Toyota Supply Chain

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SUPPLY CHAIN MANAGEMENT OF TOYOTA MOTORS

INTRODUCTION [pic] Toyota Motor Corporation Founded 1937 Founder Kiichiro Toyoda Headquarters Toyota City, Japan; Industry Automotive, Robotics Financial services and Biotechnology Products Economy/mainstream/luxury vehicles Revenue USD $203.26 billion (2009) Employees 316,121

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

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