toyota scm
TRANSCRIPT
Supply Chain Management of
By,Annirudh
AnjuMinakshi
Sai GaneshShashankDebtanu
BUSINESS MODEL
CONSISTS OF: Designing Manufacturing Selling automobiles Calty Design Research Toyota Racing Development
TYPICAL DIVISIONS WITHIN OPERATIONS:• Engineering and manufacturing• Research and Development• Sales• Financial services
KEY FEATURES OF TOYOTA BUSINESS MODEL:• Integrated Low Cost• Differentiated StrategyIntegrated Low Cost:-•Heightened the value and fortifies the competitiveness of product•Purchasing the world's best parts at the lowest cost with the shortest lead times•Higher quality at lower costs by creating standardized, multipurpose components•In 2000, Toyota launched a new cost effective strategy called CCC21 (Construction of Cost Competitiveness for the 21st century), for Low Cost operational expenses•Intensive coordination with its suppliers•Finding the lowest operational cost•Toyota steadily feeds cost improvements back into the product to raise their valueDifferentiated Strategy•Unique niche or strategy that separates them from the competition•Undertaken manufacturing revolution by integrating four areas: design, production engineering, procurement, and component supply
SUCCESS OF TOYOTA’S BUSINESS MODEL
Market share of 14% in the first four months of this year
2.3% jump from the previous year Toyota ranks fourth in United States sales
DRIVERS OF SUPPLY CHAIN•Facility: •Vehicles coming out of assembly line are moved into warehouse called “Marshaling yard” .•Fitting accessories, price tag and final quality assurance takes place here.
•Inventory:•Just-in – time based inventory method.• Pull based system and kanban methods are followed.
•Transport:Majority of transport of raw material through truck , since suppliers stay close to plant.Finished products transported through truck or rail for transport within the country and ships for export.Road transport is provided by third party logistic providers.•Information:Parts and master database is maintained for part name, supplier, lot size information.13 week forecasting is given to suppliers to provide them with guidance.
Supply chain overview
SuppliersParts
Assembly plant
Inbound logistics
Inspection
Dealers
Outbound
logistics
Toyota supply chain
production
customers
Suppliers : Suppliers provide thousands of parts and components that go into the
vehicle. Parts and components are received from Tier 1 suppliers through inbound
logistics. Supplier chain contains several levels –tier 1,tier 2,….and so on. Since Toyota relies on JIT it has fewer but reliable tier 1 suppliers. Eg : Denso, Bridgestone etc
Inbound Logistics : Company establish partnership with third party logistic providers Company organizes many of its suppliers into clusters based on
geographic location. Parts are picked up from those suppliers by trucks on a milk route and
delivered to regional cross dock.
At cross dock, parts are unloaded and staged for each assembly plant and then loaded to trucks which take parts directly to each plant.
After the parts are unloaded, the truck is reloaded with the corresponding empty returnable containers.
Returnable containers flow in reverse route
Inbound logistics planning –steps
Network design-to analyse
locations of suppliers
Determine which cross
dock is located nearest to suppliers
Transport to plants and containers travel in
reverse route
Transport parts to cross docs
and stage them for each
assembly
Production
• Vehicles are produced at the final assembly plant from the parts provided by hundreds of suppliers.
•The plant is subdivided into shops. The vehicle is born in the body shop where the frame and body are formed.
•The body parts are stamped in the stamping shop by presses.
•The body shop is where numerous robots are used to weld the body parts together.
•After body being assembled, it moves to paint shop
•After painting ,it moves to final line where supplier parts are installed to make finished vehicle.
•Final Inspection is done and moved to yard.
Outbound logistics
Vehicles at marshaling
yard Accessories installation
Final quality assurance
Transport to dealers
Dealers :
•responsible for selling the vehicles produced by the manufacturer to the retail customers.•Toyota s sales model is designed so that a high percentage of vehicles is sold from arelatively low level of dealer stock
Toyota Distribution model
Distribution model
Local production model
Overseas production model
European distribution model
Effect of supply chain on the company
Considering suppliers and dealers as partners, sharing profits with them, has helped to manage supply chain efficiently.
By leveling out production (heijunka) and synchronizing with demand and supply has helped to maintain stability in supply chain.
By effective demand forecasting , production and supply chain activities are managed effectively .
Suppliers are categorized as clusters based on geographic location and single truck picks up part from the cluster increasing the efficiency of supply chain..
Toyota takes responsibility for procuring parts from supplier which increases reliability on inbound logistics.
Concerns Toyota took its single source strategy to
risky extremes without proper risk management oversight, need closer observation on tier-2 and tier-3 suppliers.
Bigger expansion means working with unfamiliar suppliers who may not have proper understanding of Toyota culture.
Recommendation Benchmark Tier-2 and Tier-3 suppliers as
per Tier-1 suppliers Scope for improvement in Outbound
Logistics
THANK YOUFOR YOUR PATIENCE