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Executive Summary / Abstract

Toyota is a well-known, leading worldwide automobile manufacturer. In Spain it is represented through its subsidiary Toyota España, which has a broad network of dealers to cover the Spanish territory, providing selling and technical assistance to end customers. The Toyota dealers are grouped into an association, who, sponsored by Toyota, took on the BPMS project in order to build an Intranet to manage and control their own environmental best practices according to Toyota policies and the ISO 14001 standard. Thus, the BPMS allowed the more than 250 Toyota dealers within the network to meet environmental Toyota practices with less human effort and the fewer technical and economic resources.

Overview

Toyota has been recognized as the top automobile manufacturer and one of the first to be concerned about the environment, driving a strong environmental best practices culture not only inside its own organization but also spreading it to its partners. Toyota is well-known for its market leading position selling eco-friendly hybrid cars that produce very low levels of pollution emissions. As a result, it created an ambitious project to have all of its dealers in Spain strive to achieve ISO 14001 certification and to demonstrate that their environmental culture is more than a marketing program. For this reason, Toyota hired a consulting firm with a leadership position in environmental practices in Spain in order to get the required advice for this ambitious project. With the external consultancy, the environmental system for Toyota’s Spanish partner network was designed and implemented in tandem with Toyota’s legal requirements as well as their internal audits and checks and balances. To make the project feasible, the consulting firm built an Intranet with all of the processes and documents involved, using a BPM Suite. The project was named GEAToyota, to coincide with the “goodness of the earth” and the initials of Environmental Managing in Spanish (GEA).

Business Context

All enterprises throughout the world have management systems related to environmental practices, some of them according to recognized international standards and some of them also with their own local policies and best practices. But the idea to extend these practices to a dealer network can be very difficult, because usually those dealers are small organizations without an environmentally conscious culture, and with limited economic resources. On the other hand, in Spain environmental laws and regulations are very complex, and there are several levels of environmental laws.

At the top, there are the European directives. Every country in the European Union can make specific laws according to this directive. Spain is a territory organized in an autonomous region of the EU, so, it can make its own laws which conform to the state laws. Ultimately, every municipality has its own laws and regulations as well, which are the most overriding. In this manner, a Toyota dealer have different regulations depending on the city where it is established, and all Toyota dealers must adhere to the environmental guidelines and best practices driven by the manufacturer. A traditional ISO project, without a BPMS to support it, would have failed. As a result, Toyota understood from the beginning that this project would need more than standard consultancy services, it would need a tool to manage the environmental system in order to normalize the processes and to automate the regulatory checklists individually for every dealer, keeping the amount of human resources in administrative tasks to a minimum, as well as keeping project costs at an acceptable level for the dealers.

In order to help the dealers, Toyota would subsidize and directly support part of the project, but every dealer would have to support part of the project to prove their involvement and commitment. The best way to achieve their goals for the project was with the inclusion of BPM practices and a BPMS product suite to build the management system.

To carry out the project, several actions where identified:

  • To develop an environmental guide applicable to the dealers.
  • To make an initial diagnose about the dealers’ environmental practices and culture, and to split dealers in different groups according to their characteristics.
  • To design the environmental system, according to the identified requirements determined in the discovery phase.
  • To identify the legal requirements that every dealer should meet.
  • To develop a process for maintaining the continuous changes in environmental regulations.
  • To design and to create an Intranet using BPMS to support the system and legal requirements.
  • To support every dealer certification.
  • To regularly monitoring every dealer’s activities and support them to maintain the system and the certification, using BPMS.

The Key Innovations

4.1 Business

This has been a large project, with several phases executed in order to achieve ISO 14001 certification for all of the dealers. The dealers where divided in four groups, starting with those who had a previous environmental culture or those who where most proactive with the project. It took nine months for this first group of selected members to become certified, but has been a complete success. The second group was certified one year later, and an additional year for the third group. As of today there are only a few dealers in the fourth and final group that are yet to be certified. So in about three years’ time, 90 percent of Toyota’s dealers in Spain have been certified and are using the environmental management system and executing environmental best practices every day.

4.2 Process

At the beginning of the project, no processes existed. All processes where created for this project, and they where created according to BPM standards.

The processes created were:

  • Organizations (New dealer, new working center)
  • Legal requirements
  • Environmental Aspects (Identification and evaluation)
  • Breaches (Corrective actions and non conformities)
  • Emergencies
  • Direction revision
  • Documentation and registers
  • Communications
  • Events
  • Environmental KPI monitoring
  • Internal auditing
  • Working center ownership changes
  • Environmental responsibilities and training
  • Objectives and goals

For every one of these processes, a detailed analysis was done, using ISO methodology and the consulting firm’s own methodology, identifying the need for the process, how to solve it, players or actors involved, data to process and its sources and destinations, and KPI’s for the continuous monitoring and improving of the process.

NOC Nonconformity Process
Figure 1. The Non Conformities Process
Source: AUREN
Click for Larger Image

As a sample, figure 1 shows one of the processes regarding non conformities. This process can be started from the Internal Auditing or Corrective Actions processes or manually by the System Manager, and involves the following actors:

  • RMA = ER: Environmental Responsible of the Working Center (every one of the dealers shops or workshops)
  • AMA = ESM: Environmental System Manager
  • GERENTE = MANAGER: Working Center Manager

When a Non-Conformity process is launched, the first step is to perform an immediate action plan by the ER. He or she decides who has to complete the action plan, if it will be completed by him or herself or if it needs the approval of the ESM. After the immediate action plan is registered, it could require the approval of the Working Center Manager or in the other case, it will launch a Corrective Action process immediately. After the corrective action process is launched, the system will monitor if a corrective action has been completed within 15 days. If not, the system warns the ER. Once the corrective action is performed, the ER must evaluate the effectiveness of the action. If it is not effective, a new Non Conformity process is launched. If it is, the Working Center Manager is informed and closes the process.

A total of 72 processes, most of them with similar complexity, were designed and deployed and are currently running in the environmental management system of the Toyota dealers.

Organization

There are four types of employees using the system:

  • Toyota corporate affairs users, who encourage the use of the system among the dealers, and who analyze the KPI’s provided.
  • The Environmental System Manager, who monitors the activity and support the dealers.
  • Every dealer’s Environmental Contact, who performs the actions needed for its working centers.
  • Every dealer’s Manager, who is informed about the actions taken and approves those actions that need an economic expense or modification in his Working Center.

For the corporate affair users, the use of the BPMS provides them the information they need to evaluate the degree of compliance to the environmental policies established. Without the BPMS it would have been very difficult to obtain KPI’s and to know in real-time what the status was in each dealer regarding environmental matters.

For the Environmental System Manager, the BPMS is the way to keep all information up-to-date, and to easily receive all alarms and warnings. Without the BPMS, the alternative would be a large collection of unmanageable spreadsheets, a large database with difficult indexing for storing records, and a large collection of reminder notes, which would have been impossible to manage. Furthermore, there is the complexity to know which legal requirements apply to every working center. Toyota only has one person managing the environmental system of more than 200 dealers. Without the BPMS, more people would have absolutely been needed.

For every Environmental Contact, the system provides a portal where he can know what actions are needed, can make requests for support, and can store the records that substantiate best practices. Without that, he would have needed his own spreadsheets, database and notes without the support of a structured document repository. It should also be noted that in some dealers this job responsibility is shared with other duties by the same employee, so the more work that can be handled automatically for the ER, the more the project is valued by the dealers.

For every Working Center Manager, they can have a clear view of the status of their Working Center, using a tool that provides complete traceability and keeps all of the actions approved or not and all the communications with the headquarters, so again, BPM is reducing the burden on the organization.

Hurdles Overcome

Management

The most important hurdle anticipated at the beginning of the project was how to involve the dealers’ owners. Within an organization, enforcing policies, processes and culture with all its employees is readily accomplished, but, how can this best be done outside the direct organization? How can a company convince more than 200 general managers working in autonomous dealer entities to adopt environmental practices according to the manufacturer’s wishes?

At the beginning of the project this was a concern and a special communication plan was created. The project was presented at a dealer’s convention, as a strategic plan of Toyota, outlining the benefits for the dealers. In addition, the corporate affairs personnel, along with the account managers of Toyota, worked together to convince and involve every single dealer, and visited them personally as needed. Throughout the project, regular dealer status meetings were held at each location in order to present the project status to the staff, including updates on dealers that have received their certification. Currently, regular workshops are held in several cities across Spain, allowing dealers that are using the system to orient new dealers that are not yet on the system. Through the support of Toyota, its certified dealers, and the participation of the consultants who built and help to maintain the system, these workshops help new dealers get answers to their questions and allow them to make suggestions for future enhancements.

Business

The business processes automated with the BPMS can be complex, but close attention was kept to keeping forms simple for the users and to maintaining a high level of usability for the system. After three years of use, experience has taught us that some processes can be improved, making it conceivable that the system can be made even easier to use in the future. During the last year, four processes have been modified to improve usability, and the other ten processes are planned to be modified in the coming months. As a result of Toyota’s strong corporate support and promotion of the project, many major hurdles have been overcome.

Organization Adoption

As explained earlier, Toyota has demonstrated its leadership in environmental practices, particularly with the BPM project which has served a strategic initiative for the corporate office. Throughout the project, the organization as a whole has adapted to the project guidelines very quickly throughout its corporate culture. In addition, a special staff of Toyota Spain employees was created under the supervision of the Corporate Affairs Manager, including Corporate Affairs Staff, Quality Staff and an outsourced Environmental Manager for the dealer’s network provided by the consulting firm. This staff has enough authority on the project, that if there is a dispute, the special staff’s authority supersedes the authority of the dealer’s account manager. Before the project deployment, internal presentations were made with the participation of the CEO and the worldwide headquarters deputy. This organization provided the right communication with the dealers and eased the dealer’s adoption to the organization culture.

Benefits

The BPMS project can’t be compared to previous systems that didn’t exist, but we can imagine a comparative scenario using other tools to manage the system, one case using traditional single tools like spreadsheets, document folders, etc. and another case leveraging the development of a custom portal solution.

A primary benefit or requirement was to have a low total cost of ownership, including minimum cost to acquire and to maintain the system, the minimum number of people to manage the system and, equally important, the minimum time to deploy the system which implies the minimum opportunity cost.

Figure 2 shows the metrics comparative.

Metrics Description BPMS Single Tools 1 Custom Dev. 2 Cost Saving Vs. 1/Vs.
Number of people needed to manage the system for 250 centers (Assuming 1 person for 10 working centers) 1 25 1 2.400 %/---
Number of hours to obtain and aggregate KPI per month (not including working centers data registering) 4 500 4 12.400 %/---
Time to deployment, not considering opportunity cost 9 months 3 months 24 months (66,67) % /166,67 %
Num er of hours of system evolutionary maintenance per year, including training to final users 100 1000 500 900 % /400 %
Number of hours of system preventive and corrective maintenance per year 40 100 160 150 % /300 %
Investment needed to build the system, including training of final users 1 0,1 3 (90) % /200 %
Investment needed in infrastructures provided by working centers 1 10 1 900 % /---

Figure 2. Comparative time and costs between different scenarios.
Source: AUREN

Best Practices, Learning Points and Pitfalls

7.1 Best Practices and Learning Points

  • The creation of a project committee to sponsor the effort inside its organization and partners, with a close attention paid to project success and the support of senior management.
  • The external support of a consulting firm with expertise in processes and technology.
  • The detailed analysis of every process before its deployment.
  • The implication of the final users along the project life cycle.
  • The splitting of the users in several groups according to their profile.

7.2 Pitfalls

  • The power of the system leads to an extensive number of KPI’s, from the point of view of the amount of data produced by the users and the amount of data to analyze. Actually, the number of KPIs managed has been reduced.
  • Some processes where tedious to some users without environmental culture. These processes have been simplified.
  • The capacity planning for the records database repository was too limited. In three years the resolution available from picture devices such as cameras and smartphones has increased by 5 times, which has increased the data storage requirements, while most users don’t mind photos taken at a low resolution. The process and database servers have been extended to support these new requirements.

Competitive Advantages

All automobile manufacturers are actually positioned to be environmentally conscientious, but only Toyota has really extended its philosophy to their dealers network. To maintain a leadership position in selling cars around the world requires many aspects to the business, but keeping this position requires a complete and never wavering commitment to environmental needs. Many manufacturers promote best practices along their dealer’s networks, but only Toyota has provided a BPM tool to them, helping them to more effectively obtain individual certifications.

This experience in Spain has been very well received by Toyota headquarters in Europe, and it can be exported or leveraged by other subsidiaries in other countries. Due to the current recession, any good cost-saving initiative helps. Perhaps it is not the best time for car manufacturers to invest, but with the position of Toyota in environmental matters, it is helping them maintain its leadership in car sales. In addition, the project was presented to the Spanish ministry of industry and won an important economic award to help those dealers that joined the project, as a result of the important cost reductions and environmental benefits they contributed. In this manner, all the dealers that joined the project acquired the system for a very small investment, but with significant benefits.

Technology

When Toyota decided to carry out the project, the consultancy firm AUREN recommended AuraPortal BPMS as the platform to support the environmental system. Toyota evaluated another solution, offered by an ISO certification company, but the amount of customizations needed eliminated this option. Thus, AuraPortal BPMS was selected for the project. AUREN is a leading AuraPortal Partner in Spain, and decided to use AuraPortal BPMS in its projects due to the fast time to deploy the solution while offering a very high level of functionality and a very close and collaborative partner, regarding technical consulting and technical support.

A flexible self-maintained BPM technology was the basic foundation for determining the functionalities required for the Toyota´s BPM solution. The selected product was AuraPortal Enterprise Management platform including a full BPMS (Business Process Management Suite), considered by BPM industry experts as the world’s most advanced, complete and easy-to-use; an Extensive document management facilities containing automatic generation of intelligent documents with automatic signatures and an agile file system; a new concept of CRM (customer relationship management) based on process patterns including ‘marketing automation’ with tailored marketing campaigns and sales opportunities follow-up; an enterprise content management system (ECM) with powerful publishing and broadcasting possibilities; and a revolutionary system for creating, by the user, an online commerce platform in his own web site including shopping cart and payment processing gateways; all without the need of any programming experience required.

A unique feature that differentiates AuraPortal is its automatic, on-the-fly conversion of modeled processes into executable processes without the need of any IT intervention or programming code, leaving the full control of the process creation and maintenance in the hands of business people. This core concept presents three advantages:

  1. Eliminates the traditional communication difficulties between business people and IT people when designing and modifying processes.
  2. Guarantees the right design and execution of all processes with no programming errors, therefore providing robust operations and processes that exactly fit the requirements of business executives.
  3. Dramatically reduces process development time (and cost), with the ability to make process models changes easily, rapidly, and with immediate effect.

The executable model of any process is carried out using a diagramming tool based on Microsoft Visio and BPMN standard notation. Only some data such as the roles of the process performers and the forms design for each task needs to be defined before the process enters into execution mode. The automatic generation of executable processes directly from the model could lead one to think that the system is only applicable to simple processes. The vendor has demonstrated however, directly and via large customers using AuraPortal for several years with tens of thousands of users, in thousands of concurrent processes that the most complex processes (that in some cases are beyond the reach of other BPM products) run smoothly, with high performance, and that are error free.

The Technology and Service Providers

AUREN was the consulting firm selected by Toyota to design and implement the environmental management system and the BPMS solution. AUREN is a leading consultancy firm in Spain, the first domestic professional services firm with other business divisions in Auditing and Advising, and with offices in other European countries and South America. AUREN is providing the technology infrastructure from the system, using it’s own datacenter with a virtual server architecture, hosted by a prestigious provider: COLT TELECOM. This avoids the need for Toyota to invest in servers, communications, and security. More information about AUREN can be found at www.auren.com.

The BPMS used is AuraPortal BPMS. AuraPortal is a global BPMS (Business Process Management System) provider, delivering a solution that creates Business Process Workflow Execution Models without the need for IT programming. The AuraPortal solution has been proven in a variety of industries including: manufacturing & distribution, financial services, professional services, health care and federal and local government sectors.

The AuraPortal solution typically complements an existing ERP or CRM system, and is most beneficial in developing business process workflows across multiple disparate systems. AuraPortal is 100 percent Web-based, 100 percent Microsoft-based, and is complementary to existing ERP and CRM systems.

AURA has a presence in 50 countries with more than 400 customers including, among others: Coca-Cola, PepsiCo, Frito-Lay, Toyota, Yamaha, Petróleos Mexicanos (PEMEX), Carrefour, ArcelorMittal, Eletrobrás, Saras, Royal KPN, Bristol-Myers Squibb, Sodexo, etc., as well as a many Government Agencies and Departments in several countries.

More Information about AuraPortal can be found at www.auraportal.com

Copyright: This case study was originally published in the Excellence in Practice series in the book entitled “Delivering Competitive Advantage” published by Future Strategies Inc. ©

Nathaniel Palmer
Author: Nathaniel PalmerWebsite: http://bpm.com
VP and CTO
Rated as the #1 Most Influential Thought Leader in Business Process Management (BPM) by independent research, Nathaniel Palmer is recognized as one of the early originators of BPM, and has led the design for some of the industry’s largest-scale and most complex projects involving investments of $200 Million or more. Today he is the Editor-in-Chief of BPM.com, as well as the Executive Director of the Workflow Management Coalition, as well as VP and CTO of BPM, Inc. Previously he had been the BPM Practice Director of SRA International, and prior to that Director, Business Consulting for Perot Systems Corp, as well as spent over a decade with Delphi Group serving as VP and CTO. He frequently tops the lists of the most recognized names in his field, and was the first individual named as Laureate in Workflow. Nathaniel has authored or co-authored a dozen books on process innovation and business transformation, including “Intelligent BPM” (2013), “How Knowledge Workers Get Things Done” (2012), “Social BPM” (2011), “Mastering the Unpredictable” (2008) which reached #2 on the Amazon.com Best Seller’s List, “Excellence in Practice” (2007), “Encyclopedia of Database Systems” (2007) and “The X-Economy” (2001). He has been featured in numerous media ranging from Fortune to The New York Times to National Public Radio. Nathaniel holds a DISCO Secret Clearance as well as a Position of Trust with in the U.S. federal government.