ENTERPRISE RESOURCE PLANNING

CIA 1

PROCESS MAPPING & BUSINESS RE-ENGINEERING IN AN ERP

CONTEXT WITH SPECIAL REFERENCE TO TOYOTA

A Group Project Proposal Submitted

By
Vimal Sharma 2127629
Pari Arora 2127651
Anirudh Bollakpally 2128003
Sherin Hussein 2128049
Shivani Gaonkar 2128050

Under the Supervision of

Prof Shreekant Deshpande

School of Business and Management

CHRIST (Deemed to be University)
Bengaluru, India
March 2022
 1. INTRODUCTION

1.1 About Toyota:

Figure 1: Toyota's Company Logo

Toyota is a Japanese multinational automotive headquartered in Japan, incorporated in 1937 and

produces about 10 million vehicles a year.

Leaders of Toyota defined Toyota Way in 2001, headed under two pillars: continuous
improvement and respect for people. Under continuous improvement, there are three principles:
challenge, continuous improvement process, and” go and see. “ Under the respect for people pillar
are two principals: respect and teamwork.

Toyota transformed its approach to production and pioneer of lean manufacturing and defined it
as “Toyota Production System” under two pillars: Just in time: manufacturing what is needed, only
when needed, and the amount needed. 2nd pillar of the Toyota Production System is “Jidoka,”
which means automation with a human touch.
2. BUSINESS PROCESS OF TOYOTA

Figure 2: Business Process at Toyota

A business process is a series of activities that work together in a linked manner to convert the
input into outputs. In the above Business Process Flow Toyota the three-segment has been created:

a. Order to Cash
b. Manufacturer
c. Material Supplier.

 Order to Cash:

Getting pre-payment for the orders made by the customers, then the orders are manufactured after
manufacturing, the products are delivered to customers, and orders are closed. With are interlink
from Manufacturing to Calculating the bill of material used by the Manufacturing Department.

 Manufacturer:

Initially, Toyota gets the advance for the order placed by customers, at the same time, Material
Supply Analysis goes on how much stock is available and how many cars need to be manufactured,
if there is enough raw material stock, no need to place orders to suppliers. However, if not enough
material or component is available, there is always reserved material with Toyota, if Reserve

 Material Supplier

Material is enough, production will start without placing an order for raw material; if not the orders
are placed with suppliers, the purchase order is made, and material is delivered first, and then the
production starts. Moreover, the Finance department starts calculating the bills, and after the
delivery is done, payment is processed by the finance department, and manufacturing production
begins. After the manufacturing is completed, the orders are delivered to customers, and the order
is closed after getting the final payment.
Many departments work as a support system to manufacturing which is the core activity of the
department. HR would hire people if the orders placed more than what the existing workforce can
handle. The IT department looks at all the IT devices working correctly, as robots are working,
and should be accessed by the infrastructure created by IT employees.

Safety Department, Sales Department, Logistics Department works as a support system to the
manufacturing department.

3. TOYOTA PROCESS FLOW

Figure 3: Toyota Process Flow

The above process flow chart shows the Toyota process flow which consists of flow between the
customer, manufacturer, supplier and distributor. The manufacturer consists of processes like
launching new versions of the product, designing newer models, ordering parts for production
from the supplier. Manufacturers also take necessary steps for quality assurance with the help of
alert management systems. If there is any problem detected by the alert management system then
the production is stopped and the problem is fixed before continuing production.

On the supplier side, the supplier ensures that they have enough parts to meet the production
demands and stores the excess parts as a buffer and checks if the supplies are in good condition.
The distributors store the vehicles in the warehouse for distribution and wait for customer orders.
Once the customer places the order, the distributor ships the vehicles to destination and the order
completes when the customer receives the order.

3.1 As-is system Management Information Systems:

 Toyota Warehouse Management System (Toyota WMS): The Toyota WMS is

entrusted with performing a critical function of creating comprehensive reports
using large amounts of warehouse data that would otherwise be regarded as waste
by decision-makers.

 Jidoka: If a problem arises at any point throughout the manufacturing process,

Toyota's error detection system, or Jidoka, identifies the issue and lets line workers
to take quick action to address it, even if that means stopping the production line.

 Hybrid Synergy drive: Toyota has developed a computerized engine system that
monitors engine efficiency and optimizes power use in the vehicle.

 Pokayoke: Pokayoke is a management information system that detects if there is

any defects in the production.
  Andons: Toyota employs management information systems with visual controls to
communicate the state of production in real time. Management information systems
also provide vital information such as the machine failed to run, the operator, and
the real-time circumstances in which it failed.

3.2 Material Requirements Planning (MRP):

The Material Requirements Planning (MRP) system used by Toyota inventory management
system that helps in scheduling and placing of orders for dependent demand goods. These include
raw materials, work in progress goods, components parts and others. Manufacturing resources
planning, or MRP II, was the next version of MRP, which included parts of marketing, finance,
accounting, engineering, and human resources in the planning process.

Figure 4: The 7 Production Waste

The Toyota Production System (TPS) was introduced in 1970s and its main aim was to improve
the production process by eliminating wastes. It focused on lean manufacturing. TPS focused on
removing wastes which were due to motion, inventory, lead time, defects, overproduction, and
transportation and over processing of finished products.
3.4 Toyota Production System:

Figure 5: Toyota Production System

The Toyota Production System (TPS) has mainly four steps.

 Production Order Information: This step includes the product order details, production
plan and the sequence of production.
 Timely Production: In this step, the vehicles are produced according to the specifications
one at a time in order to ensure that each of the production is being done efficiently and in
a timely manner.
 Replacement of Parts Used
 Production of Parts Retrieved
 4. TO-BE SYSTEM

Toyota's ERP (Enterprise Resource Planning) solutions helps in management and decision-making by
providing universal coverage to a management database. Accounting, procurement, labor, and production
management are all upgraded with the help of ERP systems.

Figure 6: Toyota's ERP System Model

Toyota Material Handling focused on customizing the ERP platform for the business's unique
features by adopting Odoo-.It uses community developed apps to complement Odoo's basic
functionality, building additional features as needed. Toyota also looks forward to integrate Odoo
with its legacy systems, saving employees learning time significantly.
 4.1 Functional benefits of Odoo ERP:

The Odoo platform includes a number of functional features that contribute to the company's
operational content. Some of them include:

 Centralization of inventory and database management

 A modular structural module for all the functional modules
 The ability to manage multiple companies
 Tools for website creation and e-commerce management
 Manage multiple languages and websites
 Use Odoo documentation and digitized functions to go paperless.
 Integration of IoT and biometric devices
 Financial year description; functions - Data reconciliation and analytical accounting
 Routes with multiple steps and delivery choices
 Include a down payment, several payment terminologies, and controlled access.
 Double-entry bookkeeping and chart of accounts manageability
 Advanced, marketing, and promotional tools to support digital marketing ( Field and fleet
module to administer the company's servicing alternatives)
 Integration with social media
 Manageability of remote work
 Website monitoring and customer follow-up tools for Vitor
 Tools for e-learning and certification to run online classes
 Portal user manageability and setup choices, as well as multiple user settings
 Advanced HR management tool includes operational aspects of online and offline
recruitment.
4.2 ODOO Sales Module:

With the Odoo Sales module, Toyota manages every aspect of the business's sales department. The
module boosts the effectiveness of the sales teams and the business in a short amount of time by
using powerful and unique features of the Odoo 15 Sales module. Odoo is focused on ease of use,
and it offers a stress-free working environment. The Odoo system's user interface is simple to use
and gives fast access to all of the functions of the system. The Odoo 15 sales module integrates
with the CRM module to help the sales force handle customer relationships more effectively. The
Odoo open ERP's Sales Management module is responsible for execution of sales tactics and
assisting in the management of all sales related operations. Toyota effortlessly creates sales orders
from qualified chances with the help of this effective application.

Figure 7: Odoo Sales Module Flow

4.3 ODOO Accounting Module:

The Accounting module in Odoo 15 is used to handle the finances in a dynamic and simple manner.
The dashboard is fully equipped with advanced accounting procedures. The dashboard is an
informational summary of the accounting procedures. The dashboard includes filtering and
grouping options as well as guides the user through the accounting operations. The chart of
accounts and initial balances are configured for the accounting periods.

Figure 8: ODOO Accounting Module Flow

4.3.1 Features of Accounting Module:

● Saves time
● Accounts Payable (A/R)
● Account payables can be paid quickly
● Pay bills
● Reconciling Bank and Cash Is Simple
● Rights to Advanced Access
● Performance Reports for Multi’s
● Statements of Law
● Subscriptions for Analytic Accounting
● Revenues & Assets
● Connect Integrations
4.3.2 Benefits of Odoo Accounting Module

● Multi-user accessibility: The Odoo Accounting module supports multi-user access, and
Toyota can provide their accountants and business partners with numerous access
privileges, which are bound to the user's level of work, allowing them to do activities on
multiple levels.
● Multi-business support: If a user runs many businesses, Odoo integrates them all into one
accounting system. This tool allows Toyota to keep track of all of their journals in one spot.
● Mobile accessibility and cloud-based software: The important feature of Odoo Accounting
is that it is cloud-based, allowing users to access it from anywhere. Any report can be
monitored using the company's mobile applications. The idea is that the user may manage
their accounts on the website.
● Data security is of particular significance to Odoo because it deals with all of its modules
on the cloud, and security threats to cloud-based software are always present. For the
effective operation of a business, account data is always safeguarded.
● Scalability: Odoo's software is also scalable, as the company will provide an upgrade every
year if scalability is not maintained. It does harm to our system when we upgrade it.
4.4 Odoo Manufacturing Module

The reason Odoo ERP MRP module is open source platform which includes many capabilities that
a manufacturing company would demand. The manufacturing process begins with raw materials,
which are subsequently processed into various bills of materials (BOM) before being made into a
final product. A single product may contain multiple Bills of Materials that must be handled
efficiently. Odoo ERP software helps manage manufacturing process effectively. Odoo
Manufacturing ERP software is used to manage complicated production flows, BOMs, MO
planning, work order tracing, and more.
4.4.1 Benefits of ODOO manufacturing module:

● Easy integration of different operations

● Product and variant management
● Bill of material management
● Plan purchase of raw materials
● Coordinate marketing activities
● Ensure quality check
● Complete maintenance support
● Manage the product life cycle
● Organize inventory management
● Ensure customer support
4.4.2 Benefits of Odoo ERP

Odoo is a sophisticated ERP solution that was built in the previous decade and has a large customer
base. Because it is a modal solution, the platform has adopted an updated operational technique.
Odoo's business implementation provides the user complete control over business operations and
provide many operational functions to help operate the firm more efficiently and reliably.

One of the most significant advantages of Odoo adoption is the significant reduction in time.
The Odoo platform provides a cost-effective alternative with lower subscriptions and
implementation costs. Furthermore, the platform's localization feature will allow users to tailor
corporate operations to the needs of specific regions and the country's established legal rules.

5. BUSINESS PROCESS REENGINEERING

Figure 9: Business Process Re-engineering Model

By restructuring the organization, business process reengineering enables firms, particularly those
in the private sector, to fundamentally restructure their operations. It entails critical rethinking
processes in order to significantly redesign them. Companies like Toyota have embraced Business
Process Reengineering (BPR), in which non-value-adding procedures are eliminated and others
are accelerated through the use of technology. Toyota was able to efficiently and cost-effectively
satisfy their customers by implementing BPR. Previously, management had focused its efforts on
matters that were of less importance. Toyota incurred a lot of unnecessary costs as a result of its
inadequate cost structure. Profitability has improved since they adopted BPR since it has resulted
in constant development.

Toyota Material Handling went through some major organizational changes a few years before
deploying Odoo. The goal was to restructure their operations in Europe, with one in Sweden, one
in Italy, and one in France, to better manage their distribution network and supplier units. Prior to
adopting Odoo, they had a custom-built solution for configuring their highly customizable
vehicles; these trucks are specifically customized by their clients and account for roughly 40% of
the company's revenue. The issue they faced was that, behind the scenes, the factory in Italy lacked
the requisite technology to complete all of the necessary stages to:

● Acknowledge and take care of the orders that have been given to you.
● Manage the manufacturing or acquisition of the appropriate trucks from the appropriate
overseas business unit, and then organize shipment and billing to customers.

Because their previous solution also served as a configurator, altering one component of the
solution necessitated shutting down the entire system and replacing it with something new. As a
result, they conducted some investigation and discovered that they had two options: replace the
old system with a new custom-made solution or replace it with an off-the-shelf solution. Toyoto
required Odoo Sales to manage their orders first. When a consumer places a purchase, they need
to make sure that the products that go with it are available, and for that they need Odoo Inventory.
The next step was to take care of the procurement. For that, they have two options: On the one
side, they have in-house made products for which they employ Odoo Manufacturing.
They also have various products imported from their manufacturers in Japan, the United States,
and China, for which they use Odoo Purchase. Odoo Accounting was included so that clients could
be invoiced straight from the platform. The Odoo solution was swiftly developed, and Toyota was
already using it after only six months of integration. They were confident that they would save a
significant amount of money on the new IT solutions' maintenance costs because they had
previously maintained an in-house solution and now had an official solution. Furthermore, they
knew that with each new upgraded version of Odoo, they could expect useful new features that
could be readily incorporated and added value to their users.

Toyota considered timing to be one of the most essential considerations. If it hadn't been for Odoo,
they weren't sure they would have been able to make the modifications they desired in time. Odoo
provided a solution that could be adopted quickly while also providing management with a good
and dependable solution that the company could rely on in a matter of months. Toyota's key
advantage was the quick implementation time; even for a complex project, they were up and
running in a matter of months.

They saw the most value in Odoo on the information system side at the time of implementation,
because it's an extendable platform on which they'll build their entire information system. The goal
is to eventually replace everything with Odoo and, if possible, run their business entirely on Odoo.
It was also critical for Toyota to have a solution that allowed them to use their most valuable IT
asset, their employees. They have employees who are competent at software development and
have technological capabilities within the organization. Because of the open nature of the software,
the organization values having a system that can bring fresh additional value. Toyota employees
can also build new features that help the organization with no training.
5.1 Challenges faced by BPR process:

Many of the following problems confront companies like Toyota that have begun to deploy BPR
projects:
● Resistance
● Tradition
● Time requirements
● Cost
● Job losses

5.2 Benefits of BPR

The following are some of the benefits of BPR:

● BPR allows for seamless integration of various modules.

● It provides the business with the same views, such as the same database, consistent
reporting, and analysis.
● It has a process orientation feature, which allows you to streamline procedures.
● It has a lot of features, such as templates and reference models.
● It is adaptable.
● It's adaptable.
● It can be expanded.

REFERENCES
(2013, March 8). From ODOO: https://www.odoo.com/forum/help-1/accessing-work-flow-diagram-
within-openerp-4977

Toyota: Our Picks. (n.d.). From TOYOTA: https://global.toyota/en/

Why Toyota Choose Odoo Erp for Their Business. (2020, December 29). From Cybrosys Technologies:
https://www.cybrosys.com/blog/why-toyota-choose-odoo-erp-for-their-business