3.

Articulate some of the issues (at least 5) that a global supply chain company may
face while deciding their procurement strategy. Clearly write the company you are
referring to

Ans. There are various challenges while deciding procurement strategy for a global
supply chain company. We are considering the example of Toyota Industries
Corporation. As Toyota Industries Corporation is involved in a wide range of
business fields and procures the parts, materials, and equipment for these many
different businesses from suppliers all over the world. There is linkage between
procurement and outsourcing strategy. Some of the issues faced by them are as
follows:

1. Supplier relationships: Toyota always believes in mutually beneficial and long

term relationship with suppliers. Such relationships are based on trust and
confidence. If any supplier leaves it becomes hard to find new trustworthy
supplier who will stay in long term relationship.
2. Outsourcing and In-sourcing: Due to dependency on capacity Toyota
outsources its 70% of the components. So according to framework it belongs
to risky category.
3. Demand issue: Toyota is a global company their product has high demand
across world. As these demands are worldwide there is high uncertainty. To
cope up with these demands is a challenging task for the company and its
suppliers. To implement Just in time is major challenge in such situations.
4. Environmental impact considerations: Toyotas has positive behaviour about
environmental policies. They look for the suppliers who can supply the
products which are environment friendly.
5. Impact on profit: Profit percentage is related to suppliers, as number of
suppliers increases the profit margin decreases. They have to plan
accordingly.
6. Government norms: As terms and condition differs according to country.
Toyota must have to make a plan which satisfies all norms. For eg While
selecting a supplier Toyota have to look for the country tax regime.

References:

https://www.toyota-industries.com/company/procurement/policy/index.html