A

PROJECT REPORT

ON

“Study of R&D activity of Toyota”

IN PARTIAL FULLFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

POST GRADUATION DIPLOMA IN MANAGEMENT

Approved by AICTE

SUBMITTED TO

Mr. MANOJ SAXENA

SUBMITTED BY

SHREY SAXENA

ENROLMENT NO. 1413

PGDM 5TH TRIMESTER

INTERNATIONAL INSTITUTE FOR SPECIAL EDUCATION,

LUCKNOW

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ACKNOWLEDGEMENT

I would like to express my profound gratitude to all those who have been

instrumental in the preparation of this report which has been prepared in partial

fulfillment of Project report in the 5th trimester of PGDM programme.

I wish to thank Management and Faculty members of IISE for their support and

vision.

Finally we would like to thank our Parents, Family, Friends and God almighty for

their unending inspiration and encouragement.

PLACE: Lucknow

DATE: Shrey Saxena

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DECLARATION

I Shrey Saxena, hereby declare that the report “Study of R&D activity of Toyota”

is the result of our own work and our indebtness to other work publications,

references, if any, have been duly acknowledged.

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CONTENT

SR No. Topic Page No.

1. Definition of research and development 5

2. Corporate profile 6

3. Business overview 7

4. Corporate philosophy 8

5. Vision 2020 12

6. Corporate governance 12

7. Research and development 14

8. bibliography 17

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DEFINITION OF 'RESEARCH AND DEVELOPMENT - R&D'

Investigative activities that a business chooses to conduct with the intention of making a discovery that can either lead to the development of new products or procedures, or to improvement of existing products or procedures. Research and development is one of the means by which business can experience future growth by developing new products or processes to improve and expand their operations.

Research and development (R&D), also known in Europe as research and technical (or technological) development (RTD), is a general term for an activities related to the enterprise of corporate or governmental innovation. The activities that are classified as R&D differ from company to company, but there are two primary models, with an R&D department being either staffed by engineers and tasked with directly developing new products, or staffed with industrial scientists and tasked with applied research in scientific or technological fields which may facilitate future product development. In either case, R&D differs from the vast majority of corporate activities in that it is not often intended to yield immediate profit, and generally carries greater risk and an uncertain return on investment.

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Business Overview

Toyota Industries Corporation was founded in 1926 by Sakichi Toyoda to manufacture and sell the automatic looms which he had invented and perfected. Since that time Toyota Industries has promoted diversification and expanded the scope of its business domains to include textile machinery, automobiles (vehicles, engines, car air-conditioning compressors, etc.), and materials handling equipment, electronics, and logistics solutions.  With production bases in North America, Europe, and Asia (China and India), as well as a worldwide sales network, centered around our Materials Handling Equipment and Textile Machinery Segments, the operations of the Toyota Industries Group span the globe. In November 2006, Toyota Industries celebrated its 80th anniversary. We remain committed to the further development of our businesses and the unwavering pursuit of sustained innovation and creativity.

Automobile

Toyota Industries develops and manufactures automobiles and automobile-related products, such as vehicles, engines, car air-conditioning compressors, car electronics components and devices, and stamping dies.  In the vehicle and engine businesses we have achieved a top-class level of quality and productivity within the Toyota Group and are contributing to Toyota Motor Corporation's car production.  The car air-conditioning compressor business uses its unsurpassed technological development capabilities to develop and manufacture products of superior quality that have won extensive acclaim from Toyota Motor Corporation and other major automakers from around the world.  In addition, we are developing and producing car electronics components and devices such as DC-DC converters for hybrid vehicles and are also manufacturing stamping dies mainly for automobiles. The automobile business has adopted the themes of "safety" and "the environment" and is promoting manufacturing that fully supports the customer's use and enjoyment of their vehicles.

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Corporate Philosophy

Toyoda Precepts (Corporate Creed)

Always be faithful to your duties, thereby contributing to the Company and to the overall good.

Always be studious and creative, striving to stay ahead of the times. Always be practical and avoid frivolousness. Always strive to build a homelike atmosphere at work that is warm and friendly. Always have respect for God and remember to be grateful at all times.

Basic Philosophy (Toyota Industries' Corporate Philosophy)

 Respect for the Law

Toyota Industries is determined to comply with the letter and spirit of the law, in and outside of Japan, and to be fair and transparent in all its dealings.

 Respect for OthersToyota Industries is respectful of the people, culture, and tradition of each region and country in which it operates. It also works to promote economic growth and prosperity in those countries.

 Respect for the Natural EnvironmentThrough its corporate activities, Toyota Industries works to contribute to regional living conditions and social prosperity and also strives to offer products and services that are clean, safe, and of high quality.

 Respect for CustomersToyota Industries conducts intensive product research and forward-looking development activities to create new value for its customers.

 Respect for EmployeesToyota Industries nurtures the inventiveness and other abilities of its employees. It seeks to create a climate of cooperation, so that employees and the Company can realize their full potential.

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Five Values (We have Five Values that form an action guide for our employees to enforce our basic philosophy)

The “Five Values” were assembled as an “action guide” for the employees of Toyota Industries. Each and every one of our employees is to think for themselves and determine, “What concrete action should we be taking and how should we change?” They will then share these thoughts with each other, and by also sharing a similar set of values they will aim to promote the future development of Toyota Industries.

Toyota Industries Group CSR Policy

We, Toyota Industries Corporation and our subsidiaries, contribute to the harmonious and sustainable development of society and the Earth through all business activities that we carry out in each country and region based on our Basic Philosophy. We comply with local, national, and international laws and regulations as well as the spirit thereof, and we conduct our business operations with honesty and integrity In order to contribute to sustainable development, we believe that management interacting with its stakeholders is of considerable importance, and we will endeavor to build and maintain sound relationships with our stakeholders through open and fair communication. We expect our business partners to support this initiative and act in accordance with it.

 Customers

• Based on our philosophy of “Customer First,” we develop and provide innovative, safe, and high-quality products and services that meet a wide variety of customers' demands to enrich the lives of people around the world.

• We will endeavor to protect the personal information of customers and everyone else with

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whom we are engaged in business, in accordance with the letter and spirit of each country's privacy laws.

Employees

• We respect our employees and encourage personal growth for our employees under our belief that the success of our business is led by nurturing each individual's character and abilities, and realization of the Group's full potential.

• We support equal employment opportunities and diversity for our employees and strive to enhance our team strength. We do not discriminate against employees.

• We strive to provide fair working conditions and to maintain a safe and healthy working environment for all our employees.

• We respect and honor the human rights of people involved in our business and, in particular, do not use or tolerate any form of forced or child labor.

• Through communication and dialogue with our employees, we build and share the value of “Mutual Trust and Self-responsibility” and work together for the success of our employees and the company.

• Management of each company takes leadership in fostering a corporate culture and implementing policies that promote ethical behavior.

Business Partners

• We respect our suppliers, dealers, and other business partners, and work with them through long-term relationships to realize mutual growth based on mutual trust.

• Whenever we seek a new business partner, we are open to any and all candidates, regardless of nationality or size, and evaluate them based on their overall strengths.

• We maintain fair and free competition in accordance with the letter and spirit of each country's competition laws.

Shareholders

• We strive to enhance corporate value while achieving stable and long-term growth for the benefit of our shareholders.

• We provide our shareholders and investors with timely and fair disclosure on our operating results and financial condition.

Global Society/Local Communities

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[Environment]

• We aim for growth that is in harmony with the environment by seeking to minimize the environmental impact of our business operations, such as by working to reduce the effect of our vehicles and operations on climate change and biodiversity. We strive to develop, establish, and promote technologies enabling the environment and economy to coexist harmoniously, and to build close and cooperative relationships with a wide spectrum of individuals and organizations involved in environmental preservation.

[Community]

• We operate our business so as to earn the trust of respective communities by honoring the cultures, customs, histories, and laws of each country.

• We constantly search for safer, cleaner, and superior technologies that meet the evolving needs of society.

• We do not tolerate bribery of or by any business partner, government agency, or public authority, and maintain honest and fair relationships with government agencies and public authorities.

[Social Contribution]

• Wherever we do business, we actively promote and engage, both individually and with partners, in social contribution activities that help strengthen communities and contribute to the enrichment of society.

Vision 2020

In order to chart its own bold path through today's relentlessly changing environment, in fall 2011 Toyota Industries announced Vision 2020, which acts as a map and compass for charting a course to the next stage of growth.

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Corporate Governance

Basic Perspective of Corporate Governance

Toyota Industries strives to enhance the long-term stability of its corporate value and maintain society's trust by earnestly fulfilling its CSR commitments in accordance with its Basic Philosophy. To that end, Toyota Industries strives to enhance its corporate governance based on the belief that maintaining and improving management efficiency and the fairness and transparency of its corporate activities is of utmost importance.

Implementation Structure

Toyota Industries convenes monthly meetings of the Board of Directors to resolve important management matters and monitor the execution of duties by directors. We also appoint outside directors who are knowledgeable about our business operations. They attend meetings of the Board of Directors and give opinions and ask questions as deemed necessary. Through this

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supervisory function of outside directors, we ensure the legality and validity of the Board's decisions as well as directors' execution of duties from an objective perspective. The Management Committee, which is composed of directors above the executive vice president level as well as relevant directors, managing officers and audit & supervisory board members, deliberates on a variety of issues concerning important management matters such as our corporate vision, management policies, medium-term business strategies and major investments. Toyota Industries has a divisional organization system, with significant authority delegated to each business division. For especially crucial matters, however, we have established the Business Operation Committee to enable the president to meet with the heads of each business division regularly to monitor and follow the status of their business execution. At meetings of the Management Council, directors, managing officers and audit & supervisory board members convene to report and confirm the monthly status of business operations and share overall deliberations at Board of Directors meetings and other management-related information. In addition, issues pertaining to human resources, quality, production, procurement and technologies are discussed at the corresponding functional meetings. We have also put in place committees to deliberate on more specific matters, such as CSR, the environment and export transaction controls. These functional meetings and committees discuss important matters and action themes in respective areas.

Audit & Supervisory Board System

Toyota Industries has adopted an audit & supervisory board. system. Two full-time audit & supervisory board members and three outside audit & supervisory board members attend meetings of the Board of Directors to monitor the execution of duties by directors. At the same time, meetings of the Audit & Supervisory Board are held once a month to discuss and make decisions on important matters related to auditing. The full-time audit & supervisory board members carry out auditing by attending primary meetings and receiving reports directly from directors. Additionally, we have assigned dedicated personnel, while audit & supervisory board members monitor the legality and efficiency of management through collaboration with independent auditors and the Audit Department.

Research and Development (R&D)

In keeping with its founding spirit of “Be ahead of the times through endless creativity, inquisitiveness, and pursuit of improvement”, Toyota Industries actively carries out research and development activities. Our R&D activities can be broadly classified into two areas, (1) product development and improvements performed independently within each business division, and (2)

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R&D undertaken mainly by the “Research & Development Center” separate from the activities of our business divisions and with a view toward company-wide management strategy.

1. R&D Activities Carried Out by the Business Divisions

In each of our internal divisions various initiatives, centered on the technical departments, are being taken to promote the advanced development of future products that will lead the world in functionality, quality, and low cost. The results of these R&D activities are unveiled at an internal technology exhibition in each division and also at a company-wide technology exhibition held every year where the engineers from all divisions gather. In this way we strive to give our engineers access to a wide range of exchange opportunities.

Car air-conditioning compressor characteristic evaluation test (Installing it in the vehicle)

Testing the noise level of a lift truck

2. Research & Development Center Activities

The “Research & Development Center”, which is located in Kyowa, Obu City, Aichi Pref., undertakes the advanced development of fundamental technologies which will be the keys to the future products of each division, and advanced research for the development of new products for new businesses as well as development of materials and other technologies that will come to serve as the common foundation for all divisions. For example, there are a multitude of research and development results and prototypes such as a wide variety of functional parts for use in fuel

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cells, non-contact power supply technologies for use in clean logistics, super smooth coatings for inside car air-conditioning compressors, and three dimensional fabric reinforced composite technologies. From this point forward research and development will continue into new technology themes for every field including automobiles, materials handling equipment, and electronics.

Testing frictional wear of a new material

Micro analysis of the surface

In order to make research and development more efficient and introduce leading edge technologies, we conduct collaborative research with Toyota Central Research & Development Laboratories, Inc., an R&D facility of the Toyota Group involved in basic research, as well as with universities, other outside R&D institutions, and manufacturers. Top level research activities are carried out with the support of the newest simulation software and analytical instruments. In this environment our researchers and engineers are developed through wide-ranging participation in scientific societies in all the major technological fields, such as machinery, electronics, physics, and materials, etc. This allows them to absorb the latest

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technologies and we create opportunities for them to deepen their practical business experience in product development through exchanges with the other technical divisions within Toyota Industries and cooperation with other members of the Toyota Group.

BibliographyWebsite:

http://www.toyota-industries.com

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http://www.investopedia.com

http://www.google.com

http://www.yahoo.com

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