WELCOME

Presentation
On
Toyota’s Supply Chain
Management
 TEAM
NAME ID

1. Sujan Paul Anik 15304078

2. Thowhid Islam 15304111

3. Subarna datta 15304038

4. Annee Sharkar 15304039

 Introduction
Toyota Motor Corporation

 Founded 1937
 Founder Kiichiro Toyoda
 Headquarters Toyota City, Japan;
 Industry Automotive, Robotics Financial
services and Biotechnology
 Products Economy/mainstream/luxury
vehicles
 Employees 316,121
Toyota SCM

Minimizing supply chain costs

while keeping
 a reasonable service level
 customer satisfaction
 quality
 on time delivery, etc.
 “making the vehicles ordered by
customers in the quickest and most efficient way, in
Objective order to deliver the vehicles as quickly as possible”.

 Right product
 Right price
 Right store
 Right quantity
 Right customer
 Right time
Supply chain management in Toyota
Toyota supply chain
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”

system
 Value analysis reduces costs
 Production smoothing enables suppliers to maintain
a constant volume of business
 Focus is on long-term relationships that underscores
cooperation, teamwork
Managing suppliers

 Suppliers are extensions of Toyota

 Care and develop as own associates
 Long term partnership
 Tier structure : levels of responsibility
 Strict cost target and timing
 Integrated system (JIT)
Purchasing challenges

 Normal expectation : 3 to 4 % price reduction

per year after model year launch
 Meet best price with Toyota quality
 Trim master goal : 30% price reduction for
new vehicle launch
Key to logistics performance

 Packaging : mixed box size, small pallet size

 Dedicated transportation service
 Consistent daily route, period route revision
 Good timing at all connection points
 Order fluctuation allowance built into route capacity
plans
Manufacturing

 Toyota Production System

 Best quality
 Lowest cost
 Shortest lead time
 Best safety
 High morale
 Through shortening the production flow by eliminating the waste
Manufacturing

 Continuous improvement
 JIT
 People and teamwork
 Jidoka – quality (make problem visible)
 Waste reduction
 Leveled production
 Stable and standardize process
 Visual management
 Kanban – flow of correct information
 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

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 country

 Toyota 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.
THANK
YOU !