Case Study on Toyota Motor Corporation

This case study focuses on Toyota Motor Corporation and discusses project delivery methods, financial contract types, best procurement methods, and risk management plans. It explores the importance of managing procurement prices and maintaining good relationships with suppliers. The study also highlights Toyota's involvement in various business fields and its efforts to improve supply chain management and procurement strategies. The report provides insights into different project delivery methods, financial contract types, and procurement methods that can contribute to the success of a business.

Case Study

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Project Delivery Methods............................................................................................................4
Financial contract type.................................................................................................................6
Best procurements method..........................................................................................................7
Risk management plan -..................................................................................................................8
Risk quadrant analysis.................................................................................................................8
Risk mitigation plan.....................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................10

INTRODUCTION
Procurements deal with there important sourcing of differentiated activities with having proper
level of negotiation and strategic level of selection of goods and services. There is importance of
properly managing procurement prices in order to have the maintenances a good level of
relationship with respective suppliers and staying organized way. this process is considered to be
crucial aspects for the success of business operation which allows them to meet up specific goals
as per the needs of stakeholder’s expectation. In this report, there is case study on Toyota motor
corporation is more efficient and effectives automobile business and facility at the global scale.
In addition to that’s, the report will have discussion on appropriates project delivery method and
with evaluation of different financial contract types which will be helpful in achieving the
various grades. At last the report will discuss best procurements methods and risk managements
plans which will be efficient in making business s more prosperous.
MAIN BODY
Toyota industries have the involvement if the wide ranges of the business fields along with
procuring different parts, materials along with equipment’s having the wide range of supplier’s
form all over the world. The firm have their requirements for the suppliers to have their
providing of the quality items at least or reduce prices in more timely manner. In addition to
that’s the firm have wants to more level of promoting environments preservations in order to
have meet up customer demand. in this case study have addition to their long-term view which
have their relationship with suppliers with the aim to have the realisation of an amicable level of
relationship by mutual benefit which is based on fair business practices.
To have proper visualization of supply chain which will be help in identifying appropriate
components which are being supplied by one manufacture as it is difficult to have replacements
alternatives. In addition to that Toyota is having decrease level of dependence on such
components as the unique level of designing and sharing information which is based on
equipment specification about in-house production facilities and suppliers. Since, the Toyota
have their major concern to have consistent improvement in supply chains managements and
procurement strategies as the needs of customer are evolving by gaining more level of popularity
of more hybrid vocalise and electric cars.
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Project Delivery Methods
The project delivery is considered be the system which is been used by their organization in
more of financing design, construction, operations along with proper maintained of the services
in differentiated structure. In addition to that’s there is the facility by entering more of legal
agreements with one or more entities. In addition to that with choosing the right project delivery
method which is one of most important decision made every owner to have the strategies any
construction and manufacturing project. In addition to that’s their implication of most
appropriates project delivery methods will helpful in methods reducing risk along with
improving like hood for attaining project cost, quality and appropriate schedule goals.
Commonly used project delivery methods
An owner has the several areas of concerns at the time of embarking projects as the chosen
project delivery methods have proper combination of the hybrid level of multiple method
deliveries. Each of these delivery methods is helpful in establishing proper level if different
relationships among the various parties which is being involved which is subsequently different
level of risk.
Construction management at risk is considered to be delivery methods which have the
entailing of the commitments by the CMR for the performance of manufacturing to have
delivering the projects which is being summed up be defined schedules and prices. in addition to
that’s there is either the fixed level of lumps which have the guarantees maximum price. This
have the clear providence of there contraction input to the respective owner during their
designing phases along with becoming their general contracture during manufacturing phases.
Design bid build (DBB)- this their traditional level of U.S project delivery method which have
the typical level of involvements of three sequential project phases. In addition to that’s as per
the designing phases which have major requirement of the services of designers who will be on
records for the respective projects. In addition to that the next is bid phase when the contractor is
selected following with build or construction phases. With following of build phases when the
project is being built by the selected low bid contractors as this sequence usually have led to the
sealed bid, fixed level of price contract.
Design build – this is the method of projects delivery which have inclusion on the one specific
entity that’s is design builders and the single contract with the specific owners to have the
providence of the engineering design services and construction.
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Multi prime is somewhat which is similar to the Design bid build which have the same as three
sequential phases with the MP as the owner have contracts which is directly with their sperate
level of speciality contracts along with designated elements of the work rather than having single
or prime contractor.
As per the above discussion, it can be stated that the Toyota is trying to have there, the
primary project participants execute a single contract specifying their respective roles, rights,
obligations, and liabilities. In effect, the multi-party agreement creates a temporary virtual, and
in some instances formal, organization to realize a specific project. This have inclusion of project
alliances win order to have creation of project structure where the owner have guarantees direct
cost of non-owner parties. On the other hand, as single purposes entity which is considered to be
temporary with legal structure to have realization of specific project.
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Financial contract type
A manufacturing financial contracts has the providence of legal agreements which is binding in
natures for the both builder and owner. This is will have there executed job will have the
receiving their specific amount of compensation or how the compensations are needed to be
distributed. These are usually being defined as their proper disbursement which is in going to
have details of other specific items like more in terms of durations, quality, specifications and
other items. There are major contacts which have variation along with being customized to meet
more level of customer needs as per the project.
Lump Sum or Fixed Price Contract Type
This contract has the usually have the defined to have the disbursement which is going to be
made in details for the specific terms. This have inclusion incentive benefits which have early
termination by having all level of penalties which are known as the liquidated damages. in
addition to that’s the Toyota can have preferences over clear scope which have define schedules
which is been reviewed or agreed upon. This is been used to have their transferability of risk to
the respective builder ad the owners in order of have avoidance of chances for unspecified
works. This is harder’s to have get credit backs when the work is not completed so must have
consideration while proper analysing of options.
Cost Plus Contracts
This have the inclusion for the payments of actual cost, purchases or the other expenses which
is generated directly from the construction activity. This have maintains of specific information
about their pre negotiated contactor overhead and profit. There is the cost have detailed must be
classified as direct or indirect cost. There are multiple variations of Cost-Plus contracts and the
most common are:
Cost Plus Fixed Percentage
Cost Plus Fixed Fee
Cost Plus with Guaranteed Maximum Price Contract
Cost Plus with Guaranteed Maximum Price and Bonus Contract
The scope has not been clearly defined as owner responsibility in order to have the
establishment of limits. some of the aforementioned which are options as those incentives to
have serving their peaky o the simpler level of owner interest along with avoiding their
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unnecessary changes. In this approach. It is difficult to have their track more level of supervision
which is needed.
Guarantee maximum price
This is contract have set limits with maximum prices as it put the cap in the price of contract
where it exceeds. This the cost which is in beyond guarantee maximum prices which may needed
to be covered by the contractor. These contracts are considered attractive to customers because to
have shift significant level of amount if the risk which is more of party performing work.
As the Toyota will have the applicable to have the proper evaluation process fixed price
contract to have the transferability of risk to the respective builder and the owners in order of
have avoidance of chances for unspecified works. This is harder’s to have get credit backs when
the work is not completed so must have consideration while proper analysing of options.
Budget
types
staff
codes
description April may June July august September
project team 30000 60000 60000 75000 75000 75000
IT departments 40000 40000 40000 40000
Training
deployment
10000 10000 10000 10000 10000 10000
40000 70000 110000 125000 125000 125000
administration expenses
consultants 20000 20000 20000 20000 20000 20000
market expenses 2000 2000 2000 2000 2000 2000
change
management
5000 8000 10000 10000 10000
27000 22000 30000 32000 32000 32000
staff expenses
travel and
subsistence
5000 1000 1000 1500 2000 1500
capital
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development platform 350000
production
platform
850000
0 350000 0 0 850000
direct cost
development 10000
carriages 5000 6000 8000 10000
hiring traipsing
facilities
20000 10000 10000 8000
PC upgrades 25000 30000 11000 7000
60000 46000 18000 11000 8000 17000
control cost
accommodation 10000 10000 10000 10000 10000 10000
HR services 4000 6000 6000 8000 8000
14000 10000 16000 16000 18000 18000
Best procurements method
Competitive Procurement Methods
This is about having the acquisition of the procurements through fair and open level of
competition. This is considered able through the acceptable methods which is more into the
competitive procurement inclusion of invitation to be bid by request for the proposals along with
request for quotes or the considered amount of combinations which is collectively have
invitation. The advantages have the key advances which have no nepotism as the tenders or bids
are been evaluated on the basis of certain predetermined criteria. On the other hand, there is
advantages as the value of money as from the perspective which process tendering helps in
promoting competitive market.
Negotiated Procurement Methods
This is tendering to have the perspective of suppliers it orders to have the selective level of
response to make the invitation of the tender which have the major offering of the supply of
different goods and services. In addition to irrespective to nature in terms goods and services
which is important for securing tenders which have the following procedure which is such as
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opening up of tendering, selective tendering, negotiates tendering as the serios framework
tendering. Negotiated tendering can be seen as anti-competitive and exclusive, with the potential
for ‘cosy’ relationships to develop between the client and the supplier. Negotiated tendering may
not be permitted by some organisations due to the perceived lack of accountability
So as per the proper level of evaluation of Toyota is necessary to have the implementation
Competitive Procurement Methods which have inclusion of invitation to be bid by request for the
proposals along with request for quotes or the considered amount of combinations which is
collectively have invitation. The advantages have the key advances which have no nepotism as
the tenders or bids are been evaluated on the basis of certain predetermined criteria.
Risk management plan -
Toyota is mainly defined the risk as an event with the significant potential causes,
unexpected losses in the enterprise operations. The organization has become fundamental
approach is to identify the various type of risk which mainly occurred of enterprise operations
(Ferenhof, 2020). It must ensure that management safety and also increase the corporate value by
exposing itself to risk. In another way, it also controlled by using an appropriate approach. It can
be identified the different type of risks.
Risk Identification/ register
Risk Description degree
Financial risk: Toyota is mainly identifying the policies and procedure such as
limit amount of risk assets with no more amount of risk buffer. It
must ensure that return risk. In most of cases, it will decrease the
turn over which directly effects on the overall business
profitability in global marketplace.
Moderates
due to
planning
Credit risk: Toyota rate supplier on the high level based on the financial
position by using independent parameter. At that time, it only
specifies limits of each transaction whereas suppliers who receive
the lower rating. In this way, Toyota face situation of losses in
transaction processing.
High level
Market risk the position of Toyota in market is limited whereas it easily
exposed to the risk of price fluctuation’s such as rubber, regular
monitors, crude oil and other type of non-ferrous metals.
Low
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Risk quadrant analysis
It is based on the process where identifies the commodities as per risk and value. It is the
most efficient strategies for categorizing the risk into different manner. In Toyota, it is treated
with proper routine planning which don’t require any attention and line of attack.
By using risk analysis matrix, it mainly involve the risk that may be threaten in the
decision-making. It also considerations of enteprise venture whereas it could be identify that how
toyota fails due to financial, market risk. In this way, it will require to analuyse what could
happen when implementing plan (Ferenhof, 2020). This matrix allow for user to identify the
issues and applying suitable actions.
High impact, loww probability risk and low impact, high probability these are action in
the quadrants which may be valuable for business. In this way, it should be carefully taken
sserious consideration to maintain risk.
As per analysis, it has found that Quadrant -1 have low probability so that credit related
risk considered in this phase. Although actions of quadrant -4 has lower impact which are likely
to increase. So that financial and market rosk consider in this phase.
Risk mitigation plan
Mitigation of risk is mainly involving the identification of various action that help for
reducing the likelihood, it also reduced the impact of financial, credit and market risk. It will be
implementing the risk mitigation strategies to manage overall project.
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Action
 Reinforcement of policy which easily change the entire management system. In order to
provide the opportunities for staff members feedback, procedure finalization.
 Implement training plan which allows for increasing performance and efficiency of
business.
 Promoting the brand awareness for adopting the new procedure, style in business
expansion.
CONCLUSION
From the above file, it can be concluded that There is importance of properly managing
procurement prices in order to have the maintenances a good level of relationship with respective
suppliers and staying organized way. Since, the Toyota have their major concern to have
consistent improvement in supply chains managements and procurement strategies as the needs
of customer are evolving by gaining more level of popularity of more hybrid vocalise and
electric cars .A manufacturing financial contracts has the providence of legal agreements which
is binding in natures for the both builder and owner. Competitive Procurement Methods
considered able through the acceptable methods which is more into the competitive procurement
inclusion of invitation to be bid by request for the proposals along with request for quotes. This
have Toyota in decrease level of dependence on such components as the unique level of
designing and sharing information which is based on equipment specification about in-house
production facilities and suppliers
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REFERENCES
Book and Journals
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CONCEPT IN IMPROVING PROCUREMENT PROCESS OF NEW ITEM AND
PROJECT PROCUREMENT. Russian Journal of Agricultural and Socio-Economic
Sciences, 92(8).
Cortiglioni, S., Salcerini, L. and Verga, D., 2020. Toyota Methods and Operating Models:
Achieve Business Success with the Toyota Way. Kogan Page Publishers.
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Forces (Doctoral dissertation).
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Malek, R. and Gad, G.M., 2019. Lean Principles Application in Public-Private Partnership
Projects’ Procurement. Journal of Infrastructure Systems.
James, R., 2019. The Toyota Way or the unions’ way?: Examining the nexus between lean and
unions in Toyota Australia. The International Journal of Human Resource Management,
pp.1-39.
Kaneko, Y., Endo, M., Sassa, S., Shiga, T. and Tanigawa, Y., Toyota Motor Corp, 2019.
Collection and delivery system and information processing apparatus. U.S. Patent
Application 16/257,815.
Soliman, M., 2017. A comprehensive review of manufacturing wastes: Toyota production
system lean principles. Emirates Journal for Engineering Research, 22(2), pp.1-10.
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Raskind, J., Toyota Motor Sales USA Inc, 2018. Methods for tracking and analyzing automotive
parts transaction data, and automatically generating and sending at a pre-determined
frequency comprehensive reports thereof. U.S. Patent 10,019,691.
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