2. INTRODUCTION
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
3. SCM
Minimizing supply chain costs
while keeping
a reasonable service level
customer satisfaction
quality
on time delivery, etc.
4. Objective
Right product
Right price
Right store
Right quantity
Right customer
Right time
Higher profit
The right
Product
Higher
Profits
The right
Time
The right
Customer
The right
Quantity
The right
Store
The right
Price
=
+
+ +
+ +
8. 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
9. SUPPLIERS
“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
10. 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
11. Suppliers partnership hierarchy
Kaizen and learning
Joint improvement activities
Information sharing
Compatible capabilities
Control system
Interlocking structure
Mutual understanding and trust
12. 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. Purchasing challenges
Normal expectation : 3 to 4 % price reduction
per year after model year launch
Meet best price with Toyota quality
Trim master goal : 30% price reduction for new
vehicle launch
14. 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 route
capacity plans
15. Manufacturing
Toyota Production System
Best quality
Lowest cost
Shortest lead time
Best safety
High morale
Through shortening the production flow by
eliminating the waste
16. Manufacturing
Continuous improvement
JIT
People and teamwork
Jidoka – quality (make problem visible)
Waste reduction
Leveled production
Stable and standardize process
Visual management
Kanban – flow of correct information
17. DISTRIBUTION
In Japan, Toyota’s 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 each
channel offering only 15-25 models.
The Toyota dealers as a whole have approximately
5,000 outlets and 120,000 employees.
18. DISTRIBUTION
This way, each dealer can develop deep
knowledge of all models he has for sale, and
can make an effort to sell all car models
assigned to him, rather than only the few most
profitable ones.
19. 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 to
invest in the right things to improve. Such a
strategy motivates dealers to be more
proactive.
Both the dealers and Toyota must prosper
jointly.
Competition is a means to improve.
20. DISTRIBUTION
Toyota works with one distributor in each
country
Toyota markets cars in about 170 countries
through its overseas network consisting of
more than 160 importers/distributors and
numerous dealers.
Overall, China is the highest-growth market.