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Implementation of environmental management system in automotive industry

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    This survey begins with a historical background of the environmental direction system in automotive industry. This is followed by a elaborate literature reappraisal of environmental direction system in automotive industry and its execution. Then, six instance surveies of car fabricating companies of changing sizes are analyzed and compared ; following are the chosen companies and their choice standards. Toyota, General Motors and Ford, were chosen because they are the current market leaders. Hyundai and Fiat were chosen because of their position as stable international companies who have been in the car concern for many old ages. Maruti Udyog Ltd, based in India, was chosen based on its growing potency and its position as comparatively new to the industry.

    These six companies have been analyzed in footings of their acceptance of environmental direction system. The scrutiny of the industry as a whole and of some of the major participants in the industry provides a good model within which insightful decisions can be derived about the current province and hereafter of the automotive industry.

    In the decisions and recommendation subdivision, we identify and describe properties of successful companies who are dedicated to accomplish the ends of environmental direction system.

    New challenges, the study concludes with the recommendation subdivision, which provides a anticipation of the near-future success of each of the analyzed companies, different companies considered in this study: Toyota, Ford, General Motors, Hyundai, Fiat and Maruti. Of these companies, we conclude that Toyota seems to be keeping up the best. Toyota stands out as being best positioned for success in the close hereafter and dedicates itself to the full for environmental direction system, while GM, Ford and Hyundai will most likely continue to be successful. And although presently successful, it is much more hard to foretell the hereafter success of Maruti Udyog.

    Chapter 4


    4.1 Introduction

    Environmental direction system provides a model for the organisations to pull off their environmental personal businesss efficaciously. It can be described as a plan of uninterrupted environmental betterment that follows a defined sequence of stairss drawn from established undertaking direction pattern and routinely applied in concern direction. ( Cary C. & A ; Jennifer N. , 2001, p-1-5 )

    An Environmental Management system aid to do environmental patterns more crystalline, so the organisation can streamline their client ‘ scrutinizing procedures and pass on to employees, direction and stakeholders, which is the pattern of sound environmental direction. ( Gil Friend, 2009 )

    Writer farther stated that the quality of merchandises produced and delivered to the client and rating of influence, both of these merchandises and of activity carried out on the environment play a cardinal function in the universe free-market economic system. To fulfill the client demands in a uninterrupted manner, accomplishing good quality on a regular basis and attention of the environment give good economical consequences. This is non merely a individual accomplishment but uninterrupted repeats of earlier set quality degrees show that the company is technically competent.

    From the last few decennaries work has been carried out to convey the concern patterns in conformity with environmental ordinances and other green thoughts. To accomplish the ends the direction has to reexamine the fabrication schemes and to optimize their utilizations of tools and resources. There are different direction doctrines which could be implement in the fabrication company to cut down wastes. ( John Cammell: 1992 )

    World Class fabrication has been defined as blend of Just in clip ( JIT ) , entire quality direction ( TQM ) , employee engagement, preventative care patterns, computing machine integrated fabrication, strategic direction and other attacks. ( Flynn, Salakibara and Schroeder 1995 )

    Like Just-in-Time, this has its beginnings in the Toyota Company in Japan. Originally it was referred to the production of goods to run into client demands, precisely in clip, quality and measure. But now it is closer to intend production with minimal waste. Here “ Waste ” is taken in its most general sense which includes clip and resources every bit good as stuff. JIT fabrication has the capacity, if adapted decently by the organisation, to beef up the administration ‘s fight in the market place significantly by cut downing wastes and bettering merchandise quality and efficiency of production. ( Yasuhiro Monden, 1993 )

    In the beginning, many companies put together their ain system to run into the demands of a continually altering environment. As clip passed, dismaies began to sound around the issue of trade. In response to that The International Organisation for standardisation ( ISO ) start work with big figure of experts to make the 14000 series of ISO criterions for Environmental direction. These criterions are the continuity of ISO 9000 series for choice direction, released in September 1996.

    The aim of ISO 14001 was to supply companies with a manner to incorporate planning, processes, operations, resources and duties in order to accomplish specified environmental aims.

    EMS starts with a committedness by senior direction to develop a system which will pull off the company ‘s impact on the environment. These could be negative facets, such as emanations, natural stuff ingestion, energy ingestion and land usage, every bit good as good facets, such as energy production, environmentally friendly merchandises, and recycling. These senior direction should hold the proper apprehension of the EMS, if they have the proper apprehension so the workers who work under them should be good trained to cognize their duty in their countries and there should be appropriate communicating mechanisms to supply the necessary EMS information to the appropriate employee. ( Wilson and Sasseville p-64-75 )

    Environmental direction system certification are the most of import portion, it gives consciousness to the employee about the demand of the system, how to accomplish the concern environmental marks and aims and to enable the rating of the system and environmental public presentation. The EMS paperss should include the environmental policy, aims, and marks, the manner by which environmental aims and marks can be achieved, description of cardinal functions, duties, and processs, the location of and agencies to recover certification and other relevant elements of the concern ‘s environmental direction system. The paperss system will necessitate periodic reappraisal, any needed alteration and blessing from the authorised authorization prior to publish. Keeping record and good certification certifies company ‘s grounds of fulfillment and its committedness to environmental virtue. ( Voorhees, toilet 1998 p-219 )

    ISO 14001 besides require some exigency programs and process to unexpected or inadvertent incidents. And besides companies should make some process, to forestall or minimise the environmental impacts which rise from those incidents. After these incidents or exigency state of affairss, should maintain the record of each and every incident which will assist to forestall those sorts of incidents.

    There is no packaged EMS exist for companies. It is the procedure to pull off the environmentally related elements of concern. It must be adopted harmonizing to companies demands and must be develop and implement in that mode that it works for company ‘s concern and the direction attack towards it.

    For understanding the Environmental direction system, one should cognize the rules of ISO14001, An organisation should:

    Specify its environmental policy and guarantee committedness to its EMS

    Explicate a program to carry through its environmental policy

    Develop the capablenesss and support mechanism necessary to accomplish its environmental policy, nonsubjective and marks.

    Measure, proctor and measure its environmental public presentation.

    Review and continually better its EMS, with the aims of bettering its overall environmental public presentation

    4.2 The benefits of an EMS

    Environmental direction system ( EMS ) is a systematic attack to the direction of all of the environmental facets of runing a concern, organisation or any entity that has impact on the environment. Puting up and running an environmental direction system ( EMS ) can supply important benefits across a figure of countries in concern. By economic point of position energy preservation and waste decreases are obvious. While concern point of position, by execution of an EMS non merely better environmental public presentation but besides tends to hold an impact on merchandise quality, hazard decrease, employee satisfaction, safety and wellness and other public presentation factors that make a company stronger and more competitory. Tracking assorted parts of the EMS is the most of import portion of the EMS, which enable direction to do rectification and take necessary action to forestall future jobs, Gary W. and Dennis ( 1996: 66-67 )

    Chapter 5


    5.1 Toyota

    5.1.1 History

    Toyota Motor Corporation or Toyota in short, is a Nipponese car manufacturer. Toyota is the universe ‘s 2nd largest car manufacturer following General Motors ; nevertheless Toyota ranking is foremost harmonizing to its cyberspace worth, gross and net income. It is besides the lone auto maker to look in the top 10 of the BrandZ ranking. Toyota was founded in 1937 by Kiichiro Toyoda as a spinoff from his male parent ( Sakichi Toyoda ) ‘s company Toyota Industries to do cars. In 1934, while still a subdivision of Toyota Industries, it produced its first merchandise Type-A engine and its first rider auto ( the Toyota AA ) in 1936. It is headquartered in Toyota, Aichi and Bunkyo Tokyo, Japan. Toyota has the Financial Service division which provides fiscal services and besides creates automatons besides cars. The company along with the original Toyota Industries form majority of the Toyota Group. Toyota owns and operates Toyota, Lexus, and Scion, has a bulk shareholding in Daihatsu Motors, and has minority shareholdings in Fuji Heavy Industries, Isuzu Motors, and the engine, motor rhythm and Marine trade maker Yamaha Motors. The company includes 522 subordinates. Toyota Motor Corporation operates in the automotive industry worldwide. ( Matthias Holweg, 2006 )

    Figure 5.1: U.S. market portions – May 2008

    5.1.2 Tendencies in Toyota

    The unbelievable consistent of Toyota ‘s public presentation is a direct consequence of operational excellence. Toyota has adopted operational as a strategic arm. This operational excellence is based in portion on tools and quality betterment methods made celebrated by Toyota in the fabrication universe, such as thin fabrication ( riddance of waste in every country of production including client dealingss, merchandise design, provider web and mill direction ) , Just in clip ( it is a method of waste riddance by which the stock list degrees are minimized ) , Kaizen ( uninterrupted betterment in fabricating procedure ) , one piece flow, Jidoka ( “ mechanization with a human touch ” it ‘s a quality control procedure ) and Heijumka. These techniques helped engender the “ thin fabrication ” revolution. But tools and techniques are no secret arm for seting into pattern these tools, it is the concern scheme based on its milieus of people and human inspiration, David M. ( 2007:163-170 )

    Toyota adopted different doctrines in its fabrication system to cut down the wastes. Taiichi Ohno laminitis of Toyota Production System ( TPS ) said it even more exactly. “ All we are making is looking at the clip line from the minute the client gives an order to the point when we collect the hard currency. And we are cut downing that clip by taking the non value added wastes ( Ohno, 1988 ) ” . ( Jeffery K. Liker, 2006, p 54 )

    Writer farther stated that Ohno regarded waste as a general term including clip and resources every bit good as stuff. He identified a Numberss of beginnings of waste which he felt should be eliminated:


    Time spent waiting


    Processing clip



    “ Just-In-Time ” being ab initio known as the “ Toyota Production System ” . Toyota developed the TPS after World War II at a clip when it faced really hard concern conditions so FORD and GM. While Ford and GM used mass production, economic sciences of graduated table and large equipment to bring forth as many parts as possible, every bit cheaply as possible. The Toyota Production system is a alone and alone. The Toyota Production system is a series of activities that promote cost decrease through the riddance of waste to accomplish enhanced productiveness. ( David J. Lu, 1989, p-31 )

    TPS explained to the directors in many environment how to better their concern dramatically by

    Extinguishing otiose point and resources

    Constructing quality into workplace systems

    Finding low cost but dependable options to expensive new engineering

    Absolutely concern procedure

    Constructing a learning civilization for uninterrupted betterment

    Harmonizing to Ohno each determination should be based on these rules “ Can the cost truly be lowered? ” and “ Can this action help the company ‘s overall public presentation ” ( David J. Lu, 1989, p-32 )

    The two pillars needed to back up the system are:

    Merely In Time

    Jidoka/Autonomation, or mechanization with human touch

    Merely -in-time means that in a flow procedure the right parts needed in assembly make the assembly line at the clip they are needed and merely the sum needed, and by accomplishing this flow throughout can near zero stock lists.

    Jidoka/ autonomation thought was originated with the innovation of an auto- activated weaving machine by Toyoda Sakichi ( 1867-1930 ) , laminitis of the Toyota motor company. At Toyota, a machine automated with human touch is one that is attached to an automatic fillet device. Most machines in Toyota workss are equipped with these devices every bit good as different safety devices, fixed place fillet, the full work system, and Baka-Yoke sap proofing systems to forestall faulty merchandises. In this system no operator is needed while the machine is working unless the machine stops working because of unnatural state of affairs, which needs human attending. This will ensue in cut downing the operators and increase production efficiency. ( Taiichi Ohno, 1988, p-4-5 )

    Cars are playing an of import function in the development of today ‘s and future society ; it has besides imposed a certain impact on the environment. Toyota is to the full cognizant that the car is the valuable tool in twenty-first century, that ‘s why more concentration is paying to those countries which affect the environment and those win in this country will be acceptable to society. Toyota is working on precedence footing through environmental direction in all countries and wants to go a leader of planetary regeneration through its attempt in environmental engineerings to guarantee that its merchandises are accepted and good received around the universe. ( Toyota Report: 2004 )

    Toyota besides started its ain system of appraisal that it calls Eco-VAS ( Eco- Vehicle Assessment System ) . Under this appraisal the procedure start at the beginning of the planning. The interior decorator of the vehicle should hold to turn out foremost that this undertaking would fall under environmental impact decrease marks. This system see fuel efficiency, emanations, and noise control during usage, the disposal recovery rate, the decreases of substances which are unsafe to environment and C dioxide emanation throughout the full life rhythm of the vehicle from production to disposal, Eco-VAS has been introduced on all new vehicle theoretical accounts and redesign since 2007.Toyota besides applies life rhythm appraisal to its packaging design. In 2007, it co-developed and began utilizing the Environmental Packaging Impact Calculator ( EPIC ) to quantify and measure the environmental impacts and fiscal costs of boxing systems used at logistics sites. ( Brian Black, 2006 p-177 )

    Toyota fabrication sites have taken their EMS one measure in front by heightening EMS ( eEMS ) . It is the first planetary enterprise taken by Toyota ( Japan ) .

    Toyota ‘s fabrication operations have minimized impact on the environment through action programs, enhanced environmental direction systems and eco-plant programs. This theoretical account works in North America will get down operating in 2010. This cutting border works will run an advanced assembly line. The works ‘s eco-plant program has been completed, and includes step to cut down CO2 and VOC emanations, cut down H2O ingestion, achieve zero waste to landfill, and manage waste by presenting reclaimable merchandises.

    5.1.3 Employee Training:

    A common look heard around Toyota is “ We do non merely construct autos ; we build people ”

    Toyota give preparation to all its employees in EMS consciousness and in some functional subjects like risky waste disposal is critical to the continued success of the EMS, and ability to accomplish prima degrees of environmental public presentation. And this is all because of strong EMS that promotes continual betterment. To understand the preparation and development scheme in the Toyota civilization, we have to separate the functions and maps of each bed of the organisation. There are four degrees: Team member, squad leader/group leader, director, and general manger/vice president. ( Jeffrey/Michael 2008 p-137-138 )

    If any fluctuation comes into standardize work, the squad leader come into action and by utilizing their job work outing accomplishment to work out the job and convey the procedure into criterion. For the betterment of this sort of accomplishment for the squad member, squad leader focuses chiefly on work topographic point organisation, standardised work, job resolution and more job resolution. Training at Toyota builds upon itself bed by bed. The squad leader learns the basic organisation foundational tools. Adding the Toyota Job Instruction as a tool by the squad leader, it begins to teach the job work outing procedure. Teamwork accomplishments and communicating are besides added to into acquisition of these tools in order for the values and trust to be reinforced during the betterment procedure. If there is common regard and trust is established the job work outing improved.

    Figure 5.3: Toyota Training and Development Strategy: Functions, Focus & A ; Tools beginning: Toyota civilization, the bosom and psyche of Toyota manner

    There are some preparation institute which are developed by Toyota in January 2002, at Toyota ‘s central office. It runs two plans – one for developing planetary leaders and other for the developing planetary trainers capable of teaching other associates in Toyota manner footing like job resolution, on the occupation preparation and policy deployment. Other institutes are Global Knowledge Centre, Global production Centre, University of Toyota. These all institutes provide preparation and instruction both at managerial every bit good as lower degrees. Emi O. , Norihiko S. , Hirotaka T. 2008, p 35-37

    5.1.4 Action guidelines

    Toyota has a strong action program sing the environment. It is the basic demand for Toyota workss that they must follow to acquire the expected corporate image. Toyota identified four chief issues which are expected in 2020-2030. The subjects are: Global/Energy warming, Recycling of resources, substances of concern, Atmospheric quality. Solutions have been adopted and implemented for each subject in its all countries of activities. Key points can be identified for those solutions: CO2 emanations direction, riddance of substances of concern, support of environmental direction by concern spouse, and to develop a recycling based civilization. ( De Craecker F. De Wulf L. , 2009 )

    Toyota besides made amendments in the “ Toyota Green Purchasing Guidelines ” . This is a item papers which remarks on green values, regulations, outlooks sing to its supply concatenation. This papers is circulated to all providers who must follow with what is written.

    Toyota ever concerned about the environment Challenge accomplishing zero emanation at all phases i.e. production, use and disposal. Implement exhaustively preventative steps i.e. Prior-assessment systems.

    Toyota give preparation to all its employees about environmental consciousness and other environmental related subjects like, waste disposal, risky stuffs managing, exigency response. Toyota besides installed within company an Eco-point system. This is a system in which employees make suggestions about how the company could cut down the energy needed, conserve the environment and the company reward good ideas/suggestions with points

    5.1.5 Steering Principles and 2010 Global Vision

    Toyota Motor Corporation ‘s Guiding Principles and the 2010 Global Vision supply a model for puting long-run concern ends and policy. The Steering Principles include supplying clean and safe merchandises and developing advanced engineerings. The Global Vision is a set of long-run policies with the subject of invention into the hereafter, expecting a passage to a recycle-oriented society on a planetary graduated table.

    5.1.6 The Earth Charter and Environmental policy

    In January 1992, Shoichiro Toyoda presented his basic Toyoda rules, and in 1997 somewhat revised edition published. Toyota for the really first clip clarifies its relationship to clients, employees, concern associates and other stakeholders. These Basic rules formed a long term vision, a medium and long term concern program and long and short term corporate policies. ( Jeffrey K. Liker: p-55 )

    In the same month and twelvemonth, January 1992, Toyota besides published Toyota action program for Global Environment, normally known as the Toyota Global Earth Charter. This Earth Charter specifies how environmental policy would be reflected in company activities. ( OECD: 2002, p-207 )

    The cardinal policies of the Charter and action Plan are the followerss:

    aˆ? To lend to a affluent society in the twenty-first century society

    aˆ? To develop environmental engineerings

    aˆ? Take action voluntarily

    aˆ? Work in co-operation with society

    Figure 5.4: Toyota ‘s earth chart ( beginning: book ; How Toyota became # 1 )

    After publication of basic rules in 1992, the Toyota ‘s safety and environmental enterprises has been impressive. In December 1997 Toyota unveil Prius, the universe foremost intercrossed rider auto ( combination of gasolene engine and electric motor ) was the consequence of 1992 basic rules, this auto proves Toyota committedness to environment. ( Jeffery K. Liker, p-55 )

    5.1.7 Climate alteration

    Toyota supports the purposes of the Kyoto Protocol and will back up understanding. Toyota is good cognizant of the Global heating. The company see it as a precedence direction issue and implement this in all phases of vehicle development to cut down the energy ingestion and CO2 emanations. The production line uses batch of energy resources, to cut down the job Toyota build an eco-friendly edifices by utilizing alternate beginnings of energy such as air current, solar panels etc. It is the end of Toyota to acquire sustainable workss in close hereafter. In other words workss will be to the full equipped with natural resources. ( De Craecker F. De Wulf L. , 2009 )

    Writers further stated that Toyota improves the resource productiveness by recycling and reuse of waste. To accomplish nothing landfill waste in its production workss, Toyota recycles the full volume of fly ashes generated by its incineration furnace into natural stuff for cement fabrication. Toyota besides expanded the usage of returnable containers. It helped the company to cut down the entire usage volume of packaging by over 90 per centum. Toyota besides reduces substance of concern like lead. Mercury, Cadmium. Different steps have been taken to extinguish these substances from the vehicles.

    The transit system of goods and merchandises was besides the enterprise of Toyota toward become environmental friendly. Toyota switched most of its transit to inveigh, and uses high efficiency ships of bigger size to cut down their sum.


    5.1.13 Supplier environmental direction policy

    Toyota works closely with concern spouses like providers and traders. Toyota ‘s Green Supplier Guidelines were originally formed in 2000, and updated in January 2007.The guidelines set are fundamentally emphasis on applicable Torahs, ordinances and societal norms from the providers. Toyota advice their provider even goes beyond societal and legal demands and to set about activities that support Toyota ‘s environmental ends.

    Toyota is working closely with its providers to better environmental public presentation. For illustration, Toyota late began easing hoarded wealth Hunt with its providers to promote energy preservation consciousness throughout its supply concatenation. Treasure Hunts are energy salvaging or decrease events that Toyota is carry oning in its fabrication workss for old ages. A sum of $ 1.3 of economy has been identified during 12 provider Hunts conducted in financial twelvemonth 2008 by utilizing Toyota ‘s salvaging computation tool. One provider in California replaced their bulbs with high bay fluorescent lightening and decreased electricity demands by 126 Kilowatts with an one-year nest eggs of about $ 115,000.

    Toyota divided providers into three classs, harmonizing to their graduated table of environmental impact – low, medium or high – and specifies the timeframe for making each of the five degrees of the policy ( figure 3 ) .

    Figure 5.5 Toyota clip frame-five degrees of policy ( Sourcebook: How Toyota became # 1 )

    Toyota has over 1800 Toyota, Lexus and scion franchise in U.S. , Canada and Mexico. As a cardinal concern spouses, Toyota provide them with resources to assist pull off service-related waste watercourses and comply with environmental and safety regulative demands. Toyota provides them with figure of tools, including web based Environmental aid Network ( EAN ) and an on-line HazMat conformity preparation class, HazMat U.

    5.1.14 Recycling

    Toyota has installation of recycling of bit metal, it scrap 99 per centum what it generate. In add-on to this Toyota recycle waste stuffs like pigment dissolvers, plastics wraps, packaging and used oil as good. By presenting new procedures Toyota has the ability to recycle Cu glass, urethane froth and plastic made bumpers.

    While on the other manus Toyota find alternate ways to bring forth less waste, for illustration, roller being used for anti bit pigment alternatively of sprayer. By using this application Toyota save pigment, fewer emanations, halt using the plastic cover and lower the cleansing costs. This procedure reduces wastes by 40 %

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