Toyota has a extensive supply chain management system that focuses on long-term relationships and cooperation between all parts of the chain. They organize suppliers into tiers and encourage communication across tiers. Logistics aims to optimize packaging, transportation and timing. Manufacturing follows the Toyota Production System for quality and efficiency. Distribution is handled through a global network of importers, distributors and dealers.

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