Sustained Innovation and Creativity - Toyota Industries Corporation

Research and DevelopmentIn keeping with its founding spirit of “Be ahead of the times through endless creativity, inquisitiveness andpursuit of improvement,” Toyota Industries carries out strategic research and development (R&D) that aimsnot merely at improving short-term business results but also at attaining sustained growth in the future.Recognizing that R&D activities are essential for maintaining the competitive advantage of the ToyotaIndustries Group in the years ahead, we undertake effi cient R&D activities by concentrating the allocation ofmanagement resources in specifi cally targeted fi elds.Toyota Industries’ R&D activities can be broadly classifi ed intothe two areas of product development and improvementsperformed independently within each business division andR&D undertaken mainly by the Research & DevelopmentCenter. The latter is conducted separate from the activitiesof the business divisions and carried out with a view towardCompany-wide management strategy.Toyota Industries is active in a variety of business domains,and each of its divisions possesses its own distinctivetechnological strengths, core technologies and marketcharacteristics. Instrumental to effi ciently developingnew products matched to customer needs, the technicaldepartments of each division must lead the way in productimprovement, technology development and appliedresearch. For this purpose, each division maintains its own staffof engineers, experiment facilities and research laboratoriesand engages in proactive technology development effortsguided by product development plans.The Research & Development Center is involved in R&Din such technology fi elds as materials fi elds that serve as acommon foundation for all divisions as well as R&D in newfi elds that include leading-edge technologies. In accordancewith specifi c research themes, we also collaborate withToyota Central Research & Development Laboratories, Inc.,an R&D facility of the Toyota Group involved in basic research,as well as with universities and other outside R&D institutions.The Research & Development Center, situated within theCorporate Center (corporate headquarters), handles thepromotion of Company-wide new business development andtechnology management. To enhance the effi ciency of ourCompany-wide R&D structure, the center facilitates lateraltransfers of technologies among divisions that span variousdomains and investigates new technology developmentthemes. At the same time, the center promotes the systematicand continuous creation of new products and services thatwill serve as pillars of future business utilizing the extensiveaccumulated technological know-how and external networks(both human and information) of each business division.Functioning as a development base for our informationsystems, our “e-Lab” IT research laboratory is engaged inR&D activities in various IT-related fi elds. This laboratory’sactivities include research on digital simulation technologiesfor shortening product development times and reducinglead-times from development to production and shipping.Also, the lab engages in the development of an optimalnetwork system for joint development of parts with suppliersas well as for parts procurement.In fi scal 2006, R&D expenditures totaled ¥31.2 billion,up ¥1.1 million (3.7%) from the previous fi scal year. R&Dexpenditures accounted for 2.1% of consolidated net sales, adecline of 0.3 percentage point. By segment, R&D expensesamounted to ¥16.6 billion in the Automobile Segment, ¥12.9billion in the Materials Handling Equipment Segment, ¥731million in the Textile Machinery Segment and ¥1.0 billion in theOthers Segment.e-Lab, Toyota Industries’ development basefor in-house information systems46 Toyota Industries Corporation Annual Report 2006