Logistics and Supply Chain Management

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LOGISTICS AND SUPPLY CHAIN MANAGEMENT
STUDENT’S NAME
COURSE
UNIVERSITY
DATE

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Operation and supply chain management is very vital for the success of any business unit.
Operation management refers to the process of transforming various inputs such as labor, capital
and many others into the desired output in form of products which result to profit maximization
by the business unit (Harvey, Heineke and Lewis, 2016). Supply chain management refers to an
operation field of management that is mainly involved with how the raw materials and other
products move from the suppliers to the final consumers (Christopher, 2016). Many companies
have formulated effective strategies to enhance profit maximization through various activities
such as reducing the cost of production, improving the quality of output for their products and
engaging in sustainability practices such as green purchasing. Green purchasing in supply chain
management is where the organizations in corporate sustainability practices in trade where they
deal only with eco-friendly products (Heizer, Render and Munson, 2016).
Basically, supply chain management involves the management of activities such as
monitoring, designing, controlling and planning the process for purchasing various goods and
services which makes the organization to gain the competitive advantage over other existing
businesses. The activities involved in the supply chain process include all the parts and processes
such as logistics, sourcing of products, product development and information systems used to
monitor the movement of the products in the entire process. This study is going to focus on the
supply chain management system for Toyota which operates in various countries including the
UK. The two areas that the study is going to focus on are: how the company manages the
business relationships in its supply chains together with the logistic mix, channels, networks,
transportation and the inventory management approach that the company uses.

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Toyota manufacturing UK started its operations in December 1989 (Toyota, Hallonsten and
Shchepetunina, 2012). The company established various manufacturing plants such as Burnaston
in Derby shire whose sole function was for assembling. The process for assembling in Burnaston
included welding, stamping that involved the pressing of panels from wheel’s rolls, plastic
moldings that involved making bumpers and instrument dashboards/panels after which the parts
were painted and assembled. Toyota has a firm in Deeside whose main function is to assemble
various parts of the vehicle, joining them and do the aluminum casting (Haynes and Ward,
2012).The Company builds Avensis and corolla models in its Derby manufacturing plant.
Toyota came up with a supply chain that didn’t incur the company a lot of costs. The
company had formulated a cost strategy that aimed to reduce the cost of production to the
minimal possible values. The company ensured that it does not compromise with the consumer
satisfaction, quality and time for delivery. The logistic mix that was used by the company was
organizing its suppliers into various functional tiers where the suppliers in the first tier worked as
a team in the process of product development (Jedliński, 2015). The suppliers in the second tier
made the various parts of the vehicle to facilitate the assembling process. The company
manufactures the engines in Deeside and North wales. The suppliers in the first tier cooperated
through effective exchange of information between them which reduced the lead time in the
process of developing the new product avoiding the process of ‘Re-inventing the wheel’.

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The company believes in having an overall development in technology throughout their
suppliers. The company sends some personnel to the suppliers who compensate for the greater
work load in the struggle to provide the company with various parts for the vehicles. This
strengthens the company’s relationship with its suppliers and furthermore, it enables the
suppliers to acknowledge the ‘lean production initiatives for the company’. The company strives
for long lasting good relationship with its suppliers by pursuing a single- sourcing strategy for its
strategic components. The level of collaboration between the company and the suppliers is
usually vertical and horizontal because each supplier for the company shares the destiny with
other suppliers who work with the company. The sourcing strategy used by the company is
perceived to be hazardous to some extent because if the supplier is affected by some factors, the
whole process of production in the company is affected. The relationship between the company
and the suppliers is very flexible creating an economic-oriented relationship between the
company and the suppliers.
The company does not only partner with its suppliers functionally but also in operational
terms as well. The suppliers for the company are the integral component towards the success of
the company. The suppliers are strategically located in the UK in an approximated radius of 56
miles. The company gives a security guarantee for various orders requested from the suppliers
which enables them to supply the best raw materials to the company at the cheapest cost possible
facilitating the achievement of economics of scale by the company. The company does have a
belief for considering the lowest bidder for the supply of the raw materials because it has a
strong belief in the gradual mutual improvement. The company believes in ‘vendor creation and
development’ an initiated action for training its suppliers as per the requirement.