IACT 422 - 02 - Toyota Business Plan

BUSINESS CASE
University of Wollongong
IACT422
Case Studies in I.T.
Name Student Email

Joseph Baez 2387256 jsb16@uow.edu.au
Nurhazman Abdul Aziz 2666182 naa925@uow.edu.au
Tee Young Chew 2524272 tyc95@uow.edu.au
Hoh Whay Loh 2400431 hwl97@uow.edu.au
Cong Xue 2809217 cx850@uow.edu.au
Course Coordinator: Dr. Aditya K. Ghose

Tutorial: Wed 9:30am to 11:30am
Document: Group Case Study
Date Submitted: 19th August 2005
Table of Contents
Executive Summary......................................................................................................................... 2
1. Introduction .................................................................................................................................. 3
2. Situational Assessment ............................................................................................................... 5
2.1 Critical Analysis .................................................................................................................................. 5
2.2 Problem description ........................................................................................................................... 11
3. Project Description .................................................................................................................... 12
3.1 The Business Needs........................................................................................................................... 12
4. Business Requirements............................................................................................................. 16
5. Solution Description................................................................................................................... 19
5.1 Solution Overview ............................................................................................................................. 19
5.2 Concept Overview ............................................................................................................................. 19
5.2.1 Identifying the domestics suppliers and service providers......................................................... 20
5.2.2 Current IT architecture, tools & technology platform................................................................ 21
5.3 Detail Solutions ................................................................................................................................. 22
5.3.1 Solution 1 (Toyota Australia Suppliers Website)....................................................................... 22
5.3.2 Solution 2 (Agent-Oriented Domestic e-Marketplace) ............................................................. 24
5.3.2.1 General overview ............................................................................................................... 24
5.3.2.2 Integration with existing systems ....................................................................................... 25
5.3.2.3 Agent-Oriented e-Marketplace........................................................................................... 26
5.3.2.4 Solution description / Scenario of the purpose e-Marketplace ........................................... 28
5.3.3 Solution 3 (Real Time Inventory Tracking Module).................................................................. 29
5.3.3.1 General Overview .............................................................................................................. 29
5.3.3.2 Solution Description........................................................................................................... 31
5.3.3.3 Scenario of proposed module ............................................................................................. 32
5.3.4 Solution 4 (An agent-based transport and logistics coordination system) ................................. 33
5.3.4.1 General Overview .............................................................................................................. 33
5.3.4.2 System Architecture ........................................................................................................... 34
5.3.4.3 Solution Description........................................................................................................... 35
5.3.4.3.1 Logistic optimisation within Australia ............................................................................ 35
5.3.4.3.2 Global Optimisation ........................................................................................................ 36
5.3.4.4 Scenario of proposed system.............................................................................................. 38
5.3.5 Integrating the Solutions ............................................................................................................ 39
5.4 Tools and Technology ....................................................................................................................... 40
5.4.1 Java Agent Development Environment (JADE) ........................................................................ 40
5.4.2 Components of the an Agent...................................................................................................... 41
6. The Challenges.......................................................................................................................... 44
6.1 Financial Analysis ............................................................................................................................. 44
6. 2 Development Cost ............................................................................................................................ 44
6. 3 NPV & ROI ...................................................................................................................................... 47
7. Challenges................................................................................................................................. 47
7.1 Financial Challenge ........................................................................................................................... 47
7.2 Organizational Challenge .................................................................................................................. 48
8. Feasibility................................................................................................................................... 49
8.1 Financial Feasibility........................................................................................................................... 49
8.2 Organizational Feasibility.................................................................................................................. 50
9. The Implementation Timeline .................................................................................................... 51
10. Recommendations................................................................................................................... 52
11. Conclusion ............................................................................................................................... 52
References .................................................................................................................................... 54
Appendix........................................................................................................................................ 56
Toyota Business Case
Executive Summary
The purpose of this business case is to identify initiatives, which aims to achieve optimal
supply chain processes of Toyota Motor Corporation Australia (TMCA) by solving the
current weaknesses which were covered in details. This also includes various missed
opportunities that TMCA could have capitalised on during the initial implementation of
the supply chain management. In order to bridge the current gap based on TMCA’s aim
of achieving an efficient supply chain, goals have been identified and initiated.
Subsequently, solutions are derived from the goals, which aim to solve the inherent
weaknesses of the current supply chain setups. Importantly, solutions put forward in this
business case have focused on the flexibility of accommodating “plug-in” to the existing
supply chain process, to allow for gradual system changes. Solutions have been suggested
in terms of efficiency and cost effectiveness to allow coordination and optimization by
applying agent technology. With each solution well illustrated with the aid of scenario, it
provides a better understanding on how these solutions can be applied. On the other hand,
with the understanding that exposing functionality and data as services across the
enterprise enables TMCA to reduce overhead by eliminating the need for infrastructure
duplication, an integrated solution which incorporates all the suggested solutions proves
feasible.
With solutions provided to face the challenge on solving the current weaknesses, these
however do not justify the closing stage of an efficient supply chain. Financial and
organizational challenges are the hurdles in the list to be solved. Thorough coverage of
inherent cost estimates of these solutions are shown that will allow the management to
conclude whether solutions presented herein will allow TMCA to obtain maximum
financial benefits in the shortest term. In summation, by demonstrating how these costs
can be converted into equivalent present day values which allows TMCA to achieve the
optimal Return On Investment (ROI), this business case ends with a conclusion of
proving the feasibility of the continuation of these solutions to achieve the business need;
an efficient supply chain.
2
1. Introduction
Supply chain management (SCM) aims to produce and distribute merchandise to

customers in the right quantities, to the right locations, and at the right time, with
minimized system-wide costs, while fulfilling service level requirements. Nevertheless,
the complexities of supply chain make it hard to accomplish the objective. Coordination
of the activities among supply chain partners is one of the critical challenges in the
management of supply chain network that is composed of organizations with different
and even conflicting organizational objectives.
It is useless to optimize the operations within a single party involved where the overall
system performance will still be poor. The coordination must be efficient and effective
such that the finest combination of decisions is made. These decisions include selecting
the right partners, transporter and supplier, purchasing the right amounts of material, and
producing the right finished goods. The task in establishing domestic and global
optimized solution involves a tremendous amount of decision making, and in numerous
cases decisions have to be made based on inadequate and dynamic information. This
causes the coordination and decision-making processes to be difficult, iterative and time
consuming.
Agents act autonomously on behalf of their users across open and distributed
environments. In recent years, many researchers have used multi-agent technology in
supply chain modelling and management. In agent-based modelling, organization units
and processes are designed as agents that have their particular objectives, behaviours and
interfaces. Agents exchange messages for communication and coordination purposes.
Intelligent decision and learning rules are defined in agents. Supply chain performance is
supposed to be improved by the coordination and collaboration between agents.
Due to the complexities in supply chain, the representation of the coordination of

activities, inter-organization interdependency, and the synergy of supply chain are
challenging issues. The application of agent technology in SCM is appropriate, especially
3
for the complex and dynamic supply chain environment. It is not enough to just use the
agent concept to model the entities and processes in a supply chain. There is a need to
provide method to describe complexities of supply chain interdependencies and
coordination mechanism, and also implement and test the concepts and design. The
combination of coordination technology and optimization technology is a way to improve
performance in an agent-based supply chain coordination system.
In this Business proposal, coordination theory, optimization technology and agent

technology is employed to model and automate the coordination process and to converge
at a “global best solution”. A framework and a set of techniques for agent-based supply
chain coordination and optimization in distributed environment are proposed to improve
the overall performance of the supply chain.
4
2. Situational Assessment
2.1 Critical Analysis
Toyota Motor Corporation (TMC) has taken the initiative to develop many innovative
systems from the current Toyota Production System to compete against other companies.
With the rapid increase of globalization and rapid technology, Toyota Motor Corporation
of Australia (TMCA) has to be up to date with its competitors, from the raw materials
suppliers, right across to the sales of its end products. Within each of the subcategories of
the supply chain, each of them has been provided with some form of IT to support and
improve legacy supply chain operations. Nevertheless, as previously identified, some
current systems, processes and the overall supply chain operation have their inherent
weaknesses.1
In assessing the situation that TMCA from the supply chain perspective, the following
weaknesses that the team have analysed are as follows:
Lack of alternatives in the domestic supplier base and risk of currency

exposure
A challenge that TMCA faces is the option of having one-hundred per-cent of its
prospective suppliers located as close as possible to its supply chain, as currently
only 79% of TMCA suppliers are localised. Many components have to be
imported causing the application of the “right part at the right place at the right
time” concept, or the JIT principle to fluctuate throughout the TMCA supply
chain.
Given that all of TMCA’s supplier agreements have to be obtained with the
approval of the TMC this lengthy approval process can cause a further decrease in
productivity in the supply chain. Without a relevant, reliable and constantly
updated list of approved alternative suppliers that TMCA can recruit in case of
1
Based on case study
5
unforseen events this lack of local suppliers can cause a complete halt of
operations for TMCA, leading to dissatisfied B2B as well as B2C customers.
Given this case scenario while also considering the small number of Toyota
vehicles currently produced in Australia, other similar supply chain interruptions
could be detrimental to the long term viability of Toyota’s continuation of its
manufacturing operations in Australia. TMCA’s lack of an e-business method to
recruit and integrate more suppliers and achieve its target of a 100% local supply
chain is undoubtedly causing unnecessary difficulties. The fact that TMCA lacks
a collaborative supplier-oriented system such as the one described on the Toyota
Motor Corporation Kentucky (TMCK) web site, it is clear that TMCA is being
held back from reaching its full competitive potential in the Australian
marketplace.
Additionally, without the full localisation of suppliers, currency exposure will

cause too great a financial risk for TMCA in the near future. Import costs and
extended time taken for components to arrive in Australia hinder TMCA’s JIT
system. A halt in the production of transmission axles at Toyota Motor
Manufacturing North America (TMMNA) in the United States (US) for example
has a direct impact on TMCA assembly lines. Most of TMC’s other subsidiaries
worldwide already have sound examples of the JIT process in place, and this is
due to their localised production process.
At present, most of Toyota Australia’s imported parts are from the US, Europe
and Japan. This means the combined cost to produce one vehicle is needlessly
greater than it would cost to produce entirely from the TMCA Melbourne plant.
The fact that those components also take longer to arrive the plant, excluding
schedule delays, causes too great an affect on the overall production costs and
time taken to produce a “locally produced” Toyota cars.
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Problems arising in linear supply chain
The JIT manufacturing process currently used by TMCA runs nowhere near as
efficiently as those of TMCs other worldwide subsidiaries, namely due to the
geographical expanse of the TMCA supply chain infrastructure. Each member of
TMCA’s existing supply chain link cannot currently communicate and interact
with other members further downstream. If TMCA continues running its supply
chain linearly, it will not keep functioning to a competitive schedule. In terms of
transport and logistics Toyota does not currently have a common e-market place
for all suppliers where they can collaborate in spite of TMCA’s involvement with
the AANX network. AANX currently only caters to non-key component
suppliers, that is to say components can be shared among other automotive
manufacturers.2 Key components suppliers on the other hand, those involved in
black-box components manufacturing, are not involved in e-commerce
transactions via the AANX network, as they have very close-knit relationships
with TMCA.
Domestically, with the existing linear supply chain, logistical requirements oblige
suppliers to have to wait until a vehicle is full before the required batch of
components can be dispatched. The lack of greater implementation of the “milk
run” procurement system as is used by the Isuzu3 truck company among various
others of TMCA’s competitors, are causing unnecessary supply delivery delays.
2
Based on case study
3
Isuzu Environmental Report 2004: Creating Environmental Sound Plants (Online)
[http://www.isuzu.co.jp/world/environment/report/pdf/2004e_11.pdf, Last Accessed: 02 August
2005].
7
Figure 1. Example of “milk run”

If this more efficient method of delivering parts as shown above is not
implemented in the near future, these unnecessary delays will escalate problems
with ongoing redundant supplier delivery expenses.
Over-reliance on forecast planning for production
The goal of JIT production is to translate each order to a finished quality vehicle
quickly and efficiently – in essence JIT is a pull system of operating. To do this
only small quantities of material are kept on production lines with the re-supply of
those items used occurring in the right amount at the right time. Additionally, the
Electronic Data Interchange (EDI) standard currently in place for the materials
requirements forecasting i.e. ANSI X12 830, is quickly becoming phased out to
encourage overall EDI standardisation. This means that an over reliance on the
current electronic “Kanban” systems could provide incorrect forecasting
information for required production.
8
Figure 2. Electronic Kanban EDI standard
More emphasis needs to be placed on a runtime system that will provide up-to-
the-minute information on what demands are required on all stages on the supply
chain. Nevertheless, it should be able to easily integrate into the existing BEA
WebLogic system being used by TMCA. If this runtime system is not put into
place and relying purely on forecast planning, the JIT system will face
inefficiency problems, leading to disruptions in the overall JIT production.
Lack of Vertical industrial relations environment
TMCA currently only has vertical industrial relationships with automotive

manufacturers in terms of sharing suppliers. However in regards to transport and
logistics, no collaboration has been achieved between automotive manufacturers.
The current situation now is all automotive manufacturers are utilising AANX to
arrange for shipment of their product by sending their information to the freight
companies.
9
Figure 3. Collaboration between vertical industries
The current system though does not allow optimisation as it is relying on the
freight company to do all the logistics planning. There is no common place for
collaboration. Nevertheless, it is common knowledge that most of the
manufacturers’ distributors reside in the same area. Only the automotive
manufacturer themselves will know the quantity required by the distributors. To
allow economic feasibility, manufacturers will wait till enough cars to fit onto a
truck before sending to the distributors (maybe from Altona all the way to
Darwin). If collaboration can be made even in terms of such logistic issues, it will
not only reduce cost of transport, but also reduce waiting time, maybe from a
month to two weeks for a car to reach the consumer.
Automotive shipments require specialised vehicle transport ships known as Roll-

on-Roll-off (RORO) ships4. Similar cost saving logistics benefits can be derived
from coordinating these specialised shipments of Completely Build-Up (CBU)
vehicles via a collaboration of vertical automotive industries. It will be
economically feasible for TMCA to collaborate with other automotive
manufacturers in Australia in terms of transport and logistics, meaning sharing
exclusive product demand data from overseas. Lack of such an industrial relations
4
K Line Australia: Car Carrier Services. (Online)
[http://www.kline.com.au/Service/CarCarrier.aspx, Last Accessed: 01 August 2005].
10
environment is currently making forecasting difficult as well as preventing

TMCA to capitalise on the resources of other automotive manufacturers who
would be willing to share their resources to cut down on their own expenses as
well as allow shorter shipment timeframes.
2.2 Problem description
From the above, it can be seem that the team have placed focus on analysing the current
discrepancy based on the weaknesses previously identified. Nevertheless, supply chain
management is being recognized as the management of key business processes across the
network of organizations that comprise the supply chain. While many have recognized
the benefits of a process approach to managing the business and the supply chain, most
are vague about what processes are to be considered, what sub-processes and activities
are contained in each process, and how the processes interact with each other and with
the traditional functional silos. Within TMCA, supply chain processes are supported by
modular software applications that integrate activities across organizations, from demand
forecasting, product planning, parts purchasing, inventory control, manufacturing and
product assembly to product distribution.5 Nevertheless, weaknesses were still being
discovered which prohibit the efficient supply chain processes. This therefore justify this
business case to provide solutions, which aims to improve the overall efficiency of
TMCA’s supply chain process.
5
Based on case study
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3. Project Description
3.1 The Business Needs
Every enterprise needs an efficient supply chain to produce and distribute merchandise to
customers in the right quantities, to the right locations, and at the right time, with
minimized system-wide costs. This also must be accomplished while satisfying service
level requirements. The supply chain can be viewed as an order chain in which its
partners propagate demand information by placing orders to upstream partners. The
effectiveness of meeting end demand of the whole supply chain depends on how well the
order chain is coordinated. After a detailed analysis of the current supply chain processes,
four weaknesses in regards to the overall process of the supply chain were found to be
impeding its efficiency. Nevertheless, it has been recognized that collaboration is one of
the key success factors of supply chain management. The life cycle of an order describes
different phases through which an order goes through. Basically these phases are
initialization, planning, execution and disposition. In order to reduce the occurrence of
the bullwhip effect, and improve the supply chain performance, it has been suggested that
supply chain partners share order information and collaborate in order planning.
To allow for an efficient supply chain process, the team has put forward a list of goals
that TMCA should achieve in order to improve on the current weaknesses identified.
Additionally, with the goals suggested by the team, specific solution is provided for each
of them, which the team agrees on these solutions to be of best interest for TMCA. The
goals suggested, together with solutions needed to be achieved are as follows:
Goal 1: Provide a comprehensive domestic supplier base
Due to the lack of domestic suppliers, many of TMCA’s car components have to
be imported causing the application of the “right part at the right place at the right
time” concept or JIT to lack the optimal efficiency throughout the TMCA supply
chain. For this reason, the implementation of a comprehensive domestic supplier
base is essential. This can be done by means of providing a website or a link to
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the current TMCA website which present similar content like the Toyota
supplier’s website in North America. This will allow TMCA to have a
comprehensive overview of their current suppliers. Additionally, it will also
reduce the red-tap involved to be part of the TMCA supplier. Most importantly, it
provides TMCA with a channel to disseminate important supplier related
information to its upstream entities.
Goal 2: Provide initiatives for a non-linear, hub-based supply chain system
TMCA acquires parts, materials and supplies from over 100 suppliers, who
themselves acquire materials from many other suppliers. The acquisition process
though can be slow, expensive and ineffective. Additionally, situation arises when
suppliers are located near each other, where ‘milk run’ could be possible within
these groups of suppliers. This allow transports to follow looped routes, made
quick, frequent stops, and picked up small batches of parts at several suppliers
within a region, before delivering orders to the Toyota plant which could be a
distance. These opportunities however have not been realised with the fact that no
coordination among suppliers have been established. Instead, only the current
electronic Kanban card system is currently the mechanism for ordering supplies
between TMCA and its suppliers. A linear supply chain is not able to efficiently
support the JIT productions as significant collaboration among entities within the
supply chain. For these reasons, an agent-based e-marketplace initiative will be
suitable. TMCA will be able to eliminate its existing linear supply chain system to
permit supplier collaboration and integration.
.
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Goal 3: Provide real-time updates on demand and supply allocation
With the current forecast planning strategy wholly determined by Toyota, it will
only allow suppliers to align their demand and supply in the mid-to-long term
planning horizon. Although it allows the overall supply chain to arrive at a
consensus of forecast or plan, nevertheless the common bullwhip effect which
causes erratic shifts in orders up and down supply chain will still be present.
Significantly, if each distinct entity makes ordering and inventory decisions with
an eye to its own interest above those of the chain, stockpiling may be occurring
simultaneously at as many as seven or eight places across the supply chain. Such
stockpiling can lead to as many as 100 days of inventory waiting “just in case”.
To resolve such situation, a real-time inventory tracking function should be
incorporated into the current electronic BEA system which enables suppliers to
manage and track the entire purchasing order lifecycle throughout the whole
supply chain. With such function, all entities will be able to manage and track, in
real-time, the complete end-to-end process for discrete, replenishment, demand
pull from order creation, acquiring information from the Toyota Vehicle Order
Processing System (TVOPS) residing in the main BEA WebLogic 8.1 system.
Goal 4: Vertical industry logistics collaboration
Increasingly, automotive manufacturers in Australia are concentrating on their

core competencies and outsourced their non-strategic operations to other parties.
Usually, the outsourced elements include transportation, warehouse management
and customers order fulfillment. Third party logistics (3PL) is one natural
outcome of this approach and enables companies to dramatically reduce the
burden of physical facilities, lower their cost, improve their responsiveness, and
gain logistics agility.6 These manufacturers share its inventory and a part of sales
order information (delivery notes) with its 3PL provider, but the 3PL provider
does not give any input to the manufacturer’s activities. Nevertheless, it is not
6
Based on Case study
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possible to attain optimisation of operations within a single party involved where

the overall system performance will still be poor. This causes the coordination
and decision-making processes to be difficult, iterative, inflexible and time
consuming especially in terms of logistics. To solve such intricacy, a forth party
logistics (4PL) by means of an intelligent logistic coordinating agent can be
applied in the form of a collaborative e-logistic hub, to conduct continuous
planning functions to permit real-time optimisation. This real-time adaptive
optimization will thus allow participating automotive manufacturers to achieve
complete logistic operation taking even the smallest constraints into account,
having multiple 3PL providers.
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4. Business Requirements
The driving force behind the efficient supply chain process is the ever-increasing market
pressure on responsiveness, cost efficiency, and the drastically shorting product life-
cycle. This efficiency is expected to bring significant cost improvement, customer
satisfaction, production innovations, increasing market shares by utilizing legacy
resources more efficiently and the deployment of new technologies throughout the supply
chain. Nevertheless, as previously identified, weaknesses are presents in the current
supply chain processes that impede its efficiency. To remedy the current inefficient
supply chain, the section on Business needs have identified what TMCA required to be
accomplished. To illustrate how these goals enable the improvements of the overall
supply chain process, the following will highlight on what business requirements will be
met if these goals are accomplished.
With the implementation of a supplier website, it will allow opportunities for

TMCA to achieve full localisation of suppliers within Australia. This indeed will
improve the JIT production drastically as less waiting time is required for imports
of components. Additionally, with the reduction of waiting time, it will thus allow
better forecast and shorter time required for productions, which eventually leads
to customer satisfaction. In addition, with the website, it will allow TMCA to
have a comprehensive overview of their current suppliers. It will also reduce the
red-tap involved for smaller suppliers to be part of the TMCA supplier. Moreover,
it provides TMCA with a channel to disseminate important supplier related
information to its upstream entities. Most importantly, the website will indirectly
lead TMCA towards a more efficient supply chain and reduce the risk of currency
exposure due to imports.
16
Due to the complexities in supply chain, the representation of the coordination of

activities, inter-organization interdependency, and the synergy of supply chain are
challenging issues. Nevertheless, with the implementation of an agent-based an
agent-based e-marketplace initiative, TMCA will be able to achieve more
efficient supplies from its suppliers. With the new system, the acquisition process
though can be faster, cheaper and more effective. Additionally, with the e-
marketplace which integrates suppliers, service providers, visibility would speed
decision making and enables communication through every level of TMCA’s
supply chain. With such, suppliers are able to coordinate and conduct “milk run”
which trucks can follows looped routes, make quicker and more frequent stops to
pick up smaller batches of several suppliers components within a region before
delivering these orders to the Altona’s plant. Optimization in terms of
collaboration and logistics will thus be achieved. Most importantly, the JIT
production will be drastically improved as more regular trips can be made to the
plant, resulting in save cost and plant space, reduced production time and most
importantly, increase customer satisfaction.
With the real-time tracking function module incorporated into the current
electronic BEA system, it will first reduce the bullwhip effect which causes
erratic shifts in orders up and down supply chain. It will also possibly eliminate
any stockpiling cause by the current forecast method of determining the quantity
of components needed for the productions. Most importantly, with such function,
all entities will be able to manage and track, in real-time, the complete end-to-end
process for discrete, replenishment, demand pull from order creation, acquiring
information from the Toyota Vehicle Order Processing System (TVOPS) residing
in the current main BEA WebLogic 8.1 system
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With the implementation of an intelligent logistic coordinating agent in the form

of a collaborative hub, it will allow the seamless collaboration of logistics
between multiple automotive manufacturers and 3PL providers. Not only will
this coordinating agent enabling all the participating manufacturers lower their
cost, improve their responsiveness and gain logistics agility, it will also allow
coordination and decision-making processes to be easier, more flexible and time
saving. Additionally, it will also allow more 3PL providers to be involved, allow
optimisation of operations. Most importantly, this real-time adaptive optimization
will thus allow participating automotive manufacturers to achieve complete
logistic operation taking even the smallest constraints into account.
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5. Solution Description
5.1 Solution Overview
In order to overcome the weaknesses as previously identified, analysis have been made
on the following goals that have previously been set. This is to allow the team to derive
the solution which can be used to address the current weaknesses. The following are the
solutions which the team have derived from goals previously set:

Solution: Implementation of a supplier website.

Solution: An agent-based e-marketplace initiative.

Solution: Real-time tracking function module incorporated into the current
electronic BEA system

Solution: An intelligent logistic coordinating agent in the form of a collaborative
e-logistics hub.
5.2 Concept Overview
The purposed of this Business Case is to identify any initiative to deploy IT to support
and streamline the overall supply chain operation. Having this in mind, the team have this
focus of providing the best solutions to improve the current supply chain operations with
the minimum disruptions on the current operations. To achieve that, the follow studies
are made before proposing the most appropriate solutions to eliminate the current
weaknesses.
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5.2.1 Identifying the domestics suppliers and service providers
Currently, 79% of the suppliers are actually made up of domestic’s suppliers, while the
other 21% are actually based on imported materials from all over the world.7 Unlike its
parent company, Toyota Japan, and other plants in States and Europe, all their suppliers’
supplies are actually received 100% from domestic suppliers. In the overall
organisation’s drive, Toyota would like to has an ideal 100% domestic suppliers, due to
the benefits in the Toyota’s Just In Time (JIT) System and others implication, such as
Government’s intervention and also prices of the finish product. For instance, a local
made product with all the locally produce and supply would be cheaper, in terms of costs
availability. Therefore, in hand, Toyota Australia must vitally identify it domestic
suppliers, first. The table 1 explains the potential and existing general domestic’s
suppliers and the service providers:
Automotive Suppliers and Service Providers:
• Active Plastic Industries Pty Ltd • P & O Ports Ltd

• Automotive Components Ltd • Patrick Autocare Pty Ltd
• Air International Pty Ltd • PBR Australia Pty Ltd
• Ajax Fasteners • Plexicor Australia
• Bridgestone Australia • Polk Australia Pty Ltd
• Car Haulaways - New Zealand • Robert Bosch Australia Pty Ltd
• Dana Australia • Schefenacker Vision Systems
• Denso Australia Australia Pty Ltd
• Edag Future Pty Ltd • SWS Australia Pty Ltd
• Hella Australia Pty Ltd • Toll Holdings
• Japan High Comm - Japan • Vehicle Design Australia Pty Ltd
• "K" Line Australia Pty Ltd • Venture Industries
• Mark IV Automotive Pty Ltf • VPAC - Victorian Partnership for
Advanced Computing Ltd
Table 1: Automotive Suppliers and Service Provider8
7
Based on case study
8
AANX: Trading Partners (Online) [http://www.motor.net.au/AANX/2c02f6f3-727a-4b6f-9e8b-
728634349bf5/, Last Accessed: 06 August 2005
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As the potential and existing domestics’ suppliers and service providers have been
identified in the current Australian Automotive Network e-Xchange System, from here
Toyota Australia is able to built the domestic e-Marketplace efficiently and effective.
Toyota Australia too can design the e-Marketplace based on an “Open Door” policy,
where accessibility is the key word that best characterize their corporate philosophy
towards supplier diversity. Everyone involved in their program sits on the other side of an
open door. In the policy, from the co-ordinator to the buyers who actually purchases
goods and services from suppliers will allow readily available and taking care to so small
things right.
5.2.2 Current IT architecture, tools & technology platform
IT architecture is often assumed to follow business strategy, to align IT with the

business’s strategic objectives. Increasingly, though, TMCA business strategies depend
on specific underlying IT capabilities, to develop a synergy between business strategy
and IT architecture, TMCA must identified the IT architecture stages, each with its own
requisite competencies.
Figure 4. Changing Resources Allocation across Architecture Stages9
9
Jeanne, W., (2003) Creating a Strategic IT Architecture Competency Learning In Stages, MIS
Quarterly Executive Vol 2 No 1
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A suitable architecture too fit into Toyota would be based on a “modular architecture
stage”, as it builds onto enterprise wide global standards with loosely coupled IT
components to preserve the global standard while enabling local differences. Modular
architectures will also to create the opportunity for strategic agility, by ensuring their
predictability of the core processes. 9
In this case TMCA already has a core engineered process running for its supply chaining
system. Moreover, with the introduction of a modular BEA architecture, any new
applications can just be plugged into onto the existing SAP systems and also running side
by side with the current BAE system.10 Even, if that system is a UNIX network platform
background, it would not be a problem for the proposed system to integrate with the
existing platform, as it would be a modular system. Therefore, it is encourages to be a
modular system, which sit easy on the current platform, and able to communicate with
the existing system in the network, accessing from the same data silo.
5.3 Detail Solutions

5.3.1 Solution 1 (Toyota Australia Suppliers Website)
Figure 5. Supplier website for Toyota America

(Source: www.toyotasupplier.com)
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Based on case study
22
With the sophisticated proposal to improve TMCA supply chain system, TMCA yet need
to improve on its marketing strategic for attracting the key potential suppliers. This is a
vital role for the Toyota Australia’s supplier team to work on, although they already have
an American’s version of Toyota Supplier (www.toyotasupplier.com). Here, as TMCA
increasingly focused on its core competencies in high-end design, engineering and system
integration, TMCA requires suppliers that are highly focused on their own core
competencies. Nevertheless, small and diverse companies have the ability to display such
potential, to bring innovation, flexibility and strength to TMCA’s supply base.
In order to achieve this goal, along with the solution previously proposed by the team,
TMCA first has to open its door for the domestic market suppliers to invest in their new
concept of supply base. This is also in order to achieve 100% domestic suppliers.
Therefore, this solution proposed will implement a supplier-centric website, to provide
opportunities to expend their supplier network.
Existing
Public / Suppliers/ New Domestic
Interested Suppliers eMarketplace
Suppliers
Access
Access
Toyota Australia
Suppliers Website
Access
Public / Access Existing

Interested Suppliers/ New
Suppliers Suppliers
Figure 6. Access Flow From Toyota Australia Suppliers Website
From this website, potential suppliers will be able to acquire information on the
requirements of becoming part of TMCA’s supplier network. To achieve that, potential
23
suppliers need only to download or complete an online form to join the network.. In
addition, information such as supplier’s guide, community activities and any core
information about TMCA’s current supplier’s network can be obtained from the website.
Conversely, for suppliers who are already part of the network, besides the current
information which was previously mentioned, this website provides the connection links
to the domestic e-Marketplace (Solution 2). As a registered member of the e-
Marketplace, they are able to enjoy the privileges on what the e-Marketplace is offering
(Details of functions explained in solution 2). In short, this website not only provides new
opportunities for TMCA and existing suppliers, but also potential suppliers who possess
the capabilities to improve TMCA’s overall supply chain process.
5.3.2 Solution 2 (Agent-Oriented Domestic e-Marketplace)
5.3.2.1 General overview
As e-Business grows and becomes viable in the real world, the proposed e-Marketplace
are able to support a broader base of services ranging from baseline interaction and
directory services to specialty market services, such as dynamic trading, cooperative
supply chain integration and management. In addition, the proposed e-Marketplace
enables and facilitates the relationship between business participants (including suppliers
and service providers) and their supporting systems. To this end, a fundamental aspect
that our proposed e-Marketplace architecture supports is many-to-many relationships
between TMCA and these business partners. This enables both TMCA and suppliers to
leverage economies of scale in their trading relationships and access a more liquid
marketplace. This in turn allows the use of dynamic pricing models, such as auctions (one
of the services provided in the proposed e-marketplace), which improve the economic
efficiency of the market where uncertainty about prices and demands are common.
24
Figure 7. Logical concept of the Domestic e-Marketplace
5.3.2.2 Integration with existing systems
To provide smooth and effective integration at the business level, the e-Marketplace
architecture accommodates and supports interfaces to the existing business models of the
participant entities through cooperative supply-chain integration and management. There
is a need for well-accepted interoperability standards, which must be meshed for supply
chain integration to meet business demands. Conceptually, a supply-chain manages
coordinated information and material flows, production operations, and logistics of the e-
Marketplace. It provides the e-Marketplace with flexibility and agility in responding to
customer demand shifts without conflicts in resource utilization. The fundamental
objective is to improve coordination within and between various participant business
entities in the supply-chain. The increased coordination can lead to reduction in lead
times and costs, alignment of interdependent decision-making processes, improvement in
the overall performance of each participant in the chain, as well as the supply chain itself.
25
Figure 8. Logical concept of system Integration.
5.3.2.3 Agent-Oriented e-Marketplace
All services (business, market, and integration) in an e-Marketplace usually involve

complex and non-deterministic interactions, often producing results that are ambiguous
and incomplete. Auctions and ad-hoc service integrations are some examples. In addition,
the dynamic nature of the environment requires that the components of the system be able
to change their configuration to participate in different, often simultaneous roles in e-
Marketplaces. These requirements could not be accomplished using traditional ways of
manually configuring software. Therefore agents are utilised within the proposed
domestic e-marketplace. An agent within the context of the e-Marketplace will play
several roles and will be able to coordinate, cooperatively or competitively, with the other
agents, including humans. As shown in Fig. 4, an agent’s role can be categorized as user-
interface, business-specific service, business-entity service, market service, or integration
service.11
11
Ghenniwa, H., Michael, N., Shen, W., (2004) e-Marketplace for enterprise and cross enterprise
integration. (Online) [www.dcce.ibilce.unesp.br/~mariot/03_06_JAVA_Artigo_3.pdf, Last
Accessed: 08 August 2005].
26
Figure 9. The architecture of the e-Auction within the proposed e-Marketplace

(Source: e-Marketplace for enterprise and cross enterprise integration.)
Below are the Agents for the proposed e-Marketplace:
User interface agents: The main functionality of user interface agents is to

support and collaborate with users in the same work environment to achieve the
users’ goals12.
Business-specific service agents: Are specialists that provide a collection of

business-services available in the e-Marketplace. Performing the functionality of a
business service is typically the cooperative integration of several agents
including business-specific service agents and market service agents. A business-
specific service agent is a representative in the e-Marketplace for some
12
ibid
27
functionality that is based on legacy applications or libraries, such as a product

catalogue Web site.13
Market service agents: are specialists that provide a collection of functions for
generic e-Businesses in e-Marketplace environments in which a single entity
(usually an agent) can perform its tasks in the e-Marketplace. Market services
(value-added and core services) are horizontal, i.e., services that are used in
several business domains by several business entities. 14
Integration service agents are specialists that provide a collection of integration

functions for a cooperative distributed system in which a single entity (agent,
component, object, etc.) can perform its tasks. Integration services are used by
several distributed entities. For example, a brokering agent provides a capability-
based integration service in the e-Marketplace. Another type of integration agent
provides view-integration, which is a service to merge and map the description of
business-objects (e.g., source schemas) in the e-Marketplace supported by the
business ontology into an integrated view or schema
5.3.2.4 Solution description / Scenario of the purpose e-Marketplace
In the proposed e-Marketplace, referring to figure 8, ABC Corp and XYZ Inc. are virtual
business entities registered with the e-Marketplace for both purchase and sales services.
Individual customers or business-entity personnel in the e-Marketplace can participate in
the market through a dedicated user interface agent assigned by the e-marketplace.
Similarly, an agent in the e-Marketplace represents each business-entity service. These
agents provide thin, intelligent, highly autonomous interfaces for the business-entity
services that might be based on legacy applications. For example, the ABC purchasing-
service agent represents the implementation of the business-specific purchases by ABC in
13
Yinsheng, L., Weiming, S., Ghenniwa, H., (2004) Agent-based web services Framework and
Development Environment. (Online) [http://www.blackwell-synergy.com/doi/abs/10.1111/j.0824-
7935.2004.00260.x?cookieSet=1, Last Accessed: 4 September 2005].
14
Ghenniwa, H., Michael, N., Shen, W., op. cit.
28
the e-Marketplace. Each user interface and business-entity service agent is registered in
the e-Marketplace. Thus, a user interface agent can benefit from the market, business-
specific, and business-entity services by interacting with their representative agents. Each
business-entity service must also be registered with a registry agent for the corresponding
business-specific service. Each layer, and its registry services, are intended to provide
some aspect of information about the e-Business environment and enable an interested
party to obtain information to potentially use offered services, or to join the e-
Marketplace and either provide new services or interoperate as a trading partner with
other business-entities in the e-Marketplace.
5.3.3 Solution 3 (Real Time Inventory Tracking Module)
5.3.3.1 General Overview

In any ideal supply chain operation, it would be a complete solution to provide a real time
updates on the demand and supply allocation. This modular system proposed will reduce
the bullwhip effect which causes shifts in orders up and down the supply chain, and
eliminating any stockpiling cause by the current forecast method of determining the
quantity of components needed for the productions. Moreover, this proposed system is
designed to provide process visibility across the value chain, giving suppliers greater
control over the process and ensure synchronization of information with all partners
regardless of size or geographic location.
Figure 10: Overview of Real Time Inventory Tracking Module

(Source: e2Open Solutions)
29
The real-time inventory tracking module to be incorporated into the BEA system will
comprises four agents, used independently or in combination with one another to execute
more advance process in the supply chain. These four agents are Forecast, Inventory,
Order and Multi Tier Visibility.
Forecast Agent
This agent will enables suppliers to rapidly align demand and supply in the mid-
to-long-term planning horizon, allowing customers and their partners to arrive at a
consensus forecast or plan. It provides alerts and notifications of demand supply
mismatches and can support a single-phase or two-phase commit planning
process.
Inventory Agent
This agent enables suppliers to align demand and supply by providing visibility to
inventory status levels at multiple internal and external locations, as well as in-
transit positions, enabling optimal levels of inventory. It allows partners to
exchange key inventory-related information, such as demand-pull requests and
target inventory levels and can be used to track supplier compliance to contract
obligations such as min/max inventory levels. Exception alerts can be configured
to flag any inventory-level violations.
Order Agent
This agent enables suppliers to manage and track the entire purchase order
lifecycle through TMCA’s supply process. Suppliers can manage and track, in
real-time, the complete end-to-end process for discrete, replenishment, demand
pull and/or blanket purchase orders from order creation through shipment, receipt,
invoicing and payment.
30
Multi-Tier Visibility Module

This agent allows TMCA to extend their demand/supply planning, order
management and inventory management workflows beyond their first-tier
partners to provide visibility to the processes executed between tier two, three and
four partners. The solution allows to monitor demand/supply disconnects and
exceptions throughout the extended supply chain, while providing tools to help
identify the impact of problems identified multiple tiers away.
With these four agents implemented, integrated and work seamlessly with the existing
BEA system, it would practically enhance the current system. Hence, give real time
updates on the demand and supply allocations. In short, TMCA is now able to execute
and monitor closely on their suppliers supplying operation and also the value chain.
Moreover, this system will be able to supports an array of integration protocols, formats
and industry standards, including:
Transport Protocols Data Formats Standards

Protocols
• HTTP • SOAP • XML • RosettaNet
• HTTPS • AS1/AS2 • EDI • UCCNet
• FTP • RNIF 1.1/2.0 • Flat File • X12
• sFTP • RPC • Spreadsheet • EDIFACT
• SMTP • XPC • EAIJ
• cXML
• xCBL
Table 2: Supports an array of integration protocols, formats and industry standards
(Source: e2Open Solution)
5.3.3.2 Solution Description
In this proposed real-time inventory system, when an order is being placed by the
salesperson, the order information like car type, date-of-order, requirements will be enter
into the TVOPS. Instantaneously, the Order Agent will communicate with the TVOPS
31
and collect the necessary information and analysis the data. The Order Agent will then
provide the information regarding the parts involved and any requirements on the
vehicles to the Inventory Agent. The Inventory Agent will then analysis the information
received from the Order Agent. The Inventory Agent will identify those suppliers
involved and submit inventory request to the suppliers. In addition, the Inventory Agent
will collect any key inventory-related information and update the Order and Forecast
Agents, which will then be returned to the TVOPS after aggregating the data.
Simultaneously, when the analysed information is communicated between the Order

Agent and Forecast Agent, information on date of order will be analysed by the Forecast
Agent based on the current situations on demand and supply, and return the information
to the system with the date-of-delivery. The demand and supply information will be
communicated between Forecast Agent and the Inventory Agent. Nevertheless the
Forecast Agent will also be having the overview of all inventories and provides alerts and
notifications of demand supply mismatches. Information of such will be communicated
through the Inventory Agent where all inventory locations and level will be visible to the
Inventory Agent. In short, all the 3 Agents will be communicating in runtime to provide
all necessary information across the whole supply chain, to allow real-time inventory
tracking which eventually improve the JIT production.
5.3.3.3 Scenario of proposed module
The interest of this system is focused on a complete solution to provide a real-time

updates on the demand and supply allocation. In this scenario, one of the distributors of
TMCA has just received an order of purchase of a locally made Toyota Camry. When the
salesperson logs the order into the current BEA system, the information will immediately
be sent Toyota Vehicle Order Processing System (TVOPS). Instantaneously, the real-
time inventory module will acquire the new order information and be analysed. The
analysed inventory information will then be sent to the respective suppliers to be updated
onto their own system. For example, as a Toyota Camry requires more than 260 parts,
only those suppliers involved in the production of Camry’s part will receive the
information about the new order. With such message flow, suppliers can get their supply
32
ready for the next delivery to meet the JIT production in the shortest possible time
needed.
5.3.4 Solution 4 (An agent-based transport and logistics coordination system)
5.3.4.1 General Overview
An agent-based transport and logistics coordination system (collaborative e-market), are

designed to accomplish transport and logistic coordination tasks among different
automotive manufacturers in Australia. These agents are Distribution Hub Agent
Logistics Coordinator Agent, Manufacturer Agent and Transporter Agent. These four
types of agents represent the generic role in a typical supply chain.
They may also link to other agents such as inventory management agent and planning
application to get necessary information. The sequence of task flow is depicted in Figure
3 below. The Distribution Centers of individual automotive manufacturers will send their
distribution requirement (DRP) to a Logistics Coordinator who will transform the DRP
into transport and manufacturing requirements. These requirements will be broadcast to
the available transporters and manufacturer’s plants so that they could work on their bids.
After the bids are received, the logistics coordinator will work on a global optimized
solution before committing the distribution centers.
Figure 11. Framework for agent-based supply chain coordination
33
5.3.4.2 System Architecture
.An architecture for agent-based distributed logistics coordination has been designed
(Figure 11) based on JADE (details in the “Tools and Technology” section) agent
platform.15 The minimum system requirement to run JADE is the JDK 1.2 Runtime or
later.16 Each participant of a supply chain provides the agent platform with a set of agent
instances. The agent platforms are linked via Internet connections. This platform includes
basic management agents and application agents. Basic management agents include
Registration Agent, Communication Agent, and Directory Agent to facilitate the creation
and management of application agents. The logistics management agent is actually an
instance of the application agent, which is used to coordinate and produce the optimized
logistics decision. The application agent includes interface, activation controller,
optimization/planning modules, and knowledge base. Different supply chain
planning/optimization modules such as demand forecasting, transportation/manufacturing
planning could be incorporated into the platform.17
Figure 11: Platform of agent-based distributed logistics coordination18
15
Java Agent Development Framework, JADE, (Online)[http://jade.tilab.com/, Last Accessed 04
September 2005],
16
Ibid.
17
Ibid.
18
Zhengping, L. Melcolm, Y., Kumar, A, A Framework for Multi-Agent System Based Dynamic
Supply Chain Coordination, (Online)[ www.informatik.uni-rostock.de/~/dasd/008.pdf, Last
Accessed: 04 September 2005]
34
5.3.4.3 Solution Description
5.3.4.3.1 Logistic Optimisation within Australia
In this proposed agent-based logistic system, based on ordered demand established, the
Distribution Hub Agent calculates the distribution requirements.19 Thereafter the
Distribution Hub Agent can pass the DRP to the Logistics Coordinator Agent by pre-
defined data interface.
The logistics coordinator splits the requirement into manufacturing and transportation
requirements. Because the demand information may have been consolidated, the
Manufacturing Plant would not care about the due date to deliver the goods to the
Distribution Center. Instead, they must know when the product should be ready for the
Transporters. The Logistics Coordinator Agent divides the distribution requirements
based on a historical knowledge base. In this database, the records show for a product,
how long it will take for the Manufacturing Plants to produce a specific quantity, and
how long it will take for the Transporters to deliver as shown in Table 320.
Table 3: Dividing the Distribution Requirement21
19
Ibid
20
ibid
21
ibid
35
In the first round of coordination, the “Price” afforded by the Distribution Center is not
given to the Manufacturing Plants and the Transporters. Instead, the Logistics
Coordinator waits for the service providers to bid with price. The Transporter Agents
perform local optimization using their own data on routes, schedules and consignments.
The Manufacturer Agents will perform local optimization using data on inventory,
capacity and processing times. The results of the optimization will be transferred to the
Logistics Coordinator Agent for global optimization.
5.3.4.3.2 Global Optimisation
After the Manufacturer and Transporter Agents finish local optimization process, they
will commit the orders back to the Logistics Coordinator Agent. The Logistics
Coordinator Agent will attempt to combine the respective commitments to produce joint
commitments by summing up price and lead times (for Q1, Q2 and Q3 respectively). A
Manufacturer Agent will summit three different sets of parameters, namely the preferred,
upper limit, lower limit Lead Time, and their corresponding prices for each quantity.
Once the Logistics Coordinator Agent receives these local optimization commitments, it
combines them accordingly. For the two sets of data (with the same quantity) coming
from the Manufacturers and the Transporters, the total price can be achieved by adding
the price of the Manufacturer (PM) to the price of the Transporter (PT). To calculate the
Due Date, the Logistics Coordinator Agent will combine the lead time of the
Manufacturer (LTM) and the lead time of the Transporter (LTT) to get the total lead time
of the product. Based on this total lead time, the Due Date of the product can be easily
obtained. Table 4 shows examples of commitment of Manufacturers and Transporters and
corresponding combined commitments. The combination of the commitments from the
Transporters and Manufacturers can create multiple sets of candidate points as shown in
Table 4.
36
Table 4: Commitments from manufacturers and transporters and their combination22
The optimization searching process is to find the optimal point (see Figure 12) which
with acceptable difference with that of the customer requirement (with quantity, price and
due date). If the point identified is still not acceptable, a boundary box will be defined
around the optimal point to set the lower and upper limits so that a second round of
bidding can be done. This process will be repeated until the solution converges.
Figure 12: The search for global optimal solution23
After the optimal values for the product quantity and lead time are obtained, the Logistics
Coordinator Agent then returns these suggested values to the selected manufacturers and
transporters to allow them to calculate the corresponding prices, which the Logistics
Coordinator Agent will compare the price result with the solution achieved by data
22
ibid
23
ibid
37
matching. The Logistics Coordinator Agent may submit the solution with the lowest price
to the Distribution Hub Agent.
5.3.4.4 Scenario of proposed system
The interest of this system is focused on improving the current logistic demand to provide
customers with the fastest delivery of their vehicles. In this scenario, TMCA may wish to
send 20 cars to a country. However with only 20 cars, it is not feasible for TMCA to ship
the cars. Traditionally, in such situations, TMCA will have wait for either enough cars to
be sent to the country or to wait for the available ship with the capacity of 20 car slots.
This will results in delaying the shipment of the vehicles to the end consumers, which
eventually lead to customer’s dissatisfaction.
With the proposed system, TMCA invites other automotive manufacturers to join
collaborative e-logistic marketplace. With this marketplace, individual automotive
manufacturers will submit their orders to the e-marketplace. Together with the shipping
information provided by the freight companies, the system will conduct an optimization
searching process based on manufacturer’s requirements (quantity, designation, price and
due-date) and the shipping details until the search has reached a optimal point when is
feasible for the shipment to be made to the country or even nearby ports with the least
time needed for the vehicles to arrive to their final designations. For example, with a
capacity of 200 car slots in the specialist vehicle transport ship, manufacturers like Ford,
Holden, Mitsubishi and Toyota can coordinate their orders into one shipment.
38
5.3.5 Integrating the Solutions
Others
Automotive
Manufacturer
e-Logistic Hub
Integrated Solutions
TMCA
Supplier Domestic
Website e-Marketplace
BEA + RTTM*
SAP Automotive System

Suppliers
* Real Time Tracking Module
Figure 13: Overview of Integrated Solution
In order to overcome the weaknesses as previously identified, the team have provide with
individual solution to address each weakness. Nevertheless although the team believes
that each of the above mentioned solution is able to cater to the address all the
weaknesses, it is nevertheless important to note that having individual stand-alone
systems is not convenient for any of the participants. For example, an existing suppliers is
interested to access the e-Marketplace for some procurement activities after reading some
critical information from the supplier website, he will have to log into the e-Marketplace
using the same username and password. Additionally, with each of the suggested
solutions as stand-alone system, it is also not feasible for critical information to flow
freely within the supply chain. Therefore, the team believes that a single access function
is more user friendly for and participants and the flow of information. Eventually, all
systems that the team proposed is meant for a common aim; to improve the overall
supply chain process efficiency.
39
With such considerations in mind, the team therefore proposed an integrated solution
which integrates all the four suggested solutions into one single solution, with the ability
to be implemented into the existing business logic, such as within SAP. The fact that all
the proposed solutions are based on open standards means that is inherently easy to
modify. In fact, it is designed to be flexible, which means that it allows the stakeholders
to decide on which system is to be integrated and which system to be run alone.
Additionally, exposing functionality and data as services across the enterprise also helps
TMCA reduce overhead by eliminating the need for infrastructure duplication. And, the
messaging-oriented nature of these solutions enables the team to link sales, marketing,
manufacturing, and financial applications in real-time, which improves customer service
by making up-to-the-minute information accessible across our value chain. Therefore, the
team strongly suggests the implementation of the integrated solution.
5.4 Tools and Technology

5.4.1 Java Agent Development Environment (JADE)
The overall implementation of the solutions utilizes the JADE (Java Agent Development
Environment) platform24, which is a software framework to develop agent applications in
compliance with the FIPA specifications (The Foundation for Intelligent Physical Agents,
1998)25 for multi-agent systems. JADE is able to deal with all aspects external to agents
that are independent of their applications, such as message transport, encoding and
parsing, agent lifecycle and others. Basically, JADE supports a distributed environment
of agent containers, which provide a run-time environment optimized to allow several
agents to execute concurrently. This feature has been utilized to create several concurrent
market sessions, such as commodity and auction sessions.
24
Java Agent Development Framework, JADE, op. cit.
25
FIPA (2003) (Online) [http://www.fipa.org/., Last Accessed: 06 September 2005].
40
In addition, JADE provides support for standard FIPA and user-defined ontologies with
the open source and standard software concept. On top of it, JADE is completely
implemented in Java language and the minimal system requirement is the version 1.4 of
JAVA (the run time environment or the JDK)26. Although the implementation takes
advantage of the JADE platform and its supporting agents, such as directory facilitator,
the architecture of the application agents is based on the CIR-Agent model (shown in Fig.
3). Java features, such as portability, dynamic loading, multithreading, and
synchronization support make it appropriate to implement the inherent complexity and
concurrency in an e-Marketplace. These features are also instrumental for executing the
CIR-Agents in parallel.
Apart from using JADE, which will made up 90% of the solutions’ architecture, another
set of technology will be introduce to the architecture of the website (solution 1). For that
particular solution, Java Server Pages (JSP) technology is selected to provide a
simplified, fast way to create dynamic web content. Therefore, it can be support by any
operating platforms. In addition, JSP technology enables rapid development of the web-
based applications that are server and platform independent.
In short, JSP will be only used in the particular sections of the solutions, where it is just a
web based interface, while the most part of agents programming will design using the
JADE.
5.4.2 Components of the an Agent
An agent can be described as a collection of primitive components that provide a focused

and cohesive set of capabilities. Fig. 14 depicts the Coordinated Intelligent and Rational,
Agent (CIR-Agent) model27. The basic components include a problem solver,
interactions, and communication, as shown in Fig. 14(b). A particular arrangement or
interconnection of the agent’s components is required to constitute an agent, as shown in
26
Java Agent Development Framework, JADE, op. cit.
27
Ghenniwa, H., Kamel, M., Interaction devices for coordinating cooperative distributed, intelligent
Automation and Soft computing 6 (2) (2000) 173–184.
41
Fig. 14(a). However, no specific assumption is made on the detailed design of the agent’s
components. Therefore, the internal structure of the components can be designed and
implemented using object-oriented or any other technology. A CIR-Agent model
provides software engineers with features at a higher level of abstraction that are useful
for cooperative environments. It supports flexibility at different levels of the design:
system architecture, agent architecture, and agent component architecture. These degrees
of flexibility allow information systems to adapt to changes with minimum requirements
for redesign.
Figure14. The CIR-Agent architecture28

(a) Detailed architecture of CIR-Agent and
(b) Logical architecture of CIR-Agent
The design of each agent is described in terms of its knowledge and capabilities. The
agent’s knowledge includes the agent’s self-model, goals, and local history of the world,
as well as a model of its acquaintances. The agent’s knowledge also includes its desires,
28
Ghenniwa, H., Michael, N., Shen, W., op. cit.
42
commitments, and intentions as related to its goals. The main capabilities of the CIR-
Agent include communication, reasoning, and domain actions. Implementation of the
communication component takes advantage of JADE messaging capabilities. It is
equipped with an incoming message inbox, whereby message polling can be both
blocking and non-blocking, and with an optional timeout mechanism. Messages between
agents are based on the FIPA Agent Communication Language (ACL)29. The agent’s
reasoning capabilities include problem solving and interaction devices. The problem
solving of an agent is implemented through the use of complex behaviors. Behaviors can
be considered as logical execution threads that can be suspended and spawned. The agent
keeps a task list, containing active behaviors. The problem-solving component varies
from one agent to another as will be the in the following subsections. The agent behaviors
can be classified as follows: behaviors that are concerned with market services, such as a
market-registry and auction services; and behaviors that are concerned with providing
business-specific services, such as selling and purchasing.
29
FIPA, op. cit.
43
6. The Challenges
6.1 Financial Analysis
Since the new solution will be built on Toyota’s existing platform, significant cost will be
omitted. The new solution will utilize most of the existing software and hardware. Java
will be used as the main language to ensure cross-platform functionality and also
integration with the existing system.
Increased ROI on Existing System

Through Toyota’s Weblogic platform, new business initiatives that speed services
delivery, improve customer responsiveness, and increase return on investments
can be realized.
WebLogic development environment is built on the standards-based Java 2

Enterprise Edition (J2EE) platform. This is especially beneficial to Toyota that
needs cross-platform portability and scalability for the ability to combine existing
and new applications30.
6. 2 Development Cost
Toyota requires a team of developers that consist of:

• 1 Project Leader
• 2 System Analysts
• 10 Programmers
The project requires an estimated 6 months to complete. Work will be divided into 2
development teams and will work separately in 4 different modules.
Salaries and wages

Team member Salary/wages for project
Project Leader $50,000.00
Senior system analyst $35,000.00
system analyst $30,000.00
programmer analysts $60,000.00
programmers $160,000.00
system programmers $50,000.00
total salaries and
wages $385,000.00
Table 5: Salaries and wages
30
Tom B. (2005), The BEA WebLogic Platform and Host Integration [Online]. Available:
http://dev2dev.bea.com/pub/a/2005/03/host_integration.html?page=1 [Accessed 2005, Sep. 5].
44
Summary of Development Cost

Expenses Amount
Salaries/wages $385,000.00
Equipment/installation $100,000.00
Trainning $200,000.00
Facilities $120,000.00
Utilities $70,000.00
miscellaneous $100,000.00
Licenses $10,000.00
Support Staff $50,000.00
total $1,035,000.00
Table 6: Summary of Development Cost
Developement Cost Graph
Salaries/wages
$400,000.00
$350,000.00
Equipment/installation
$300,000.00
Trainning
$250,000.00 Facilities
Amount
$200,000.00 Utilities
$150,000.00 miscellaneous
$100,000.00 Licenses
$50,000.00 Support Staff
$0.00
Expenses
Figure 15: Development Cost Graph
Summary of Annual Operating Costs

Recurring expense Amount
Connectivity $50,000.00
Equipment/installation $20,000.00
Programming support $80,000.00
Training & ongoing assistance $120,000.00
Advertising $50,000.00
Total recuring costs $320,000.00
Table 7: Summary of Annual Operating Costs
45
Annual Operating Cost Graph

Connectivity
$120,000.00 Equipment/installation
$100,000.00
Programming support
$80,000.00
Amount
$60,000.00 Training & ongoing

assistance
$40,000.00 Advertising
$20,000.00
$0.00
Recurring Expense
Figure 16: Annual Operating Cost Graph
Sample Benefits
Benefits/cost saving Amount
Increased localization of parts $300,000.00
Efficiency and flexibility in
dealing with suppliers. $200,000.00
Reduced shipping costs $250,000.00
Increased sales of cars/parts $1,300,000.00
Other savings $100,000.00
Total annual benefits $2,150,000.00
Table 8: Sample Benefits
Sample Benefits Graph

Increased localisation of
parts
$1,400,000.00 Efficiency and flexibility in
$1,200,000.00 dealing w ith suppliers.
$1,000,000.00 Reduced shipping costs
Amount
$800,000.00
$600,000.00 Increased sales of
$400,000.00 cars/parts
$200,000.00 Other savings
$0.00
Benefits/Cost Saving
Figure 17: Sample Benefits Graph
46
6. 3 NPV & ROI
Using a discount rate of 10%, the five year NPV (Net Present Value) would be estimated
at $5,902,139.79. (Refer to Appendix)
The five year ROI (Return on Investment) is estimated at 262.54%, which is a reasonable
return from the solution. (Refer to Appendix)
7. Challenges
7.1 Financial Challenge
Toyota needs to invest significantly to ensure the project is completed. There are some
financial challenges that might arise.
Project Cost
The solution will require not only professional expertise in the fields of constraint
programming, intelligent agent and e-business solutions but also months of
development time. This requires a significant amount of investment from Toyota.
The Need to Train Internal and External Users

The users of the system involve the company staff, suppliers, customers,
automotive manufacturers. Proper facilities, trainers, training sessions and
materials need to be provided to ensure that users are capable of operating the
system with minimal technical support. This requires a significant amount of time
and money and is crucial to ensure project success.
The Need to Retain System Experts

Due to the novelty of the system, the company does not possess required skills to
develop or support the system. The company needs to consider hiring experts that
are well versed in the areas of constraints programming and intelligent agents to
support the system. Hence, it might require hiring new employees and creating a
new division that support the new solution.
Preparing for Possible Outcomes

As not all systems are deployed successfully, Toyota should be prepared for
project failure. A contingency plan needs to be in hand to allow fallback to other
alternatives, such as AANX.
47
7.2 Organizational Challenge
The organization will be affected by the new system as a result of new organizational and
cultural issues. It is crucial to identify potential risks that might arise. Some of the risks
are:
Collaboration with Project Team

The company’s IT staff will have to work closely with the development team to
meet business requirements and project goals. This requires constant
communication between the development team and Toyota staff. Furthermore,
there will be other issues that pertain to ownership & agreement of the final
product.
Collaboration with Automotive Manufacturers, Suppliers & Customers

Automotive Manufacturers, Suppliers & Customers will need to co-operate with
the company to identify crucial requirements in order to create a successful
solution. They need to be trained on how to use the system effectively.
Fostering New Relationships

The eMarketplace will open up to potential customers and business partners
(Vertical or horizontal industry). This requires better customer & supplier
relationship management to ensure that all participants acquire what they need
from the system.
Advertising the New System

The company needs to recommend the new system to not only internal users but
also external users such as automotive manufacturers, suppliers & customers. This
requires significant effort from the company in order to attract new & old users
into the system. Furthermore, they need to be aware of potential benefits of the
new system.
Training Users with New Skills & Knowledge

The company will need to provide proper training methods to both internal and
external users of the system. Users will include:
• Internal staff
• Suppliers
• Manufacturers
• Customers
User support will be provided through various methods such as:

• On-line documentation and troubleshooting
• Resident experts
• Help desk
• Technical support
48
A carefully designed training plan needs to be devised to improve the

understanding of the system and ensure project success.
Achieving Global Reach

Currently, the system will be catered to the Australian domestic market. The
international market remains a major challenge for TMCA as their exports are
limited by trade restrictions.
Convincing TMC to adopt the system

The pressure will be on TMCA to deliver the system successfully and show to
Toyota’s parent company that it is a viable solution to implement in other
countries.
Monopoly Issues
Due to Toyota’s relationship with suppliers using the Black-box Method,
monopoly issues might arise. Solution 4 will be an optional solution which
requires careful consideration before implementing. There should be government
intervention or even partnership or alliances such as AANX to ensure a common
platform for all parties.
8. Feasibility
8.1 Financial Feasibility
Due to the complexity of the system, it will require a span of 6 months to develop and
deploy. However, with the introduction of the new solution, Toyota will benefit
tremendously in terms of shipping cost reduction, higher percentage of parts localization,
increased profitability, increased efficiency, etc.
Categories of Cost Significant Major Minor

Development/maintenance costs X
Getting existing suppliers to use the X
system
Reduction of shipping cost X
Attracting new suppliers X
Disruptions to staff X
Additional staff to handle the X
system
Threat of competitors taking X
advantage of similar technology
and achieving similar efficiency
improvements.
Categories of Benefits Significant Major Minor

Increased localization of parts X
49
Expanded sales and customer base X

Efficiency and flexibility in dealing X
with suppliers.
Gaining experience that would X
assist with future e-commerce
ventures.
Increasing the business’ X
competitive advantage
Suppliers remain loyal due the X
range of services offered
Table 9: Cost/Benefit Analysis
8.2 Organizational Feasibility
The new solution will work in tandem with the existing system. Using phased
installation, this will ensure that organizational operations will not be affected
dramatically during implementation. The relationship between Toyota and suppliers will
be improved due to higher degrees of collaboration. It is highly feasible to introduce the
system.
50
9. The Implementation Timeline
Figure 18: Work Breakdown Structure
51
10. Recommendations
A gradual implementation using a strategic mix of the demonstrated four (4) solutions
should be adhered to so as to lessen the impact of the introduction of the new trading
agent based system. The solutions have been tailored so that even parts thereof from each
system can be “mixed-and matched” to suit the ongoing business requirements of TMCA.
Although cost will be an underlying factor in the choices made when applying the
solutions, it must be stressed that the best approach will be the options that provide the
greatest level of user interaction as well as schedule transparency within the supply chain.
Corporate management from Toyota Kentucky (TMMK) as well as other North

American subsidiaries (TMMNA) are recommended in assisting with the implementation
of this solution so as to advise whether there will be any possible impacts in expanding
Toyota Australia’s local supplier base using the proposed e-commerce methods. Any
lessons learned from TMMNA’s experience in localising its supplier base will certainly
provide essential real world case scenarios when implementing the proposed system.
11. Conclusion
As conceptualized from the point of software engineering, the weakness of TMCA’s
supply chain has been rectified with the array of solutions proposed. These solutions are
designed based on using multi-agent architecture to enhance the existing system in
TMCA’s supply chain. Technical elements and examples of rudimentary solution to
create a domestic e-Marketplace and other tools using emerging technologies exist.
The vision of the agent-enabled infomediary-based e-Marketplaces described here can

benefit from the incorporation of elements of the Semantic Web initiative. Potential
domestic suppliers can also now obtain information on the Toyota’s supply chain from
the website. This e-marketplace provides a decided advantage to management and
process over its competitors, and provides TMCA and its suppliers with a learning curve
advantage in creating domestic e-Marketplaces. Intelligent agents have also received
52
significant attention as powerful modeling abstractions for B2B applications. Together

with emerging technologies, such as JADE and Java Servlet Pages (JSP), these provide
opportunities to develop integrative e-Marketplaces throughout organizational value
chains. In order, to ensure the information flow efficiently in the network, real time
inventory tracking module has as been introduced into the plan. Here, system is designed
to provide process visibility across the value chain, giving TMCA and suppliers greater
control over the process and ensure synchronization of information with all partners
regardless of size or geographic location. In addition, an agent-based transport and
logistics coordination system (collaborative e-market), are introduced to accomplish
transport and logistic coordination tasks among different automotive manufacturers in
Australia.
These solutions are also addressed with the challenges which are going to face by
TMCA, such as the financial and organisation challenge. In addition to that, a
implementation timeline and feasibility studies have also added to give a clear view for
the project to take place. Thorough coverage of inherent cost estimates of these solutions
are shown that have allowed TMCA management to conclude that from an NPV of just
less than six million dollars and an ROI of just over 260 percent, the solutions presented
in this business case are flexible as well as adamantly effective for TMCA.
53
References
AANX: Trading Partners (Online) [http://www.motor.net.au/AANX/2c02f6f3-727a-
4b6f-9e8b-728634349bf5/, Last Accessed: 06 August 2005]
Autoweb.com.au, (1999): Toyota Chooses Michelin as Original Equipment (Online).

[http://autoweb.drive.com.au/cms/A_51253/newsarticle.html, Last Accessed: Accessed
on 4th September 2005].
FIPA (2003) (Online) [http: //www.fipa.org/., Last Accessed: 06 September 2005].
Ghenniwa, H., Kamel, M., Interaction devices for coordinating cooperative distributed,
intelligent Automation and Soft computing 6 (2) (2000) 173–184.
Ghenniwa, H., Michael, N., Shen, W., (2004) e-Marketplace for enterprise and cross
enterprise integration. (Online)
[www.dcce.ibilce.unesp.br/~mariot/03_06_JAVA_Artigo_3.pdf, Last Accessed: 08
August 2005].
Isuzu Environmental Report 2004: Creating Environmental Sound Plants (Online)

[http://www.isuzu.co.jp/world/environment/report/pdf/2004e_11.pdf, Last Accessed: 02
August 2005].
Java Agent Development Framework, JADE, (Online)[http://jade.tilab.com/, Last

Accessed 04 September 2005].
Jeanne, W., (2003) Creating a Strategic IT Architecture Competency Learning In Stages,

MIS Quarterly Executive Vol 2 No 1
John, W., Robert, B & Stephen, D., System Analysis and Design in a Changing World,
Ed 2, Course Technology, Canada, 2002, pp. 56-61
Kanban-an integrated system, (1996), (Online).

[http://www.geocities.com/Times Square/1848/japan21.html, Last Accessed: 4th
September 2005].
K Line Australia: Car Carrier Services. (Online)

[http://www.kline.com.au/Service/CarCarrier.aspx, Last Accessed: 01 August 2005].
Michelin Worldwide – Corporate Information: Implantations (Online).

[http://www.michelin.com/corporate/front/templates/affich.jsp?codeRubrique=12&lang=
EN, Last Accessed: 4th September 2005].
54
[http://www.themanufacturer.com/us/detail.html?contents_id=3112), Last Accessed: 3rd

September 2005]
The Manufacturer US (2005): Just-in-time drives on (online).

Tom B. (2005): The BEA WebLogic Platform and Host Integration, (Online).
[http://dev2dev.bea.com/pub/a/2005/03/host_integration.html?page=1, Last Accessed:
05, September 2005].
Turban, T., King, D., Lee, J., Viehland, D., 2004, Electronic Commerce: A Managerial
Perspective, Ed 3, Pearson Education, Inc., Upper Saddle River, New Jersey. Pp. 274
Yinsheng, L., Weiming, S., Ghenniwa, H., (2004) Agent-based web services Framework
and Development Environment. (Online) [http://www.blackwell-
synergy.com/doi/abs/10.1111/j.0824-7935.2004.00260.x?cookieSet=1, Last Accessed: 4
September 2005].
Zhengping, L. Melcolm, Y., Kumar, A, A Framework for Multi-Agent System Based

Dynamic Supply Chain Coordination, (Online)[ www.informatik.uni-
rostock.de/~/dasd/008.pdf, Last Accessed: 04 September 2005]
55
Appendix
NPV & ROI
FINANCIAL ANALYSIS FOR
TOYOTA PROJECT
Discount rate 10%
Model
Year 0 1 2 3 4 5 Total
Costs :
Development costs $1,035,000.00
Ongoing costs $320,000.00 $320,000.00 $320,000.00 $320,000.00 $320,000.00
Total Cost $1,035,000.00 $320,000.00 $320,000.00 $320,000.00 $320,000.00 $320,000.00
Discount Factor 1 0.909090909 0.826446281 0.751314801 0.683013455 0.620921323
Discounted Costs $1,035,000.00 $290,909.09 $264,462.81 $240,420.74 $218,564.31 $198,694.82 $2,248,051.77
Benefits $0.00 $2,150,000.00 $2,150,000.00 $2,150,000.00 $2,150,000.00 $2,150,000.00

Discount Factor 1 0.909090909 0.826446281 0.751314801 0.683013455 0.620921323
Discounted Benefits $0.00 $1,954,545.45 $1,776,859.50 $1,615,326.82 $1,468,478.93 $1,334,980.84 $8,150,191.55
Discounted Benefits - Costs ($1,035,000.00) $1,663,636.36 $1,512,396.69 $1,374,906.09 $1,249,914.62 $1,136,286.02 $5,902,139.79
Cumulative Benefits - Costs ($1,035,000.00) $628,636.36 $2,141,033.06 $3,515,939.14 $4,765,853.77 $5,902,139.79
ROI 262.54%
56

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BUSINESS CASE

Case Studies in I.T.

Name Student Email

Course Coordinator: Dr. Aditya K. Ghose

Supply chain management (SCM) aims to produce and distribute merchandise to

Due to the complexities in supply chain, the representation of the coordination of

In this Business proposal, coordination theory, optimization technology and agent

Lack of alternatives in the domestic supplier base and risk of currency

Additionally, without the full localisation of suppliers, currency exposure will

Problems arising in linear supply chain

Figure 1. Example of “milk run”

Over-reliance on forecast planning for production

Figure 2. Electronic Kanban EDI standard

Lack of Vertical industrial relations environment

TMCA currently only has vertical industrial relationships with automotive

Figure 3. Collaboration between vertical industries

Automotive shipments require specialised vehicle transport ships known as Roll-

environment is currently making forecasting difficult as well as preventing

2.2 Problem description

Goal 1: Provide a comprehensive domestic supplier base

Goal 2: Provide initiatives for a non-linear, hub-based supply chain system

Goal 3: Provide real-time updates on demand and supply allocation

Goal 4: Vertical industry logistics collaboration

Increasingly, automotive manufacturers in Australia are concentrating on their

possible to attain optimisation of operations within a single party involved where

Goal 1: Provide a comprehensive domestic supplier base

With the implementation of a supplier website, it will allow opportunities for

Goal 2: Provide initiatives for a non-linear, hub-based supply chain system

Due to the complexities in supply chain, the representation of the coordination of

Goal 3: Provide real-time updates on demand and supply allocation

Goal 4: Vertical industry logistics collaboration

With the implementation of an intelligent logistic coordinating agent in the form

Goal 1: Provide a comprehensive domestic supplier base

Goal 2: Provide initiatives for a non-linear, hub-based supply chain system

Goal 3: Provide real-time updates on demand and supply allocation

Goal 4: Vertical industry logistics collaboration

5.2 Concept Overview

5.2.1 Identifying the domestics suppliers and service providers

Automotive Suppliers and Service Providers:

• Active Plastic Industries Pty Ltd • P & O Ports Ltd

Table 1: Automotive Suppliers and Service Provider8

5.2.2 Current IT architecture, tools & technology platform

IT architecture is often assumed to follow business strategy, to align IT with the

Figure 4. Changing Resources Allocation across Architecture Stages9

5.3 Detail Solutions

Figure 5. Supplier website for Toyota America

Public / Access Existing

Figure 6. Access Flow From Toyota Australia Suppliers Website

5.3.2 Solution 2 (Agent-Oriented Domestic e-Marketplace)

5.3.2.1 General overview

Figure 7. Logical concept of the Domestic e-Marketplace

5.3.2.2 Integration with existing systems

Figure 8. Logical concept of system Integration.

5.3.2.3 Agent-Oriented e-Marketplace

All services (business, market, and integration) in an e-Marketplace usually involve

Figure 9. The architecture of the e-Auction within the proposed e-Marketplace

Below are the Agents for the proposed e-Marketplace:

User interface agents: The main functionality of user interface agents is to

Business-specific service agents: Are specialists that provide a collection of

functionality that is based on legacy applications or libraries, such as a product

Integration service agents are specialists that provide a collection of integration

5.3.2.4 Solution description / Scenario of the purpose e-Marketplace

5.3.3 Solution 3 (Real Time Inventory Tracking Module)

5.3.3.1 General Overview