20851275 Toyota Supply Chain

8/4/2019 20851275 Toyota Supply Chain

1/21

TOYOTA

SUPPLY CHAIN MANAGEMENT


2/21

INTRODUCTION

Toyota Motor Corporation

Founded 1937

Founder Kiichiro Toyoda

Headquarters Toyota City, Japan;

Industry Automotive, Robotics Financialservices and Biotechnology

Products Economy/mainstream/luxury

vehicles

Revenue USD $203.26 billion (2009)

Employees 316,121


3/21

SCM

Minimizing supply chain costs

while keeping

a reasonable service level

customer satisfaction

quality

on time delivery, etc.


4/21

Objective

Right product

Right price

Right store

Right quantity

Right customer

Right time

Higher profit

The right

ProductHigher

ProfitsThe right

TimeThe right

CustomerThe right

QuantityThe right

StoreThe right

Price =++ ++ +


5/21

TOYOTA SUPPLY CHAIN

OVERSEAS

NETWORK(EXIM)

PARTS/SERVICECENTERS

COMPONENTSSUPPLIER

GROUPRAW

MATERIALSUPPLIERS

WAREHOUSE

DISTRIBUTOR

ASSEMBLY PLANT

DEALER

CUSTOMER


6/21

INTEGRATED SCM

RAWMATERIALSUPPLIER

S

1ST & 2NDTIRE

SUPPLIERS

MANUFACTURING PLANTS

WAREHOUS

E

DEALER

ENDCUSTOME

R

INTERNATIONAL

COLLABORATION


7/21

SMOOTHER MATERIAL FLOW


8/21

SUPPLIERS

Organized suppliers into functional tiers

First-tier suppliers: worked together in a product-development team

Second-tier: made individual parts Encouraged cooperation and communication among

first-tier suppliers

Cross- sharing of personnel through

Toyota sending personnel to suppliers to compensatefor greater workload

Toyota transferring senior managers to suppliers fortop positions


9/21

SUPPLIERS

market price minus system, not supplier cost

plus system

Value analysis reduces costs

Production smoothing enables suppliers tomaintain a constant volume of business

Focus is on long-term relationships that

underscores cooperation, teamwork


10/21

Procurement

Suppliers are the partners

Suppliers are the integral elements of Toyota

Located within 56 miles radius

Security to the suppliers for guaranteed order

gradual mutual improvement, rather than pricethrough bidding as a way to choose a supplier

Trained suppliers as per requirement


11/21

Suppliers partnership hierarchy

Kaizen and learning

Joint improvement activities

Information sharing

Compatible capabilities

Control system

Interlocking structure

Mutual understanding and trust


12/21

Managing suppliers

Suppliers are extensions of Toyota

Care and develop as own associates

Long term partnership

Tier structure : levels of responsibility

Strict cost target and timing

Integrated system (JIT)


13/21

Purchasing challenges

Normal expectation : 3 to 4 % price reductionper year after model year launch

Meet best price with Toyota quality

Trim master goal : 30% price reduction for newvehicle launch


14/21

Key to logistics performance

Packaging : mixed box size, small pallet size

Dedicated transportation service

Consistent daily route, period route revision

Good timing at all connection points

Order fluctuation allowance built into routecapacity plans


15/21

Manufacturing

Toyota Production System

Best quality

Lowest cost

Shortest lead time

Best safety

High morale

Through shortening the production flow byeliminating the waste


16/21

Manufacturing

Continuous improvement

JIT

People and teamwork

Jidoka quality (make problem visible)Waste reduction

Leveled production

Stable and standardize processVisual management

Kanban flow of correct information


17/21

DISTRIBUTION

In Japan, Toyotas sales and marketing work is divided

into four distribution channels

Toyota (mostly high-end, large cars),

Toyopet (medium size),

Toyota Corolla(compact), and

Netz Toyota (compact).

Overall, Toyota offers about 60 car models, with eachchannel offering only 15-25 models.

The Toyota dealers as a whole have approximately5,000 outlets and 120,000 employees.


18/21

DISTRIBUTION

This way, each dealer can develop deepknowledge of all models he has for sale, andcan make an effort to sell all car models

assigned to him, rather than only the few mostprofitable ones.


19/21

DISTRIBUTION

Toyota applies the Toyota Way to manage

dealers, based on three basic principles:

Dealers are free to make independent

decisions, and Toyota can only help them toinvest in the right things to improve. Such astrategy motivates dealers to be moreproactive.

Both the dealers and Toyota must prosperjointly.

Competition is a means to improve.


20/21

DISTRIBUTION

Toyota works with one distributor in eachcountry

Toyota markets cars in about 170 countries

through its overseas network consisting ofmore than 160 importers/distributors andnumerous dealers.

Overall, China is the highest-growth market.


21/21

TOYOTA GROUPWORLDWIDE

20851275 Toyota Supply Chain

Documents