1. TOYOTASUPPLY CHAIN MANAGEMENT
Presented by: Irma, Robert, Butele &NGU
JAPAN

2. Overview
 History
 Supply Chain Management
 Suppliers
 Logistics
 Manufacturing
 Distribution

3. History
Toyota comes to existence
 Founded:1937
 First car: Model AA
 Founder: Kiichiro Toyoda
 Headquarters: Toyota City, Japan

4. Supply Chain Management
Objective
Right
Product
+ Right
store
+ Right
Quantity
+ Right
Price
+ Right
Customer
+ Right
Time
= High
Profits
Minimizing supply chain costs but still;
• A reasonable service level
• Customer satisfaction
• Quality
• On time delivery…

5. 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

6. 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

7. Logistics
 Analyzing supplier location with close location
 Packaging : mixed box size, small pallet size
 Dedicated transportation service
 Consistent daily route, period route revision
 Good timing at all connection points

8. Manufacturing
 Toyota Production System
 Best quality
 Lowest cost
 Shortest lead time
 Best safety
 Through shortening the production flow by
eliminating the waste

9. Manufacturing
 Continuous improvement
 JIT
 People and teamwork
 Jidoka – quality (make problem visible)
 Waste reduction
 Leveled production
 Visual management
 Kanban – flow of correct information

10. DISTRIBUTION
 In Japan, Toyota’s sales and marketing work is divided
into four distribution channels
 Toyota (large cars),
 Toyopet (medium size),
 Toyota Corolla(compact), and
 Netz Toyota (compact).
 The Toyota dealers as a whole have approximately
5,000 outlets worldwide.

11. DISTRIBUTION
 Toyota applies the “Toyota Way” to manage
dealers, based on three basic principles:
 Making dealers proactive
 Mutual benefit between Toyota and Dealers to prosper jointly.
 Accept competition to improve.
 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.

12. Publication bibliography
 Toyota Company History from 1867 to 1939: Toyota. Available online at
http://www.toyota.co.jp/en/history/1867.html.
 2011 Geneva Motor Show: Scion iQ electric car to debut (2011). In Consumer Reports. Available
online at http://news.consumerreports.org/cars/2011/02/preview-scion-iq-electric-car-to-debut-in-
geneva.html.
 TOYOTA MOTOR CORP/ 2013 Annual Report Form (20-F) (2013): United States Securities and
Exchange Commission. Available online at
http://www.sec.gov/Archives/edgar/data/1094517/000119312513268044/0001193125-13-268044-
index.htm.
 WORLD MOTOR VEHICLE PRODUCTION OICA correspondents survey WITHOUT DOUBLE
COUNTS WORLD RANKING OF MANUFACTURERS Year 2011 (2013): OICA. Available online
at http://oica.net/wp-content/uploads/ranking-without-china-30-nov-12.pdf.
 Abuelsamid, Sam (2008): Toyota tops big company CAFE ratings for 2007 model year with 29.69
mpg – Autoblog: AutoBlog.com. Available online at http://www.autoblog.com/2008/07/25/toyota-
tops-big-company-cafe-ratings-for-2007-model-year-with-29/.
 Alan Ohnsman and Kae Inoue; Ohnsman, Alan; Inoue, Kae (2009): Toyota Will Shut California
Plant in First Closure: Bloomberg. Available online at
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJlxuxndoOsM.

13. Moving Forward