Toyota—— Supply Chain Management

Network Logistics

Suppliers

Supplier S1, S2, and S3 in cluster C1 are picked up by truck T1 and delivered to cross-dock CD1.

Then, truck T3 picks up parts from CD1 and delivers them to plant P1.

Finally, truck T5 picks up parts from CD1 and delivers them to plant P2.

• JIT(just-in-time):
• make frequent deliveries in small lot sizes through synchronization and optimization of inventory levels
• Forces suppliers to be closer by exchange production information, technical information and logistic information

• Tier Structure. like pyramid structure from first-tier suppliers to third-tier suppliers.

• Information sharing- establish BAMA (Bluegrass Automotive Manufacturers Association) to sharing or feedback information between suppliers

• Cross-sharing of personnel management through:
• sending personal to suppliers to compensate for greater workload
• transferring senior managers to suppliers for top positions

Oversea Inbound logistics

Suppliers

• Minimal production cost, high quality, and technology innovation, and a good philosophical fit with Toyota. Focus on long-term relationships that underscores cooperation teamwork, and gradual mutual improvement

• Value analysis - intensive examination of the services, materials, processes, information systems, and flows of material.

• Single sourcing strategy - helps to optimize the company’s supply chain, lower production costs and produce better value for shareholders and customers.

Background

Supply Chain Overview

• North American Toyota production began in 1984 and has grown steadily over the years.
• Toyota has built more than 25 million cars and trucks in North America
• Over 5 million vehicles have been manufactured in Canada alone.

• Using of the vanning center.
• Parts are packed into plastic trays
• Arranged into groups to fit into a module for shipment
• Loaded into containers for shipment

• More than 750 suppliers in North American

• 2000 route runs, and 835,000 miles per day

• Toyota has 11 Plant Customers in network

• Five core trucking logistics partners

• Two core consolidation logistics partners

• Has 1,500 dealers

Vision & Mission

Objectives

Mission Statement: "To attract and attain customers with high-valued products and services and the most satisfying ownership experience in America."

Vision Statement: "To be the most successful and respected car company in America."

• Right Product
• Right Price
• Right Store
• Right Quantity
• Right Customer
• Right Time

TOYOTA—— Supply Chain Management

Distribution

Solutions

Problems

Benefits of TPS

Reducing the waste as much as possible.

Less movement of the producing labor, leads to less time in producing

Every step of the production can be checked, go smoothly and without any mistakes.

Good quality

Toyota Production System(TPS)

75%

Toyota manager may use a mixed strategy, such as a competitive approach for commodity-like suppliers and a cooperative approach for complex, high-valued service and materials.

Railhead

Yard

Plant

Dealer Lot

TOYOTA is facing enormous challenges over its problems with recalls.

Reasons:

TOYOTA may have grown more rapidly than its quality systems could keep up with.

In addition, its suppliers are unable to offer some materials with good quality

25%

Seek partnerships with supplier under the different type of products. TOYOTA should be consider price, quality and time when select supplier. Especially focus on supplier certification audited by a third part, such as ISO 9001.

• An integrated socio-technical system
• Organizes manufacturing and logistics for the automobile manufacturer
• Engine under which lean manufacturing, quality systems, just-in-time, and continuous improvement practices have been developed.

Two options for shipment of vehicles to the dealers

Pros:

• Minimize issues with purchase of materials and service parts.
• Reduces threats of inventory management.
• May bring increased experience and knowledge.

References

Geraint, J. (2007). The Toyota way. Retrieved from http://www.supplybusiness.com/previous-articles/spring-2007-issue/features/the-toyota-wayspring/

Iver, A. V., Seshadri, S., & Vasher, R. (2009). A strategic approach to the principles of TOYOTA’s renowned system: TOYOYA supply chain system. McGraw Hill.

Slideshare.net. (2010). Toyota supply chain management. [Powerpoint sides]. Retrieved from http://www.slideshare.net/udapat/toyota-scm?next_slideshow=1

Supply Chain Digest. (2010). Supply chain news: is “lean” to blame for Toyota’s recall issues. Retrieved November 21,2014, from http://www.scdigest.com/assets/On_Target/10-03-03-1.php

The economic. (2010). Toyota's supply chain. The machine that ran too hot. Retrieved November 20, 2014, from http://www.economist.com/node/15576506

Toyota. (n.d. a). Toyota in North America. Retrieved Novermber 10, 2014, from http://www.toyota.ca/cgi-bin/WebObjects/WWW.woa/wa/vp?vp=Home.AboutToyota.NorthAmericanization&language=english

Toyota. (n.d. b). How Toyota Production System (TPS) benefits your organization. Retrieved November 11, 2014, from http://www.toyota-forklifts.eu/en/company/Toyota-Production-System/Pages/default.aspx

Toyota. (n.d. c). Toyota Production System. Retrieved November 12, 2014, from http://www.toyota.com.au/toyota/company/operations/toyota-production-system

Thank You

Xiaotuo Xue

Chunyu Zhang

Tao Zeng