Supply Chain Management and Lean Production Through-Out the World

The automobile industry has a long history of mergers, acquisitions, partnerships and alliances. In 1904 Ford Motor Company partnered with a Canadian carriage-maker. Though not a vertical merger, the partnership increased Ford’s production efficiency. The most recent automobile

(Select USA, n.d.), have identified the United States as having one of the largest automotive markets in the world, as it is home to thirteen (13) auto manufacturers. Similarly, Investopedia.com, (n.d.), states that the North American automobile production market, is dominated by what is known as the “Big Three”, which includes; General Motors, producers of Chevrolet, Pontiac, Buick, and Cadillac, Chrysler, producers of Chrysler, jeep and Dodge, and Ford Motors, producers of Ford, Lincoln and Volvo”.

Just like the other industries such as apparel, electronics, and consumer goods, the automobile industry has accelerated its foreign direct investment, cross border trade and global production. The automobile industry has increased outsourcing and bundled value chain activities in major supplier chains. As a result, more developed countries that serve as suppliers have increased their involvement in trade and FDI. With these increased supplier capabilities, large national suppliers have become global suppliers and are now controlling multinational operations. This is because of their increased capability of providing good and services to various lead firms all over the world. The automotive industry has a distinct firm structure. This

Much like any industry, the American automobile industry is subject to global competition. As stated earlier, the automobile was first perfected in Germany and France. In 1995, the United States and Japan made a trade agreement that provided more dealer outlets and allowed easier replacement part selling in each other’s countries (Nauss 1995). This makes auto parts and auto-replacement parts for Japanese cars easier to access in the United States and vice versa. Not only does this provide for more US jobs, but it also provides for more Japanese jobs in the auto industry (Nauss 1995)! But furthermore, it increases the global competition. “Japanese

The United States automobile industry is one characterized by incumbent behemoth corporations whose distribution channels span the world. Companies like Toyota, General Motors, and Volkswagen form entire segments of their respective countries’ economies and have dominated the auto industry for generations.

According to National academies press, the U.S. automotive industry is composed of three major U.S.-based manufacturers (Chrysler, Ford, and General Motors), several non-U.S.-based (transplant) vehicle assemblers, and a vast network of parts and components suppliers. Collectively, the industry produces and sells approximately 15 million cars and light trucks each year. And that manufacturing facilities include small specialty-parts plants, large foundries and engine and transmission plants, and vehicle assembly plants, which employ thousands of people and produce several hundred thousand vehicles per year. (1999, p52)

The American automotive industry provides a unique and very important role in the economy of the United States of America. Not only in the United States but even around the world, the American Auto Industry is a leader in job creation, production, exportation and even in research and development. In the mid-20th century, America’s top auto manufactures have been General Motors, Ford and Chrysler. They were producing two-thirds of all the cars and vehicles sold around the world. There are still other smaller car manufacturers such as Anteras, Avanti, Shelby American, De Lorean, Dragon and several others. As of 2010 the auto industry contributed to about 4% of the United States Gross Domestic Profit and employed about 8 million jobs.

Ford Motor Company has one of the most complex supply chain in the industry. Ford has achieved several of their goals by fostering long-term relationships with their suppliers through active

Supply Chain Management involves the process of managing, monitoring, controlling and constantly coordinating supply related activities among manufacturers, suppliers, wholesalers, retailer and the consumers. All this is done while integrating supply management with demand management, not only within but also across companies. Since all the processes involved in managing supply chain activities require a robust system in place, every company turns to technology for efficient and effective synchronization and smooth deployment of processes along with careful alignment of resources for timely completion of supply related activities.

At the turn of the 21st century, Korea’s Motor Company (HMC) planned to become a global leader in the automotive industry. In 2002, HMC started to enter China which is one of the largest potential vehicle markets in the world with a 1.3 billion population and an extensive road system. China was the world’s third-largest demand of automobile while the worldwide auto market was stagnating. However, there were numbers of major auto makers established in the market. The assignment below will analyze the China business environment, HMC strategy and Marketing and distribution.

Global COMPETITION in the industry: Global competition has expended in the auto industry because of an increase in global trade. This has resulted in the decline of sales in the American auto industry whilst sales in the Asian industry especially China has increased. In 2009 sales in the U.S. hit their lowest point meanwhile, it doubled in Asia generally, especially in China. (loc.gov. 2014). One of the reason for this decline in the American Auto sales is because the Japanese automakers have altered the U.S. manufacturing models and are selling it in the global market at a less expensive rate. The price and innovation is attracting a lot of customers’ to this part of the world leaving the American industry to suffer.

When analyzing and industry, it is important identify and define the industry in question before the industrial analysis begins (Parnell, 2014). Additional important considerations when analyzing an industry include determining which stage in the industry life cycle the industry currently resides, as well as a thorough identification and analysis of key competitors. Skoda operates in the global automobile manufacturing industry. The global automobile manufacturing industry, for the purpose of this analysis, consists of automobile manufacturers that produce automobiles for commercial purposes. The global automobile manufacturing industry has seen increasing competition as the world has moved towards more free trade agreements and increased globalization. The global automobile manufacturing industry is still in its growth stage as evidences by increasing number of consumers in the world’s most populous markets, such as China and India. New companies are rushing into the automobile industry in order to meet the needs of this potentially huge consumer base, and currently dominant companies such as GM, Toyota, and Honda are quickly expanding into the markets, in many cases signing joint-ventures with companies already present in the market (Associated Press, 2015). Important competitors for Skoda include Toyota, Honda, GM, and a variety of joint-venture automobile producers in its key markets. While new companies have the potential to disrupt the industry, the high entry

When the entire analysis process was completed, it was possible to identify how Toyota, having created the Lean Production method, had higher standards to any competitor in the industry. In this way, it began to replicate this method in many production plants in US and Europe. However, not only the comparative analysis of the production processes was made, but also extended to the supply chain. Once again, the results were surprising since the performance of Toyota in terms of the supply chain was much more efficient than other companies. In this way, they began to adopt similar measures to those of Toyota´s practices in order to maximize resources and making the transition from a mass production model to a Lean Production model (Graves A. and Madigan, D., 2012).

Although Shiv industries excelled in automobile industries, but the changing global trends in this industry was a key concern for Shiv’s management. Due to internationalization of this market, the foreign auto manufacturers were rapidly replacing the local suppliers in terms of

However, to deal with intensification of competition and dynamic demands, the company was proactive in forming business alliance to pull product into the marketplace quickly. In this way, the company was exhibiting an agile approach. Company 4, premium brand manufacturer/retailer, also concentrated on building relationships, again to achieve leagility in the supply chain. This was mandatory as the company was dealing with a high quality fashion product with small batch quantities. In summary, they concluded companies in textiles and clothing needed to be able to respond quickly to changing markets and be able to provide quick replenishment. However, they were not able to store large quantities as products had a very short life cycle and fashion markets were seasonal. Therefore, the textiles and clothing industry did not neatly fit into either a lean or agile supply chain paradigm, but instead it was a combination of the two paradigms, leagile. Agarwal et al. (2006) presented a framework for modelling and assessing the performance of lean, agile and leagile supply chain on the basis interdependent variables. Considering the performance of supply chain which implies how much the supply chain is responsive to the needs of the markets, they implemented and utilized the framework for modelling performance of lean, agile and leagile supply chain. By using the framework, they could analyse the