By Samer Salameh Business Administration

Year 2 Group 8832

About Toyota

Toyota is a Japanese automotive manufacturer headquartered in Toyota Aichi, Japan. In March 2014 the Multinational corporation consisted of 338,875 employees worldwide.

Toyota was the largest automobile manufacture in 2012 (by production) ahead of the Volkswagen Group and General Motors.

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 data.

About Toyota

The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create automobiles.

Toyota Motor Corporation produces vehicles under 5 brands, including the Toyota brand, Hino, Lexus, Ranz, and Scion.Toyota Motor Corporation’s vehicle production system is a way of “making things” that is referred to as “lean

manufacturing system.”

The TPS (Toyota Production System) was developed to improve Quality and Productivity.

Objective“making the vehicles ordered by customers

in the quickest and most efficient way, in order to deliver the vehicles as quickly as

possible.”Toyota's management philosophy has evolved from the company's origins and has been reflected in the terms "Lean Manufacturing" and Just In Time Production, which it was instrumental in developing. Toyota's managerial values and business methods are known collectively as the Toyota Way. In April 2001, Toyota adopted the "Toyota Way 2001", an expression of values and conduct guidelines that all Toyota employees should embrace. Under the two headings of Respect for People and Continuous Improvement, Toyota summarizes its values and conduct guidelines with the following five principles: Challenge, Kaizen (improvement), Genchi genbutsu (go and see), Respect, Teamwork

’Marketing

Toyota's marketing efforts in North America have focused on emphasizing the positive experiences of ownership and vehicle quality.In Japan, Toyota currently maintains separate dealership sales channels .

The first sales channel established in 1946 called "Toyota Store" sells large luxury sedans such as the Toyota Century, and the Toyota Crown. In 1955 the "Toyopet Store" arrived, originally established to sell the Toyota Corona and the Toyopet ToyoAce truck. (Toyota's five channel dealerships in Japan chronology in Japanese).

Marketing

Toyota also operated a commercial dealership called Toyota Diesel Shop from 1957 until 1988, that sold various commercial platform trucks, buses, and forklifts, such as

the Toyota Dyna and the Toyota Coaster  .Hino products were sold at specific Hino locations, and shared at Toyota Diesel Store locations after Toyota acquired the company in 1967 .

Starting in 1980, the Diesel Shop also sold the Starlet, Corolla, Corona, Vista and Crown installed with diesel engines .

When the Toyota Diesel Store was disbanded, commercial products were divided between Toyota Store and Toyopet Store locations.

SWOT Analysis Strengths: New investment by Toyota in factories in the US and China saw profits rise, against the worldwide motor industry trend which was suffering heavy losses .

In 2003 Toyota knocked its rivals Ford into third spot, to become the World's second largest carmaker with 6.78 million units. The company is still behind rivals General Motors with 8.59 million units in the same period.

Weaknesses: Toyota had quite a few large-scale vehicle recalls over the past few years. The company recalled 9 million vehicles in 2009-2010 and 7.43 million cars in 2012.Toyota markets most of its products in the US, Europe and in Japan. Therefore it is exposed to fluctuating economic and political conditions those markets. Emerging economies as China or India make only a small percentage of all Toyota’s sales.

Opportunities: Lexus and Toyota now have a reputation for manufacturing environmentally friendly vehicles .

Toyota is to target the 'urban youth' market. The company has launched its new Aygo, which is targeted at the streetwise youth market. The vehicle is a unique convertible with inbuilt sub woofers.Toyota is expanding its market share and operations in emerging economies like India and China.

Threats: Toyota faces tremendous competitive rivalry in the car market. Competition is increasing almost daily, with new entrants coming into the market from China, South Korea and new plants in Eastern Europe.

Toyota Group Worldwide

Supply chain management At Toyota

Customer Dealer Manufacture Vendor

Customer Local Parts

Import PartsPC store ProductionReceiving

Dock

Dealer

• 1 and 2 Linked between internal and vendor STOCK REDUCTION USING KANBAN ( Kanban Cyclic ) & SEQUENTIAL PARTS DELIVERYKANBAN:- A small time that is the key control for JIT production

Logistical OperationsInbound Logistics: toyota obtains raw materials, they do not process their own, or create their own, they use a third party, they hand out the small parts, such as leather seats, steering wheel, tire, to local companies, but to the nature of strategic importance, like a machine, they import from Japan, all to maintain the quality standard that was created by toyota,

Supply chain and production planning responsibilities are more divided across Toyota’s purchasing, manufacturing and logistics management than at OEMs with integrated supply chain management organizations. The production control teams at each plant handle parts ordering and generate a build plan that is shared with logistics (at some OEMs, logistics or supply chain management does the programme planning directly). Once material is delivered to the factory loading bays, it is each production site, rather than TME, which is responsible for in-plant and line side logistics.

Logistical Operations

Outbound Logistics: the output of the production process at the plant, it is the finished product, the car is directly sent to the Toyota dealer either local or a region.

TME contracts a large group of outbound providers, using around ten shipping lines, ten providers at VDCs and 45 partners for land (mostly truck). While most providers at VDCs overlap with land transport, the company works with around 55 companies compared to just seven on inbound. The true number of companies handling Toyotas is actually much higher, as many countries in Europe have national sales organizations responsible for distribution and final delivery. A prominent example is Russia, where TME manages delivery up to ports of entry at St Petersburg and Ust-Luga, but Toyota Motor Russia (TMR) handles domestic distribution.

Internal Logistics

INTEGRATED Supply Chain Management

RAW MATERIAL SUPPLIERS

1ST & 2ND TIRE

SUPPLIERS

MANUFACTURING PLANTS WAREHOUSE

DEALER

END CUSTOMER

INTERNATIONAL COLLABORATION

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

Suppliers

“-market price minus” system, not “supplier cost plus” systemValue analysis reduces costs

-Production smoothing enables suppliers to maintain a constant volume of business

-Focus is on long-term relationships that underscores cooperation, teamwork

Key to logistics performance

Packaging : mixed box size, small pallet sizeDedicated transportation serviceConsistent daily route, period route revisionGood timing at all connection pointsOrder fluctuation allowance built into route capacity plans

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 .

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 .

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

Distribution

Toyota works with one distributor in each countryToyota 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.

Drivers of the Supply Chain

Facility :Vehicles coming out of an assembly line and are moved into

warehouses called ''Marshaling Yard.''Fitting Accessories, Price Tags, and final quality assurance takes place here. 

Inventory:Just in time- is time based inventory method. It refers to the manufacturing and conveyance of only what is needed,

when is needed, and in the amount needed in the system .”Pull Based system and Kanban methods are followed.The Kanban is unique production control method called the "kanban system" plays an integral role. The kanban system has also been called the "Supermarket method" because the idea behind it was borrowed from supermarkets. 

Transport: Transportation of raw materials is usually transported by truck, since suppliers are close to the plant.Finished products are transported by trucks or railways within the country and ships for exports.Road Transport is provided by the third party logistic providers.

’‘Just in Time’’ Method

"Just-in-Time" means making "only what is needed, when it is needed, and in the amount needed." For example, to efficiently produce a large number of automobiles, which can consist of around 30,000 parts, it is necessary to create a detailed production plan that includes parts procurement. Supplying "what is needed, when it is needed, and in the amount needed" according to this production plan can eliminate waste, inconsistencies, and unreasonable requirements, resulting in improved productivity.

Kanban System

In the TPS (Toyota Production System), a unique production control method called the "kanban system" plays an integral role. The kanban system has also been called the "Supermarket method" because the idea behind it was borrowed from supermarkets. Such mass merchandizing stores use product control cards upon which product-related information, such as a product's name, code and storage location, are entered. Because Toyota employed kanban signs for use in their production processes, the method came to be called the "kanban system." At Toyota, when a process refers to a preceding process to retrieve parts, it uses a kanban to communicate which parts have been used.

Kanban System

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