NATIONAL ECONOMICS UNIVERSITY

SCHOOL OF TRADE AND INTERNATIONAL ECONOMICS

GROUP ASSIGNMENT
SUBJECT: GLOBAL SUPPLY CHAIN MANAGEMENT

TOPIC: ANALYZE GLOBAL SUPPLY CHAIN OF TOYOTA

GROUP 3
CLASS: International Business Administration EEP 60B
LECTURER: Master Tran Hoang Kien

Hanoi, 2020

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 MEMBERS OF GROUP 3
STD’s NAMES ID
1 Nguyễn Thị Thanh Vân 11185537
2 Nguyễn Thị Minh Huyền 11182329
3 Hà Thu Thủy 11184808
4 Lê Thị Kiều Loan 11182973

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 CONTENTS
I. INTRODUCTION........................................................................................................1
1. Company overview..................................................................................................1
2. Toyota’s business model..........................................................................................1
a) Toyota business model’s performance...................................................................2
b) Toyota’ s business model canvas...........................................................................2
3. Introduction of Toyota’s automobile......................................................................3
II. THE OVERVIEW OF THE SUPPLY CHAIN OF TOYOTA...............................6
III. THE MOTIVATION FOR TOYOTA TO ESTABLISH A GLOBAL SUPPLY
CHAIN................................................................................................................................... 8
1. Globalization............................................................................................................8
2. Cost-Awareness........................................................................................................9
IV. THE FACTORS/DRIVERS AFFECTING THE DECISIONS OF TOYOTA IN
IMPLEMENTING THE FUNCTIONS OF SUPPLY CHAIN MANAGEMENT...........9
1. Market globalization drivers..................................................................................9
a) Lifestyle.................................................................................................................9
b) Social media........................................................................................................10
c) Global Firm.........................................................................................................10
d) Global advertising...............................................................................................11
e) Sustainability at Customer Levels........................................................................11
2. Cost globalization drivers......................................................................................12
a) Economies of scale..............................................................................................12
b) Accelerating Innovation......................................................................................12
c) Timing.................................................................................................................13
d) Engaging Locally................................................................................................14
e) Advances in Logistics..........................................................................................15
3. Government globalization drivers........................................................................15
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 a) Tariff Barriers......................................................................................................15
b) Sustainability at Government Levels...................................................................15
c) Emerging markets................................................................................................16
4. Competitive globalization drivers.........................................................................16
a) Competitors.........................................................................................................16
b) Competitive Battleground....................................................................................17
V. ANALYSE THE GLOBAL SUPPLY CHAIN MANAGEMENT ACTIVITIES
OF ENTERPRISES............................................................................................................18
1. Purchasing..............................................................................................................18
2. Operations..............................................................................................................19
a) Mix Planning.......................................................................................................19
b) Sales and Operations planning.............................................................................20
c) Production scheduling and Operations.................................................................21
d) Dealer allocation..................................................................................................21
e) Parts Ordering......................................................................................................21
f) Inbound Logistics Planning..................................................................................22
3. Logistics.................................................................................................................. 22
a) Inbound Logistics................................................................................................22
b) Outbound Logistics.............................................................................................25
4. Market channels.....................................................................................................25
5. Suppliers.................................................................................................................26
6. Customers...............................................................................................................27
VI. CONCLUSION AND RECOMMENDATIONS...................................................28
REFERENCES..............................................................................................................31

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 I.  INTRODUCTION
1. Company overview

In 1933, Toyota was founded by Kiichiro Toyoda. Toyota is headquartered in Toyota

City, Aichi and in Tokyo. In 1934 the department of Toyota industries manufactured the first
product, the product called Type A engine and its first passenger car AA in 1936. Toyota
bought some other companies, has owned and operated Lexus, Scion, Daihatsu and Hino
Motors and shareholdings in Fuji heavy industry, Isuzu, Yamaha, and Mitsubishi Aircraft
Corporation. All these and some others in total include around 522 subsidiaries.
Toyota is a worldwide famous and well-known company because of their high-quality
manufactured cars, Toyota is doing very well and growing very fast globally. They have
their operations, manufacturing facilities, and valuable loyal customers all over the world.
The new Hybrid technology in Toyota cars gave a new pride to Toyota and the sales of
Toyota went up day by day. In the last few years, Toyota became number one in the
automotive industry and became number one in mostly selling their cars worldwide. 
Toyota has factories in most parts of the world, manufacturing or assembling vehicles for
local markets. Toyota has manufacturing or assembly plants in Japan, Australia, India, Sri
Lanka, Canada, Indonesia, Poland, South Africa, Turkey, ...
Toyota Motor Corporation produces vehicles under five brands: Daihatsu, Hino, Lexus,
Ranz and the namesake Toyota.
- Toyota Global Vision:
According to Toyota’s website, their global vision is “Toyota will lead the future
mobility society, enriching lives around the world with the safest and most responsible ways
of moving people. Through our commitment to quality, ceaseless innovation, and respect for
the planet, we strive to exceed expectations and be rewarded with a smile.  We will meet
challenging goals by engaging the talent and passion of people who believe there is always a
better way.”
- Mission: Producing happiness for all
- Vision: Creating mobility for all
2. Toyota’s business model

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 Toyota is one of the leading automakers in the world, and its strong brand recognition
has assured a significant share of the worldwide market. Such a global position has made it a
sustainable long-term business model. Let’s take a look at the Toyota Business Model.
a) Toyota business model’s performance

- Quality
Toyota invests in development, design, production, and after-sales in order to maintain
top quality. That has put the brand among the top automotive ones in terms of reliability,
quality and durability.
- Speed and dependability
Toyota has managed to reorganize its production flow, by focusing on simplicity, thus
increasing the speed of delivery. Now, the company has a just-in-time production system,
with a controlled cost structure.
- Suppliers
Toyota aims on building a strong foundation at all stages of the supply chain, from
development to after-sales. In order to reach that goal, the company has built close and
trustworthy relationships with its suppliers, by minimizing the number of suppliers, thus
creating a long-term partnership and, this way, achieving cooperation, cost reduction, and
quick response to fluctuations and innovations.
- Wide range and cost
Toyota’s business model is not based on just one car, instead, it provides a wide range of
products to the customers, since the company produces different models to different markets,
in a well-established flexible production system.
Besides, Toyota has managed to manufacture high-quality vehicles at reasonable prices.
The company has tested and implemented several initiatives to reduce its operating costs and
focused on local production capacities to meet the customers’ demands.
b) Toyota’ s business model canvas

- Customer segments: general worldwide public and freight companies.

- Value proposition: reliable and high-quality cars at a reasonable price.
- Channels: dealers, resellers, service centers, branches, showrooms, website, social
media, etc.

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 - Customer relationships: reputation, quality, footprint, delivery time, personal
assistance, after-sales.
- Revenue streams: sales of products (automobiles, commercial vehicles, and engines),
sales of spare parts, services of banking, financing, and leasing, commissions, and
sales from non-automotive business. Key partners: manufacturers of parts and
components, suppliers, dealers, distributors, etc.
- Key activities: manufacturing, engineering, design, assembling, supply chain, R&D,
and logistics.
- Key resources: human resources, intellectual property, partners, facilities, brand, and
inventory.
- Cost structure: lean-oriented, with low-cost operational expenses, which include
manufacturing facilities and operations, raw materials and components, distribution
and logistics, staff compensation, investments in technology and R&D, maintenance,
marketing, and advertising, etc.

3. Introduction of Toyota’s automobile

As of 2009, Toyota officially lists approximately 70 different models sold under its
namesake brand, including sedans, coupes, vans, trucks, hybrids, and crossovers. Many of
these models are produced as passenger sedans, which range from the subcompact Toyota
Yaris, compact Corolla, to mid-size Camry and full-size Avalon. Vans include the Innova,

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Alphard/Vellfire, Sienna, and others. Several small cars, such as the xB and tC, were sold
under the Scion brand.
SUVs and crossovers
 

Toyota C-HR

Toyota RAV4
Toyota's SUV and crossover line-up grew quickly in the late 2010s to 2020s due to the
market shift to SUVs. Toyota crossovers range from the subcompact Yaris Cross and CH-R,
compact Corolla Cross and RAV4, to midsize Harrier/Venza and Kluger/Highlander. Other
crossovers include the Raize, Urban Cruiser. Toyota SUVs range from the midsize Fortuner
to full-size Land Cruiser. Other SUVs include the Rush, Prado, FJ Cruiser, 4Runner, and
Sequoia.
Pickup trucks

Toyota Hilux (global)

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 Toyota Tacoma (US/Canada)
Toyota first entered the pickup truck market in 1947 with the SB that was only sold in
Japan and limited Asian markets. It was followed in 1954 by the RK (renamed in 1959 as the
Stout) and in 1968 by the compact Hilux. With continued refinement, the Hilux (simply
known as the Pickup in some markets) became famous for being extremely durable and
reliable. Extended cab and crew cab versions were eventually added, and Toyota continues
to produce them today under various names depending on the market in various cab lengths,
with gasoline or diesel engines, and 2WD and 4WD versions.
In the United States, the Hilux became a major model for the company, leading the
company to launch Tacoma in 1995. The Tacoma was based on the Hilux, but with a design
intended to better suit the needs of US consumers who often use pickup trucks as personal
vehicles. The design was a success and Tacoma became the best-selling compact pickup in
America.
After the success of its compact Hilux pickups in the US, Toyota decided to enter the
full-size pickup market, which was traditionally dominated by domestic automakers. The
company introduced the T100 for the 1993 US model year. The T100 had a full-size 8-foot
(2.4 m) long bed, but suspension and engine characteristics were similar to that of a compact
pickup. Sales were disappointing and the T100 was criticized for having a small V6 engine
(especially compared to the V8 engines common in American full-size trucks), lacking an
extended-cab version, being too small, and too expensive (because of the 25% tariff on
imported trucks). In 1995, Toyota added the more powerful V6 engine from the new Tacoma
to the T100 and also added an extended cab version. In 1999, Toyota replaced the T100 with
the larger Tundra, which would be built in the US with a V8 engine and styling that more
closely matched other American full-size trucks.
Luxury vehicles

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 Toyota Crown RS (Fifteenth generation, S220; 2018)
In the Japanese home market, Toyota has two flagship models: the Crown premium
sedan and the Century limousine.
In the 1980s, Toyota wanted to expand its luxury car offerings but realized that existing
Japanese-market flagship models had little global appeal and could not compete with
established brands such as Mercedes-Benz, BMW and Jaguar or the Acura and Infiniti
marquees being launched by Japanese competitors.
Before the decade was out, Toyota introduced Lexus, a new division that was formed to
market and service luxury vehicles in markets outside of Japan. The company developed the
brand and its vehicles in secret in August 1983, at a cost of over US$1 billion. The Lexus LS
flagship full-size sedan debuted in 1989 to strong sales and was largely responsible for the
successful launch of the Lexus marque. Subsequently, the division added sedan, coupé,
convertible and SUV models.
The Lexus brand was introduced to the Japanese market in 2005, previously all vehicles
marketed internationally as Lexus from 1989 to 2005 were released in Japan under the
Toyota marque.
Buses
The Toyota Coaster is a minibus introduced in 1969 that seats 17 passengers. The
Coaster is widely used in Japan, Singapore, Hong Kong, and Australia, but also in the
developing world for minibus operators in Africa, the Middle East, South Asia, the
Caribbean, and South America to operate as public transportation.

II. THE OVERVIEW OF THE SUPPLY CHAIN OF TOYOTA

Toyota is one of the largest vehicle brands with a global footprint. Known for its
innovative methods of production, Toyota has acquired a leadership position in the
automotive industry. Every vehicle that it makes requires assembling thousands of parts
sourced from suppliers all around the world. The brand has built close and strong

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relationships with its suppliers since its foundation. Toyota’s supply chain practices have
been lauded widely as among the best in the industry. 
Supply-chain management at Toyota is an element of the company’s operations strategy
which is thoroughly based on the Toyota Production System (TPS) which was developed in
the 1940s. Toyota’s vehicle production system is the way of “making things” that is
sometimes referred to as a “lean manufacturing system” or a “Just-In-Time (JIT) system”.
This production control system has been established to make the vehicles ordered by
customers in the quickest and most efficient way, in order to deliver the vehicles as quickly
as possible”.
- Lean manufacturing aims to achieve the elimination of all waste, superior customer
care, and Lean is based on a pull system where the elimination of waste is seen as a primary
objective. Toyota’s seven major types of non-value-adding waste in business and
manufacturing business are overproduction, waiting, unnecessary transport or conveyance,
over-processing or incorrect processing, excess inventory, unnecessary movement, defects,
and unused employee creativity. 
- JIT system means making only “what is needed, when it is needed, and in the amount
needed”. Just in time inventory management allows a company to gain a competitive edge
by not having to have a large amount of inventory in their warehouses, but only to order
parts when they are actually needed. According to just in time philosophy new material will
be produced only when the old stock of that material has finished.

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 The Toyota Production System was established based on two concepts: The first is called
“Jidoka” (Which can be loosely translated as “automation with a human touch”) which
means that when a problem occurs, the equipment stops immediately, preventing defective
products from being produced. The second concept is “Just-In-Time”, in which each process
produces only what is needed by the next process in a continuous flow

To make its supply chain management effective, Toyota has established a very high level
of synchronization and coordination. Coordination across several functions has enabled
better management of the supply chain network. From planning and development to
production and engineering as well as purchasing and production, the brand has established
firm coordination across all these functions to manage its supply chain and production better.
To achieve higher efficiency across its manufacturing plants, the brand has made its logistics
simpler and holds minimal inventory. It has also kept its production system simple, slim, and
flexible. An environment-friendly system of production minimizes the impact production
can have on people. Overall, Toyota has carefully aligned its supply chain with
manufacturing to achieve higher efficiency, agility as well greater quality.

III. THE MOTIVATION FOR TOYOTA TO ESTABLISH A GLOBAL

SUPPLY CHAIN
1. Globalization

The external forces (such as political, technological, economic, socio-cultural,

environmental and legal), local competition, continuous policy and regulations changes,
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pressure from international brands and the rest, all affect the market demand of the
consumers. As a result of this, companies are facing huge challenges to meet the
requirements globally of products but due to globalization forces companies tend to change
policy and strategy. Though the product barriers are eliminated, no products are now
considered domestic products but due to globalization forces companies tend to change
policy and strategy regularly. Besides, with the benefits of globalization now, foreign
investors are encouraged to invest in several countries which force local companies to
improve the quality of existing products which creates huge challenges in procurement,
manufacturing, transportation and distribution activities for the companies.
4. Cost-Awareness

There are four major decision areas in cost awareness:

- Location: Convenient and feasible location with the necessary resources is the primary
step towards creating a strategic network. However, due to geographical distance and
cost, companies often aren't able to cope with customer expectations.
- Production: Cost fluctuations from production levels are critical issues for strategic
decisions, such as what product to produce, which plant to allocate and what supplies
to get for production.
- Inventory: Inventory cost varies at different levels starting from raw materials to
finished goods. Maintaining the inventory can be expensive, especially during the
period of price inflation.
- Transportation: The cost associated with transportation is also an issue that gives
companies headaches. The channel of distribution could be by air. ship, and road. Air
shipment is fast and reliable but expensive, while sea shipment is cheap but time-
consuming. If there is a suitable transportation network, delivery of the product to the
market will not be at risk.

IV. THE FACTORS/DRIVERS AFFECTING THE DECISIONS OF TOYOTA

IN IMPLEMENTING THE FUNCTIONS OF SUPPLY CHAIN
MANAGEMENT
1. Market globalization drivers

The market globalization drivers influence global supply chains in various ways. Each
industry has certain market forces that facilitate globalization and certain market forces that
hinder globalization. Changing customer needs and tastes, infrastructure available for

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engaging customers, availability of global channels, the applicability of transferable
marketing, and the use of more diverse nations as so-called lead countries are determining
the relative influence of marker drivers on global supply chain management.
a) Lifestyle

Does your lifestyle define your car, or does your car define your lifestyle? It can go
either way. There’s a reason what we drive has always been a symbol of who we are and
what we value. Sometimes people even make a point to meet someone where they can see
what they drive in order to judge them—a car can tell you a lot about a person, including
what they can afford. Customers around the world usually search for a car that can reflect
their lifestyle. Understand that
Toyota has always produced a variety of different car lines to provide products suitable
for each style that customers want, satisfying customers as Toyota's mission is: Producing
happiness for all. One of the company’s strengths is the diverse product list with a wide
range of segments for customers to choose from based on their lifestyles and preferences.
For instance: 
- Toyota Camry was first launched in January 1998 and is considered a "symbol" model
for success. Camry comes from the Japanese word "kanmuri" which means "crown". Those
who come out of the Toyota Camry bring themselves a poise, experience and personality
- Yaris is a blend of meanings from stories in Greek and German mythology, a symbol of
beauty and luxury. Small, beautiful, elegant, fuel-efficient and especially safe, Toyota Yaris
is always the first choice of female customers or small families.
c) Social media

Due to the emergence of global and regional media, an increase in international retail
options and the movement of people, products and corporations across national and market
borders, gender is becoming much more integrated. To promote their product lines, Toyota
has reached their customers effectively through social media. 
- They produce short-branded videos, Toyota filmed 15-second Instagram videos and
pushed them through paid Facebook ads. 
- They perform social media monitoring. Toyota has leveraged this marketing research
approach to analyze conversations on Facebook and Twitter that contain targeted keywords
such as “Lexus,” “decide,” “buy,”. 

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 - And Toyota also uses Pinterest to improve brand appeal. Toyota invests heavily in its
Pinterest account to improve its brand appeal. To portray itself as a fun and exciting brand,
Toyota often posts photos of their shiny vehicles at motor shows or stylish pictures of
Toyota race drivers at race tracks.
d) Global Firm

Issues such as global sourcing, including sourcing from foreign markets for foreign
markets, are becoming much more important. However, this is not global sourcing solely
based on cheaper costs, as it frequently was in the past. Firms now source globally to
achieve the best combination of quality, cost, and ultimately value. In this spirit, we also see
increased tendencies among global firms to stress “glocalization”—meaning that they carry
on business around the world based on both local and global considerations. For Toyota,
“think global, act local” means tailoring products intended for global distribution to the
tastes of local consumers. For example, Toyota launched Toyota Etios especially for the
Indian market to address Indian customers’ concerns about road conditions & price.
e) Global advertising

Global advertising is a way to build valued connections with customers. A common

platform and parallel campaigns that resonate with customers worldwide have spillover
effects in terms of publicity, lifestyles, and tastes. We often act and behave the way our
peers and neighbors do and purchase what they purchase. Global advertising is a mechanism
that allows global companies to build the world marketplace into a neighborhood. At the
same time, the more global an advertising campaign is, the greater the expectations on the
outbound portion of the supply chain to meet customers’ demands. The key for the future,
though, is that more advertising campaigns will be global in scope and because of the idea
that cost efficiencies can be gained by global advertising
In 2018, Toyota Brand’s First-Ever Global Marketing Campaign, entitled “Start Your
Impossible,” worldwide marketing campaign spotlights the Toyota brand’s shift to a
mobility company as well as the automaker’s eight-year global partnership with The
International Olympic and Paralympic Committees. “Start Your Impossible’ is a global
corporate initiative that aims to inspire Toyota employees, partners, and customers, and
connect them with the company’s core beliefs”, said Noriaki Yamashita, general manager of
Sales & Marketing Support Division, Toyota Motor Corporation.
f) Sustainability at Customer Levels

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 An increasing number of customers are demanding that firms throughout the global
supply chain engage in efforts to sustain the environment and offer “greener” products. In
the past, consumers mostly held producers and/or retailers accountable for making sure that
their products were “green.” However, as consumers are becoming more knowledgeable,
they are also becoming more engaged. This means that all entities and elements of global
supply chains will be under increased pressure to offer green solutions at each stage of the
process. This includes all steps in the forward portion of the supply chain as well as all steps
in the reverse logistics portion of the chain. Customers and market forces are increasingly
demanding
Being aware of this, Toyota has always done its best to provide a green solution:
“Sustainability is at the center of everything we do. We focus on creating ever-better cars
that let people live cleaner, safer, less stressful and more connected lives. We strive to
develop future mobility solutions that connect people, vehicles and the city in order to
substantially reduce congestion and pollution. We want to operate a business that is
profitable, sustainable and a great place to work.” Sustainability is fundamental to how
Toyota does its business as expressed in the 2011 Global Vision. In 2015, they announced
the Toyota Environmental Challenge 2050 to move toward a society where people, cars, and
nature can coexist in harmony. The six challenges are set to go beyond zero environmental
impact, hoping to even achieve a net positive impact. Toyota commits to new and bold steps
in the coming decades to go beyond zero environmental impact towards delivering positive
environmental benefits in areas such as life cycle emissions, emissions from their
manufacturing plants, water usage and many more.
5. Cost globalization drivers

a) Economies of scale

Economies of scale are the cost advantage that arises when increasing the output of a
product. When one increases the production, the cost naturally decreases accordingly. So it
would be more effective for the company to make use of the infrastructure and produce as
many products as they can. 
The Toyota Production System is the first example of modern Lean. (One of the earliest
uses of the term “Lean” comes in The Machine That Changed the World.). Toyota, one of
the most renowned Lean companies. They have massive infrastructures in their facilities.
The unit costs drop substantially as they roll more cars off of their assembly lines. The
company builds its factories in many countries in each part of the world. For example, in
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Asia, we have Indonesia, Japan, the Philippines, and Thailand. In Europe, Toyota places its
factories in France, Belgium, Czech Republic, Poland, Russian Federation, Turkey, and the
United Kingdom. there’re also Toyota manufacturing plants in North America, South
America, South Africa. Moreover, Toyota applies to Joint venture, licensed, and contract
factories as well, such as in France, China, India, Malaysia, Pakistan, Taiwan, United States,
Vietnam,
g) Accelerating Innovation

Nowadays, accelerating innovation has become one of the strategies to differentiate from
the competitors, especially in large corporations. The more technology develops, the more
value is created, with less resources. If the company knows how to take advantage of this, it
can leverage comparative advantages to compete with competitors.
Toyota designers are always finding ways to make things better. Better means more
performance, more safety, more fuel efficiency, more sustainability... more value, and more
reasons for customers to say, "Toyota offers me an innovative, advanced technology driving
experience that's easy to integrate into my life". Here, you'll find examples of the world-
leading advancements and technology that help make Toyota leaders in innovation.
The automaker is dedicated to paving the road for the “future of mobility." This mission
acts as a compass, influencing key strategic decisions in branding, product innovation,
partnerships and more. To drive innovation with the aim of advancing mobility, Toyota is
partnering with SoftBank. SoftBank, with a specialty in artificial intelligence, and Toyota,
with a long history of transportation solutions, will release a joint venture called Monet
Technologies Corp. The partnership will focus on delivery services, portable medical
treatment, on-demand vehicles and data assessment. Toyota has been driving innovation for
years, rolling out Hybrid Synergy Drives technology and the Prius, which set the standard
for hybrid cars and has continued to innovate ever since. Toyota today announced some of
its progress in the development of automated driving technology and other project work at
the Toyota Research Institute (TRI). TRI has made strong advances in deep learning
computer perception models that allow the automated vehicle system to more accurately
understand the vehicle surroundings, detecting objects and roadways, and better predict a
safe driving route, prediction capabilities can also provide data about road elements, such as
road signs and lane markings, to support the development of maps, which are a key
component of automated driving functionality. The platform includes the ability of the

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Guardian system to detect distracted or drowsy driving in certain situations and to take
action if the driver does not react to turns in the road.
h) Timing 

The old adage that “time is money” has been around in business circles for years. Now
we often talk about speed, cycle time, time for delivery, and timing. What all these things
really mean is straightforward: customers want products when they want them, not
necessarily when companies want to sell them to the customers.
Use of JIT (“Just-In-Time (JIT) system”) within the Toyota Production System means
that individual cars can be built to order and that every component has to fit perfectly first
time because there are no alternatives available. “making the vehicles ordered by customers
in the quickest and most efficient way, in order to deliver the vehicles as quickly as
possible”. As they start to receive the number of vehicles according to the customer's
demand, Toyota begins to produce an estimated number in the fastest and most accurate
way, to bring the product to the consumer in time.
i) Engaging Locally

A lack of understanding and knowledge of the global markets is a huge potential cost
driver. Global supply chains are considered to be at the market level because they engage
companies in different parts of the world and draw on the experience and expertise of those
firms. Global supply chains are not global just because they source from different parts of
the world. Value in the chain is a function of integrating firms and individuals with local
knowledge into the supply chain. Integrating firms and individuals with local knowledge
into the supply chain is an important factor. If the company does not pay attention to this
factor, it can affect efficiency and increase costs in the chain. To understand the local
market, the company has to have thorough research on that market such as competitors,
customer behaviors, preferences and so on.
Toyota Motor Vietnam (TMV) is an automobile Joint Venture founded in September
1995. The total initial investment capital was 89.6 million USD, from Toyota Motor
Corporation (70%), Vietnam Engine & Agriculture Machinery Corporation - VEAM (20%)
and KUO Singapore Pte.Ltd (10%). This cooperation helps Toyota to gain more information
and knowledge about the Vietnamese market through its partners. TMV was one of the first
auto joint ventures in Vietnam, TMV always makes efforts to maintain sustainable
development and be “Moving Forward '' together with Vietnam. TMV has increasingly

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provided high-quality products and perfect customer services to bring the highest
satisfaction to their customers as well as practically to contribute to the development of the
Vietnam automobile industry. Together with company development, TMV always
contributes to Vietnam society in various areas through actual & sustainable activities.
Thanks to the opening of the Stamping (since 2004) & Chasis workshops (since 2008), as
well as ongoing efforts seeking more and more domestic suppliers, TMV is the automobile
maker having the highest localization rate (depending on model) in Vietnam. In addition,
TMV is continuing to do research to produce more kinds of parts. Up to now, the total
number of localized parts of TMV for all vehicles is up to 253 details, which are provided by
18 domestic suppliers. Besides, TMV has established a localization center at the plant, with
a view to looking for more local suppliers in increasing the localization rate for their
products and contributing partly to the Vietnam automobile industry.  
j) Advances in Logistics

Toyota Industries Corporation’s strategy is to become the number one logistics solutions
provider in the world. As part of that strategy, Toyota Industries Corporation (TICO)
recognized that changing dynamics in the global material handling markets relating to e-
commerce, labor cost and productivity requirements, have created a permanent demand for
new forms of logistics solutions. To align with market changes and customer needs, TICO
created the Toyota Advanced Logistics Group to complement their Toyota Material
Handling Group with advanced logistics services.
Specifically in North America, TICO created Toyota Advanced Logistics North America
(TALNA) to manage activities in the area of advanced automated material handling systems
integration and supply chain management solutions. TALNA commenced operations in 2017
and acquired Bastian Solutions as the first group company in the TALNA operative
structure. All of TICO’s North American solutions providers interface with one another to
ensure every option is considered in developing and delivering the most appropriate solution
to our clients.
6. Government globalization drivers

a) Tariff Barriers 

Tariffs have declined steadily since the 1940s. With supply chain decomposition, firms
can identify where the greatest value is and then identify policy priorities that fit their global
supply chain.

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 For example, From July 10, the import tax on auto assembly components has been
officially reduced to 0%, in Vietnam.
In particular, the price of imported cars from ASEAN countries such as Thailand and
Indonesia is increasingly cheaper when the import tax from ASEAN countries is reduced
from 30% to 0%. Ms. Nguyen Thi Hien, Director of the Hien Toyota dealer system in Ho
Chi Minh City, said that the number of cars imported into Vietnam in the first half of 2019
increased by 6-7 times compared to 2018.
k) Sustainability at Government Levels

Earlier, we described scenarios in which customers demand sustainability and “greening”

of the products that they buy. The higher levels of governments are doing the same thing.
Supply chain sustainability is aiming to create and protect long-term environmental, social
and economic value when bringing products and services to market. Many countries have
made environmental protection policies for foreign companies.
To be truly sustainable, a company must adopt sustainable practices in all of its activities.
This is Toyota’s strategic ambition to grow their business in ways that provide benefits to
society and to protect the natural environment. Toyota seeks to extend its vision of
sustainable development to all of their manufacturing operations:
- Use renewable energy, such as solar and wind power. 
- Implement innovative technologies to reduce waste and achieve groundbreaking
environmental performance.
- Enhance the natural environment and preserve ecosystems through tree planting and
other conservation activities.
l) Emerging markets

Emerging markets represent a large share of the growth in product categories. For
example, BRIC countries, nine emerging markets - Brazil, China, India, Indonesia, Mexico,
Russia, South Africa, Turkey, and Vietnam - are expected to contribute about 50 percent of
global GDP growth in the coming decade. These are fantastically high numbers that create a
real sense of urgency among many multinational corporations. In fact, many companies
realize that they are likely to fall behind in the years to come simply by not being strategic
and planning effectively for the integration of these emerging markets into their value
chains. Many supply chain analysts also recognize that the growing global middle class in
these emerging markets could significantly affect supply chains in the future.
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 Capturing this opportunity, Toyota has operated in Indonesia, Russian Federation,
Turkey, Brazil, South Africa and they also produce cars in China, India, Vietnam under the
joint venture, licensed, and contract factories
7. Competitive globalization drivers

a) Competitors

When you buy a car, as an added peace of mind, you get certain safety features as
standard. These are the features that adhere to all standards across the world. However, as
automakers get more competitive, one of the things they’ve begun working towards is
innovating and creating new safety features. There’re a lot of brands that are top of mind for
you such as Toyota, Nissan, Honda, Audi, Mazda, ...
Japanese automakers Toyota and Nissan are at the front of the heap, outdoing rivals by
offering a suite of advanced safety features at unusually affordable prices.  Soon, they will
be introducing the technologies in a push to polish their vehicles’ safety credentials as
automakers seek to differentiate themselves from rivals.
However, it seems that Toyota has the biggest dog in this bout. Toyota, having
consistently re-invented its image many times, seems to be focusing on “safety first.” Toyota
has announced that they will begin offering automatic braking, lane departure alert
technology, and other safety components later this year in a package priced at about $300 in
its compact cars. A slightly more advanced version will be priced at about $500 for midsize
and larger models.
One of the features in Toyota’s small cars, an optional collision avoidance system that
uses a camera and laser radar to detect objects ahead of the vehicle and prompts the driver to
brake if a crash is likely, and boosts braking power if the driver reacts. If the driver fails to
respond, the system brakes automatically to prevent or mitigate any collision. The small-car
system also includes lane-departure technology and a system that automatically switches
between high and low beam headlights. The small car package is called Toyota Safety Sense
C (TSSC).
In their larger cars, the Toyota Safety Sense P (TSSP) package includes the same features
but uses more advanced technology combining a camera and millimeter-wave radar, and is
able to identify pedestrians in the roadway. The large-car package also includes dynamic
cruise control, which is capable of slowing the vehicle automatically to maintain a safe
following distance on highways and avoid collisions with merging vehicles. The Lexus
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safety options are slightly more refined and can, for example, warn drivers of dangers
through steering-wheel vibrations in addition to audio and visual signals.
m) Competitive Battleground

The so-called triad markets—North America, Western Europe, and Japan—plus the
newly industrialized countries in Southeast Asia are still the key battleground markets in the
world. Even so, more of the competitive battlegrounds will involve emerging markets such
as Brazil, China, India, Indonesia, Mexico, Russia, South Africa, Turkey, and Vietnam.
These countries are expected to contribute more than 50 percent of global GDP growth in
the coming decade. The purchasing power of the middle class worldwide is estimated to
double in the next two decades, with Asia accounting for about 80 percent. This will
establish parts of Asia, including Southeast Asia, as fruitful and important battlegrounds for
global firms.
Realizing the potential of key battleground markets and competitive battlegrounds in
emerging markets in the world, Toyota was not out of the race. Toyota built a lot of large
factories in emerging markets, with a huge number of employees (up to several hundred
thousand workers). This is how the company takes advantage of the abundant and abundant
supply from these emerging markets and thereby accelerates its growth compared to the
competition

V. ANALYSE THE GLOBAL SUPPLY CHAIN MANAGEMENT

ACTIVITIES OF ENTERPRISES
1. Purchasing

Purchasing forms an important part of the supply chain. It has a direct influence on the
production costs. Thus, it is important to maintain a procurement strategy that is both
dynamic and flexible to reflect frequent changes in the market. Toyota maintains an effective
procurement strategy complete with reliable suppliers. 
TOYOTA PURCHASING WAY:
1. Fair business based on an open-door policy
2. Mutual benefit based on mutual trust
3. Contributing to local economy and society through localization

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 The Purchasing Staff Handbook issued at the time of Toyota's foundation sets out an
approach of always keeping the door open to better quality goods and better suppliers, an
approach that has lived on through Toyota's basic principle for fair competition based on an
open door policy. Toyota believes that realizing its policy of 'mutual benefit based on mutual
trust' means that suppliers must run their operations reliably and requires a united approach
of supporting each other through good and bad times and overcoming difficulties together.
Toyota is a global brand and to cater to local demand worldwide the brand has to procure
locally from local suppliers for local production. It is actively promoting local production so
that local demand can be met and for that, it procures parts, materials, tools, equipment, and
other materials from local suppliers. 
8. Operations

Operational Processes (take place in the following order: mix planning => Sales and
Operations planning => Product scheduling and Operations => Deal allocation => Parts
Ordering => Inbound logistics planning)

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 a) Mix Planning

The goal of mix planning is to carefully manage dealer-level product demand so as to

enable stable production at the manufacturing plant. 
Mix planning is initially performed on an annual basis prior to the new model launch and
can be adjusted monthly to reflect changes in demand and/or seasonal trends. 
Example:
- For the United States market, the mix planning is done at the regional level to ensure
that the vehicles ordered for stock closely meet the needs of the geographic area. For
example, sport utility vehicles (SUVs) ordered for dealers located in the northern
states would almost always be equipped with four-wheel drive, whereas SUVs
ordered for southern states would be ordered with two-wheel drive. 
- In Europe, the mix planning is done country by country because many of the
countries have unique requirements. For example, the United Kingdom requires right-
hand-drive vehicles whereas the countries on the Continent require left-hand-drive.
Also, there are various regulations in different countries, significant climate
differences from Norway to Spain, and substantial economic differences between
Western and Eastern Europe.
Toyota reduces complexity in product planning, designing, and sourcing:
- Look for opportunities to use common parts across products 
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 - Consider making high-volume options standard (e.g., if air-conditioning is sold in 95
percent of all vehicles, it should be made a standard feature). Eliminate options that
do not sell well (e.g., if ashtrays are only ordered in 5 percent of vehicles, eliminate
them as an option). This approach focuses on simplifying designs even at the cost of
losing some customers in order to make demand more predictable.
- Minimize parts that vary by option and color
- Attempt to source optional parts to local suppliers to shorten lead time. 
- Design accessories that can be installed after the vehicle leaves the factory at a hub or
at a dealer to minimize the impact on the factory and supply chain. 
n) Sales and Operations planning

Sales and operations planning processes at Toyota are performed in two stages: annual
planning and monthly ordering. The objective of the annual planning process is to establish a
rolling three-year sales and production forecast. The process is repeated semiannually so that
the forecast is updated based on the latest market and economic conditions. At Toyota, there
is a monthly global process to receive the sales orders from each sales company from around
the world. That is translated into a production plan for each assembly plant as well as for
each Toyota unit plant.
One of the functions of the sales division is to provide a monthly production order and
forecast. That is in the form of a rolling three-month plan with the first production month
categorized as a firm order and the next two months as a forecast.
Once the forecast is made and the order is completed by each regional office, it is sent to
the sale’s divisional headquarters. There it is checked before it is forwarded to the
production divisional headquarters to create a production schedule
o) Production scheduling and Operations

Production scheduling is the process of taking the monthly order and forecast from sales
and assigning a production date and sequence to each vehicle. After the production plan is
complete, it is sent back to sales with a scheduled build date for each vehicle. A copy is also
sent to the parts ordering group at each assembly plant.
p) Dealer allocation

Prior to the allocation process, dealers can update their profile with specific guidelines on
the type of vehicles they either want—or do not want—to be allocated. This dealer profile is

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important because each region covers a large geographic area of several states that may have
different climates and demographics.
The allocation process is executed by each region for its dealers. The allocation quantity
for each vehicle model is based on a “fair-share method”. The benefit of this method is that
it ensures that the inventory is rebalanced across all dealers.
After the vehicles are allocated, they are assigned to the dealer and will be visible to the
dealer as pipeline orders. 
q) Parts Ordering

There are many parts ordering processes for the different categories of parts. The four
broad part categories are local parts, long lead time parts, in-house parts, and sequenced
parts:
1. Local parts are parts supplied by suppliers located within the same global region as the
assembly plants. For example, parts supplied by North American suppliers to assembly
plants located in North America would be considered local.
2. Parts supplied by Japanese suppliers to North American and European assembly plants
would be considered long lead time parts.
3. In-house parts, such as body panels, plastic bumpers, and engines, are produced at the
same site as the assembly plant.
4. Sequenced parts are produced at suppliers located near the assembly plant. Those parts
are shipped to the assembly plant in the exact sequence of the vehicles being produced. A
typical sequenced part for assembly is seats

The parts ordering process is actually two different processes: one for local parts and
another for overseas parts. The order is transmitted to the suppliers daily. In addition to the
daily order, a weekly forecast is sent to the supplier as a notice for the next 12 weeks.
r) Inbound Logistics Planning

Once the parts forecast is completed for the next production month, a determination
needs to be made about the most efficient routes for the logistics partner to pick up the parts
from all suppliers. Assurances need to be made that all delivery times for parts will be met
and the cost of operating the fleet of trucks optimized. 

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 9. Logistics

At Toyota, the overriding objective regarding logistics management involves minimizing

resources and time utilized. Toyota’s logistics are grouped into two major categories,
namely: (1) inbound logistics, which is responsible for transporting parts and materials from
the tier 1 suppliers to the OEM (original equipment manufacturer) plants; (2) outbound
logistics, which is responsible for the distribution of vehicles from the assembly plants to the
dealers. 
a) Inbound Logistics

Inbound logistics encompasses two different operations: local inbound logistics and
overseas inbound logistics. 
- Local Inbound Logistics
Toyota’s success in operating a lean supply chain requires that the parts be transported
from the suppliers in an efficient and timely matter; therefore, Toyota establishes a
partnership with a limited number of third-party logistics providers (3PLs) to deliver
logistics services. Most of Toyota’s 3LPs are located across Japan, North America, and
Europe. The location of the 3PLs is important since it determines the size of transport costs
involved in moving these parts from the supplier plants to Toyota’s factories.
Toyota’s inbound logistics operation can best be described as a logistics network. The
company organizes many of its suppliers into clusters based on geographic location. Parts
are picked up from those suppliers by trucks on a “milk route” (A milk route is a circuit
followed by Toyota’s trucks when picking up vehicle components from the suppliers within
a geographic location), and then they are delivered to a regional cross-dock. (Suppliers that
are located close to the plants, however, ship parts directly.) At the cross-dock, the parts
unloaded and delivered to the lineside workstations are just what is needed and just-in-time.
The network logistics model enables Toyota to operate a very efficient and effective
inbound logistics operation. The entities of the network are suppliers, cross-docks, and
Toyota plants. The entities are connected by a continuous flow of trucks that move
containers of parts inbound to the plants or move empty containers back to the suppliers.

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 Network logistics of Toyota
In the Figure above, there are two clusters of suppliers, two cross-docks, and two plants.
Parts from suppliers S1, S2, and S3 in cluster C1 are picked up by truck T1 and delivered to
cross-dock CD1. Parts from suppliers S4, S5, and S6 in cluster C2 are picked up by truck T2
and delivered to cross-dock CD2. Then, truck T3 picks up parts from CD1 and delivers them
to plant P1. Also, truck T5 picks up parts from CD1 and delivers them to plant P2. Truck T4
picks up parts from CD2 and delivers them to plant T2. Finally, truck T6 picks up parts from
CD2 and delivers them to plant P1. As you can see from this example, there are two milk run
routes picking up from suppliers and four main routes from two cross-docks to two plants.
- Route Planning: 
Route planning is a key function that ensures efficient and effective operations. It is done
once per month and is based on the next production month plan. 
The creation of a logistics route plan to transport parts from hundreds of suppliers to
multiple manufacturing plants is like the making of an airline schedule. The planner needs to
know the locations of the suppliers, cross-docks, and manufacturing plants. Then he needs to
know the number of packages or containers of parts to be picked up from each supplier each
day and to which cross-dock and plant those materials are to be delivered. In addition, he

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needs to know how the containers of parts can be arranged and stacked within a truck. It is
important to optimize the cubic space of each truck.
- Pipeline Management: 
The “parts pipeline” is defined as all parts that have been ordered from a supplier and
have not been unloaded at the receiving plant.
Toyota uses a variety of methods to track parts throughout the pipeline. The process
starts with the parts order that is sent via Electronic Data Interchange (EDI), along with the
kanban barcode label that the suppliers affix to the parts shipping container. Once the parts
are shipped, the supplier sends an EDI Advanced Shipping Notice (ASN). The truck driver
scans the kanban barcode label and identifies the truck onto which the parts are loaded. Once
the truck arrives and is unloaded at the cross-dock, the status of the parts is changed to show
arrival at the cross-dock. Again, as parts are loaded onto another truck bound for the plant,
they are scanned and associated with the truck number. As the truck enters the gate at the
plant, the status of the parts is updated to show that the parts are in the plant yard. The
trailers remain in the yard until production progress dictates that they should be unloaded at
the dock. As the parts are unloaded, each container is scanned to confirm the arrival at the
plant. Pipeline data enables Toyota to have visibility into the parts pipeline. This pipeline
database is especially important whenever there is a crisis situation such as parts shortage,
short shipment, or transportation delay. It is thus clear that visibility plays a key role in the
management of the inbound parts logistics process.
- Overseas Inbound Logistics
One of the unique aspects of the parts flow from Japanese suppliers is the use of the
vanning center. At the vanning center, parts are packed into plastic trays. These trays are
then arranged into groups to fit into a module for shipment. The modules are then loaded
into containers for shipment by a container ship to the overseas port. After the containers are
loaded and shipped, it takes about four weeks for the containers to arrive at the overseas
plant. 

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 Vanning packing process
s) Outbound Logistics

Outbound logistics is also known as product distribution because the function of

outbound logistics is to distribute the finished products from the OEM (original equipment
manufacturer) plants to the retailers. Toyota relies on common carriers, railroads, and truck
“car haulers,” to transport its vehicles from the assembly plants to the dealers. Outbound
logistics involves the distribution of finished goods across the supply chain. Unlike Toyota’s
inbound 3PLs, the company does not maintain close ties with its distributors. One reason is
that many outbound 3LPs are involved from when products leave the company up to when
they arrive at the user. As such, Toyota even contracts common couriers to transport the
finished goods to dealers who can then distribute them to the users.
10. Market channels 

 Toyota’s automotive sales distribution network is the largest in Japan. This network
consisted of 290 dealers employing approximately 40,000 sales personnel and operating
more than 5,000 sales and service outlets. Toyota owns 19 of these dealers and the
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remainder is independent. Toyota mainly relies on its dealership for the sales of its products
by pulling in customers, influencing them to purchase Toyota cars, and service cars after the
deal has been made.  In Japan, each dealer has a consolidation center where the vehicle
inventory is stored until one of the dealer retail outlets sells a vehicle. At that time an order
is sent to the consolidation center and the vehicle is shipped to the dealer retail outlet. In
Japan, most vehicle inventory is kept at the consolidation center, not at the dealerships.
Toyota works with one distributor in each country and Toyota markets cars in about 170
countries through its oversea network consisting of more than 160 importers/distributors and
numerous dealers
The organization additionally relies upon different distribution channels to give great
sales and services that will maintain its reputation. A large number of the cars sold in Japan
are purchased from salespersons who visit customers in their homes or offices. In recent
years, however, the traditional method of sales through home visits is being replaced by
showroom sales, and the percentage of automobile purchases through showrooms has been
gradually increasing. Toyota believes that this extensive sales network has been an important
factor in its success in the Japanese market. 
In Japan, Toyota uses four sales channels namely Toyota (large cars), Toyopet (medium
cars), Corolla (compact), and Netz (compact). Another sales channel, Lexus, was introduced
to the Japanese market in 2005 to increase its presence and competitiveness in the luxury car
segment in Japan. Lexus is in the luxury car segment of the brand. The distribution of these
cars is placed in areas that are inhabited by the ‘rich’ and competes with other premium car
segment players such as BMW, Audi, and Mercedes-Benz
11. Suppliers

While supply contracts are never cast in stone, maintaining strong ties with its top
suppliers is a priority for the Japan-based multinational auto manufacturer. To maintain its
relations with suppliers, Toyota hands out awards yearly to suppliers that exceed
performance targets.
Toyota has a wide range of suppliers that also include the likes of Tesla Motors, which
recently signed a $100 million agreement to supply the power train for RAV4 EVs;
Samsung Electronics, which created a Car Mode App connecting Samsung smartphones to
Toyota radios; Bridgestone Americas to supply tires for the Toyota FJ Cruiser model; and
Cypress Semiconductor to provide the touchscreen for the Toyota Avalon. 

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 In Toyota's Detroit plant, the Camry model alone has suppliers such as Magnuson
Products, IPT Performance Transmission, Goodridge Fluid Transfer Systems, MagnaFlow,
Autometer, Impact Racing, Goodyear, Nitrous Supply, and Optima Batteries. Finishing
touches before Camrys are delivered to dealers are provided by Fast Ed's Interiors and the
Polishing Shop.
In some instances, Toyota has created downstream industries that were formerly integral
parts of the company. The likes of Nippon Denso Co., which manufactures air conditioners,
and Aisin Seiki Co., which produces components and systems for automobiles, started out as
part of Toyota but later became independent corporate entities. Nippon and Aisin continue to
be principal suppliers for Toyota but also manufacture products for other car manufacturers.
Since most modern cars have built-in infotainment systems, Microchip Technology
serves as a supplier not only for Toyota but for other manufacturers as well, including
General Motors. With its efficient supply chain in place, Toyota expects to remain one of the
world's most profitable car manufacturers in the foreseeable future.
12. Customers

Automobile companies have several categories of customers that need to be considered.

The following is a list of the types of customers and a brief description of each: 
- Retail consumers. The retail segment is the largest segment of customers, and it is
also the one in which the automotive companies make the most profits. Although not
all retail customers are the same, as yet there are not clear classifications for groups of
customers.  
 The serious buyer is a person who needs a vehicle within a short time frame. This
type of buyer shops for price and value and will compromise on vehicle
specifications.  
 The serious shopper is a person who has done homework and knows exactly what
he or she wants. Because the serious shopper is very particular about the vehicle
he or she wants, this customer will shop around or perhaps wait until a vehicle can
be ordered “fresh from the factory.”
- Employees/suppliers:  
 Employees. Automotive companies allow employees, relatives, and (in some
cases) friends to purchase a limited number of vehicles per year at a substantial
discount.  

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  Suppliers. Automotive companies may offer selected employees of suppliers a
vehicle purchase program. This arrangement is similar to the employee purchase
program in that the purchaser must get prior approval before proceeding to a
dealer to purchase a vehicle. 
- Fleet:  
 Rental companies. The rental companies (Hertz, Avis, Enterprise, etc.) negotiate a
contract with each automobile company for the annual volume of each model. 
 Commercial fleet. These are private companies that provide a company car for
selected employees who require a vehicle to perform their job or for certain
executives as a perk. 
 Government entities. All levels of government—federal, state, and local—
purchase vehicles from the automotive companies. Contracts are usually
negotiated with the automotive companies to provide vehicles over a period of
time. In many cases, special orders may need to be placed for vehicles with unique
equipment such as police cars and fire trucks. 

VI. CONCLUSION AND RECOMMENDATIONS

Toyota’s supply chain practices have been lauded widely as among the best in the
industry. However, the covid 19 pandemic has had a strong impact on Toyota's global
supply chain management. 
In the early months of the chip shortage that began late last year, Toyota faced limited
damage due to its supply chain savvy. The company has an intricate system in place to
monitor its vast network of suppliers and an early warning system for shortages. Toyota's
policy of keeping higher inventory levels of key parts, including chips, than rivals is paying
off, as it has experienced less disruption to production amid the global chip shortage that is
likely to continue at least through 2021. This could enable Toyota to gain market share at the
expense of rivals that are more exposed to the shortage and potential output disruption.
Toyota's superior supply-chain management remains a crucial component in the process
of ramping up production as it leads the sector's recovery. But Toyota Motor Corp.’s efforts
to stockpile enough chips and other key components to ride out supply disruptions only
protected the company for a short time before it too succumbed to the shortages eviscerating
automakers.
Toyota will slash global output by 40 percent in September 2021 as it finally feels the
bite of the pandemic and the global shortage of automotive microchips.
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 - In Europe, the carmaker stopped assembly at some plants such as in the Czech
Republic. In total, the production loss will be equal to around 40,000 units across
those assembly locations.
- In the US, meanwhile, Toyota Motor North America (TMNA) said it was looking at
an approximate loss in production of between 40%-60% because of disruption caused
by Covid-19 and other “unexpected events” affecting the supply chain. It is projecting
a reduction of approximately 60,000 to 90,000 units in August. 
- In Japan, the manufacturer will suspend output at 14 plants across Japan for various
lengths of time because of supply disruptions. The impact of these cuts will be
harshest in September, with Toyota slashing its production plan by 40%. It’s the latest
sign even the best supply chain planning is proving no match for a pandemic that
virtually ground the auto industry to a halt a year ago and has since plagued efforts to
restore production. 
Toyota said 27 production lines in Japan will be impacted, affecting models including
the RAV4, Corolla, Prius, Camry and Lexus RX. Toyota shares down 4.4%, their
biggest daily drop since December 2018. 
- Especially in Southeast Asia, the spread of COVID and lockdowns are impacting
Toyota's local suppliers. Adjustments to production in China are expected to see a
further loss of 80,000 units, with smaller losses in wider Asia.
Toyota is actively implementing measures to prevent the further spread of the virus and
remains committed to providing timely updates as the situation requires. Going forward, the
company will look at ways to further diversify its supply chains and is attempting to find
replacement parts from suppliers in other regions

Recommendation for Toyota

The main recommendations for Toyota Motor Corporation are:
- Stick to the globally accepted TPS Toyota production system in which the quality of
the car which is produced has more importance.
- Increasing production capacity in worldwide plants as it is competing in the global
market.
- In order to regain its competitive advantage, it can be proposed that Toyota
undertakes a drastic restructuring of its business model. For example, it can be

30
 suggested that the company will benefit from either minimizing the number of
factories across the globe, and removing factories from areas affected by the Covid
epidemic in order to minimize production costs. 
- Toyota should promote business and cost structure reforms to realize a solid
management platform so that it can respond quickly to the changing market
circumstances. Specifically, Toyota should maintain a streamlined structure through
the reduction of fixed costs and enhance its business in established markets in
developed countries. 
- Toyota should accelerate its business expansion into rapidly growing emerging
countries 
- By increasing production facilities in Asia, will enable Toyota to have cheaper
delivery channels and become closer to the emerging market customer. 

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