Toyota Supply Chain Management Essay

4573 words - 19 pages

1.0 Introduction

Toyota Motor Corporation is a Japanese automotive manufacturer headquartered in Toyota, Aichi, Japan. In March 2014 the multinational corporation consisted of 338,875 employees worldwide and, as of November 2014, is the eleventh-largest company in the world by revenue. Toyota was the largest automobile manufacturer by production in 2012 ahead of the Volkswagen Group and General Motors. In July of that year, the company reported the production of its 200-millionth vehicle. Toyota is the world's first automobile manufacturer to produce more than 10 million vehicles per year. It did so in 2012 according to OICA, and in 2013 according to company was data. As of July ...view middle of the document...

The Toyota Technical Center, a 14-story building, and the Honsha plant, Toyota's second plant engaging in mass production and formerly named the Koromo plant, are adjacent to one another in a location near the headquarters. Vinod Jacob from The Hindu described the main headquarters building as "modest". In 2013 company head Akio Toyoda reported that it had difficulties retaining foreign employees at the headquarters due to the lack of amenities in the city.

2.0 Issues
The issues regarding Toyota are as follows:
2.1 Toyota Production Disrupted By Supply Problems
A logistics problem is causing a disruption in the supply of parts to the Toyota plants in Cambridge and Woodstock, setting back car production by "thousands of vehicles," a company. "The production is down significantly," said Greig Mordue, general manager at Toyota Motor Manufacturing Canada. The problem facing by Toyota recently for several weeks. The slowdown is, in turn, affecting other companies that supply parts to Toyota as well a cross boundaries(Around the world). There are also "ongoing challenges in the sequencing of our Toyota parts pick-ups and it is related to our logistics system, so it is not specific parts or even from a specific location and it is one of the challenge in our supply chain system” (Morgan Mordue). Toyota face the same problem in 2001 which is several years ago when went through major earthquake and tsunami in Japan. In this case, the supply chain problems are causing more of a "start-stop situation" that the Toyota has to manage its way through.

2.1.1 Strategy 1: Delegate more design work to outside contract engineers and take on new suppliers.
Accelerated design cycles strained the company’s development and production systems and pushed the current suppliers to the final limits and strength, creating the conditions for supplier and quality failures. The combination of rapid growth and increased product complexity has had major implications for Toyota’s supplier management system and its overall performance. Around 70% of the value added in Toyota’s vehicles comes from parts and subassemblies produced by its suppliers. So the consequences of the growth and complexity were felt across the company’s supply chain. First, Toyota personnel were stretched increasingly thin as the company’s growth accelerated. In response to the growth, Toyota had to delegate more design work to outside contract engineers and take on new suppliers because the internal engineering resources and existing supplier base couldn’t keep up with the demands.

2.2 Decline in Toyota sales volume due to poor design and core quality
Toyota Motor Corp. of Japan has become the first automobile manufacturer ever to beat 10 million units in annual sales, and operating profit set a new record for the first time in six years. However, the firm is only beginning to address fundamental problems in profitability, quality management, parts...

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