"This target has been successfully achieved for the start up of production," says Henry Pretorius, Senior Vice President Product Development and Procurement.
"This significant milestone has been achieved together with the 'cost-down' and high quality requirements associated with the IMV project and with the huge benefits of adopting the TPS (Toyota Production Systems) manufacturing philosophy and a true 'just-in-time' manufacturing regimen.
"Key to the success of the supplier globalisation programme for this project in South Africa was the quality of the local supplier base and its willingness to shift up a gear under the guidance of Toyota Motor Corporation.
"With the announcement that Toyota South Africa was to become a manufacturing base for certain models in the IMV range came a commitment to supplier development and the forging of new global alliances.
"The end goal of affordability driven by cost savings together with high quality expectations meant that South African suppliers had to go head to head with established globally competitive suppliers from the Asian region, particularly Thailand, and achieve price and quality parity without the support of a weak currency.
"The achievement of the 70% target for local component took an immense amount of work and commitment but the fact that it has been done indicates Toyota's resolve to support the local economy.
"The higher component volumes generated by the IMV project has provided much needed job opportunities throughout the component and logistics supply chain nation wide.
"The new Hilux, as an element of Toyota?s global IMV project, went into production with the highest number of local components for a South African produced Toyota ever.
"Some 1 600 local components are sourced from 78 suppliers in South Africa with 58% of these situated within a 30 km radius of Prospecton.
"South African suppliers with global links have had a distinct advantage in the process as they have access to existing technologies and supplier relationships as well as raw material purchasing power and access to copy tooling.
"Despite this a number of local suppliers have risen to the challenge and globalised their outlook to enter the IMV supply chain.
"With Europe as a designated export market for the IMV products manufactured in South Africa, these products have to comply with the environmental requirements of that market, including the promotion of a 'Green Purchasing' policy for components.
"All parts sourced locally comply with the End of Life (ELV) recyclability requirement and all banned substances and SoCs (Substances of Concern) have been removed from the material content.
"The local components industry is being led down a path of rapid change where global strategies will become dominant.
"The traditional way of doing business where the supplier quotes on a supplied drawing for a component is a thing of the past. Now, increasingly, Toyota Motor Corporation?s designers are looking to the supplier to provide innovation in design and technical inspiration.
"South African component manufacturers will have to rise to this challenge.
"During the build up to production of the IMV Toyota has continually reinforced three defined pillars for success in this new, model relationship. These are Cost, Quality, and Stable Supply.
"Supplier development has been a top priority with executives from suppliers receiving training at both Toyota South Africa and at TMC in Japan.
"Locally the Supplier School for Training and Development was established under the umbrella of the Toyota Academy in 2004 with the primary aim of improving supplier production and quality capabilities to support the all important IMV programme and other future models.
"To date 237 supplier executives and managers have received Toyota Production System training at the Academy. In addition six supplier executives have attended a Kaizen executive training course with Toyota in Japan.
"There has been an intense focus on evaluating core suppliers production and quality capabilities.
"Suppliers have been hosted on benchmarking visits to local facilities where WCM (World Class Manufacturing) are in place and specialists from TMC and Toyota South Africa have been made available for deployment at suppliers to assist with production and quality preparation for the ramp up of IMV production."
In addition to this, suppliers, a number of them situated quite a distance from Prospecton, have had to adapt to a strict just-in-time delivery regimen where very little stock in process is carried.
"Niël Cronje, Vice President Production Control and Logistics, explains: "The IMV project has seen us adopt a first world system for parts inventory and supply management with high levels of flexibility and cost efficiencies together with very low stock in process levels.
"Our system generates an order on a supplier with just a three day lead time and all supplier orders are generated in an identical format. This order is based on an advanced six month production forecast with orders placed daily.
"Our objective is to achieve a level of parts supply to the line that exactly matches the rate of build.
"This will mean virtually no parts stagnation in the assembly area. This allows us to build precisely the right vehicle at the right time as per Toyota's global supply systems.
"The entire process revolves around frequent deliveries of consolidated parts consignments to our receiving area and to the line itself irrespective of the location of the supplier for the component.
"Imported components are now received in two container shipments a week with a 95% on time delivery expectation. At peak production we will be receiving as many as 690 12 metre equivalent containers every 8 to 10 days from overseas suppliers. Local supplies will add as many as 25 further containers a day.
"Naturally the higher the expectation in terms of parts supply efficiencies the more sophisticated the control systems need to be. For this reason we are implementing a new Toyota proprietary inventory control system in place of the SAP system we have been using up to now.
"Inventory management has taken on a new meaning with the IMV project. Not only is the ordering and delivery process standardised but so to is the packing of components.
"All suppliers now ship to us in a Toyota global standard parts bin of which we have had to purchase 50 000 from Turkey for our initial requirement. These allow us to optimise volumetric efficiencies for shipping.
"Our move to this state-of-the art inventory system and the associated production controls is a major step forward in the globalisation of Toyota South Africa and in our ability to reduce production costs in line with the affordability requirement of this new model.
"The new systems have also provided new job opportunities with 100 new staff members added to the payroll in this area. This is over and above the 800 line workers added for the second shift."
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