Toyota Supply Chain

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SUPPLY CHAIN MANAGEMENT OF TOYOTA MOTORS

INTRODUCTION
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Toyota Motor Corporation
Founded1937
FounderKiichiro Toyoda
HeadquartersToyota City, Japan;
IndustryAutomotive, Robotics Financial services and Biotechnology ProductsEconomy/mainstream/luxury vehicles
RevenueUSD $203.26 billion (2009)
Employees316,121

MISSION OF SUPPLY CHAIN

Minimizing supply chain costs while keeping a reasonable service level customer satisfaction quality on time delivery, Etc
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Objective
□ Right product
□ Right price
□ Right store
□ Right quantity
□ Right customer
□ Right time

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 compensate for greater workload ← Toyota transferring senior managers to suppliers for top positions □ “market price minus” system, not “supplier cost plus” system ← Value analysis reduces costs

□ Production smoothing enables suppliers to maintain a constant volume of business □ Focus is on long-term relationships that underscores cooperation, teamwork [pic]

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 price through bidding as a way to choose a supplier □ Trained suppliers as per requirement

Suppliers partnership hierarchy
□ Kaizen and learning
□ Joint improvement activities
□ Information sharing
□ Compatible capabilities
□ Control system
□ Interlocking structure...
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