(PDF) International Supply Chain Case Study
Added on 2020-02-05
11 Pages3504 Words557 Views
Business DevelopmentLeadership ManagementProfessional Development
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A) Application of technology and information system in the supply chain to reduce the effectof “bull Whip “............................................................................................................................3B) Use of Customer Relationship Management (CRM) and Benefits to the organization..........5C) The choice between centralization and decentralization which one is predominant and howit impacts supply chain management...........................................................................................7references............................................................................................................................................10EXECUTIVE SUMMARY2
Toyota Motor Corporation is a Japanese based Auto mobile manufacturer in the wholeworld. The company is in Toyota city in the Japan. The company was founded by KiichiroToyoda in 1937 as a Spin off. It ranks 3rd largest automotive manufacturer among the topmanufacturers of the world. TMC has several global popular brands such as Toyota, Lexus,Daihatsu and Hino which gave combined production of over 6 million units to strengthen theposition of the company. It owns 12 plants, 11 manufacturing subsidiaries and 45 othermanufacturing companies that are located in 26 different locations around the world in order togain global advantage. The supply chain management at Toyota is totally based on the Toyota ProductionSystem (TPS). The supply chain strategies of TMC includes mutual understanding and buildingtrust, Structures are interlocked to avoid any short comes in the structures, Jointly improvementof all the activities and the business operations and Kaizen is used for quality improvement ofthe all areas of the business and continuous training provided to all the employees of thebusiness. It also believes in learning new and different things from the business environment thatcan affect the functioning of the business in near future. Being successful business owners in theworld the company faced many challenges in its business path are variability in the salesvolume , problem of standardization arise in the business on terms of boosting development andproduction efficiency of the products or the services.Supply chain case studyA) Application of technology and information system in the supply chain to reduce the effect of “bull Whip “Bull Whip effect is a physical process of the distribution channel which predicts thefuture inefficiencies of the supply chain management of the business. It refers to increasingswings in inventory with respect to shifts in the demand. This concept is developed by JayForrester’s in its book Industrial Dynamics in 1961. The reason behind the given to this effect isForrester Effect on the basis of the name the developer of this theory (Elizondo-Arroyave, G.,2013). The research on the bull Whip indicates that a fluctuation in Point of sale demand ofapproximate 5% will be interpreted by Supply chain management as a change in demand up to40%.3
Following are the causes of the Bullwhip effect on the Supply chain Management of thebusiness of Toyota are:There are several major issues that can lead company towards the path of deterioration.These issues are mostly related with the lack coordination among the internal staffs to managethe proper functioning of the supply chain and delaying in transmitting the relevant informationto the supply chain management of Toyota (Holmberg, 2013). Some important causes of the bullWhip effect are:Delays in delivering the products or the services to the customers of the ToyotaDifficulty arises in the batching of orderDiscounts in sales and price of the product Shortage of the supply arises (Purvis, Naim and Towill, 2013)Delay in delivery is also known as lead time, it is a time gap between the placing of orderand its delivery. The longer the delay the higher is the bull whip effect occur in the TMC.Order batching occurs when Toyota pile up bulky orders before processing them in order toreduce the costs and create reasonable transportation (Sarkis, 2012). The inconsistency in thedemand is another cause of Bullwhip effect.Sales and Price discounts causes bull Whip effect by creating a boom or bust circle. Salesincreases in the case of large discounts. Information technology system can be applied in supplychain management system to avoid or minimize the Bullwhip effect (Singh, Singh and Bhardwaj,2011). The main goal of the supply chain management is to provide good and best qualityservices to the customers. The supply of quality oriented products or the services to the clients toensure the efficiency of the business processes. The key to a lean supply chain as one of theobjectives of Toyota Motor Corporation is to maintain the lean supply chain by Accuracy indemand planning (Tang, 2011).Following are the recommendations to Toyota for improvement in the areas of supply chainto reduce the bullwhip effect:Electronic data interchange - In today's competitive world the technological trend hasincreased in order to gain the competitive advantage over its competitors. Through EDIthe sharing of the information is easy for Toyota to communicate easily with all the4
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