the sustainable development of the Thai human resource and education. The elements of our efforts in Education & Technology Transfer are comprised of the transfer of our automobile technology and the provision of scholarships. The technology transfer program is aimed at developing the teaching and learning of automobile education in Thailand and creating skilled personnel in the career market. The objective of our scholarship program is to enable needy students in all educational levels to complete and elevate their educational goals. Realizing its strengths in resources in automobile education be it personnel, knowledge, know-how and technologies, TMT extends its technology transfer program to the charitable foundations and the general public. In 2005, TMT started the Renovation of Automobile Workshop and Development of the Automobile Curriculum project for the Pradabos School, which is the project under the Royal Patronage of HM the King. The objective is to set up standard and quality automobile learning environment and enhance the automobile maintenance curriculum for the 12

underprivileged students and general public so that they can establish their career in automobile segment or carry on the knowledge back to their hometown. The Pradabos Foundation School provides non-formal education for the underprivileged member of the society such as the homeless, drug addict or financially disadvantaged and conducts the charity work for the society. The students are required only the basic literacy skills and strong commitment to studying. The school started vocational education in 1976 and at present opens 6 courses in electricity computers, automotive, sufficient agriculture, maintenance and housekeeping in its two campuses. TMT renovated the automobile workshop by installing standard automobile check up and maintenance equipments and a standard classroom. In terms of curriculum, we donated teaching materials, textbooks and basic automobile system learning charts. Most importantly, TMT is involved in training programs for the teachers and student. At present there are 18 students graduating from this curriculum and 25 students attending the course. The certificate from the school will enable them to start their own careers or work as automobile technicians. In scholarship area, TMT responds to the needs of students and scholars who wish to pursue their educational goals in Doctorate level. The Chula Dussadeephipat Scholarship Program is initiated by Chulalongkorn University to provide 90 Doctorate scholarships. Her Royal Highness Princess Maha Chakri Sirindhorn kindly provided her personal fund to establish this scholarship program. Toyota Motor Thailand is one of the supporters for the funding of the program. The fund will be utilized for the course work, research studies and honorarium for honored overseas professors. One of Toyota Motor Thailand s long term contributions is the provision of scholarship to the students of Thailand s two prestigious universities, Chulalongkorn University and Thammasart University. The program started in 1973 as one-time scholarship and has developed to 4-year full program scholarship. For 35 years, TMT has enabled them to continue their studying with confidence in the educational future. As of 2007, the scholarship program has provided 2,257 scholarships to students of both institutes. In addition, TMT focuses on enhancing the development of Japanese Languages Studies in Thailand through Toyota Fund for Japanese Language Section, Faculty of Arts, Chulalongkorn University. The project was graciously initiated by HRH Princess Maha Chakri Sirindhorn in 2005. The objectives are to extend the Japanese Language curriculums in Master and Doctorate Degrees, recruit Japanese professors, purchase textbooks and database as well as to support academic activities. The fund covers five academic years from 2006 2010 with the total budget of 19.75 MB. Toyota Motor Thailand recognizes that education is the prime fundamental contributing to the country s sustainable development. The contribution given under the scheme of Toyota Motor Thailand and Toyota Thailand Foundation ensures that the support can cover all educational levels and the needy areas of the country. Every support is aimed at promoting and producing quality human resources for the nation. Toyota will continue its educational contribution for the best interests of the society as we always say Toyota Thailand for Thai Society. Conclusion After the financial crisis in 1997, all sectors including automotive sector were adversely affected. The Thai government together with key players in the industry tried their utmost to rescue the industry. With close collaboration between public and 13

private sectors, many projects were implemented and human resources development was considered as the most urgent priority. Many companies such as TMT put much effort to establish their own HRD system and in the mean time help others to move along together. After a few years growth of Thai automotive industry has proved that higher capability of human resource is a critical factor to success. With the well trained personnel, the Thai automotive industry can export more than 600,000 vehicles to more than 140 countries. Export value of this sector ranks number 2 in export account of the country. Besides, Thai automotive industry contributes more than 10% of GDP of Thailand. The booming automotive industry can attracts the young generation to join the industry more than the other ones as they can see the bright future both in their earning and their career development. As we all agree that human resource is a critical factor to success, every organization must take good care of this resource by trying to develop and retain it in the organization and let it utilize its ability to the maximum. My talk today shows only one example of our attempt which we should adopt and expand this concept to every organization and community. 14