Toyota's Supply Chain

4069 Words Nov 19th, 2007 17 Pages
1.0 Executive Summary

The report details the findings on Toyota Motor Corporation's supply chain management in great description. Areas that will be covered in the report include the supply chain processes of Toyota, supply chain strategies that it adopts and the practical use of drivers that determine the performance of the entire supply chain in terms of responsiveness and efficiency.

The supply chain processes and strategies of Toyota are the fundamentals in its daily operations. By adhering Just-In-Time (JIT) manufacturing and Toyota Production System (TPS), Toyota emerges to be one of the world's largest automaker.

In addition, the above-mentioned drivers refer to transportation, facilities, information technology and
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4.0 Toyota Supply Chain Strategies

Toyota manages its supply chain using its company Toyota Production System (TPS). The TPS is a set of philosophies which organizes manufacturing and logistics at Toyota, including the interaction with suppliers and customers. With the implementation of the TPS, Toyota was able to greatly reduce lead-time and cost while improving quality at the same time. This enabled it to become one of the ten largest companies in the world.

The TPS is largely similar to "lean" manufacturing, to assist the company in the identification and steady elimination of waste. It is aimed at defining value, creating flow, and eliminating waste in various aspects including customer relations, product design, supplier networks and factory management.

The goal of the TPS is to incorporate less low-value human effort, less inventory, less time to develop products, and less space to become highly responsive to customer demands while producing top quality, error-proofed products in the most efficient and economical manner possible.

In order to eliminate waste, Toyota uses various strategies. The strategies are as followed:
4.1 Just-in-Time
Just-in-Time is an inventory strategy implemented to improve the return on investment of Toyota by reducing in-process inventory and its associated costs. The process is driven by a series

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