Is having a single vendor more efficient than having multiple vendors in supply chain management?

Running head: MANAGEMENT THEORY AND PRACTICE
“Is having a single vendor more efficient than having
multiple vendor towards quality process in supply chain
management? Does it have an impact on the working
capital and inventory management?”

2MANAGEMENT THEORY AND PRACTICE
Table of Contents
Introduction................................................................................................................................3
Background of Toyota...............................................................................................................3
Aim.............................................................................................................................................4
Objectives...................................................................................................................................4
Single supplier............................................................................................................................4
Advantages and disadvantages of Single suppliers................................................................4
Advantages.........................................................................................................................4
Disadvantages....................................................................................................................4
Multiple supplier........................................................................................................................5
Advantages and disadvantages of multiple suppliers............................................................5
Advantages.........................................................................................................................5
Disadvantages....................................................................................................................5
Supply chain management.........................................................................................................6
Importance of supply chain management..............................................................................7
Factors in management of supply chain.................................................................................7
Toyota supply chain management..............................................................................................8
Suppliers...............................................................................................................................11
Inbound logistics..................................................................................................................11
Operations............................................................................................................................12
Outbound logistics...............................................................................................................12

3MANAGEMENT THEORY AND PRACTICE
Marketing and sales.............................................................................................................13
Service..................................................................................................................................13
Technological development.................................................................................................14
Human resource management..............................................................................................14
Procurement.........................................................................................................................14
Firm Infrastructure...............................................................................................................15
Just in Time theory...................................................................................................................15
Resource based view theory.....................................................................................................17
Conclusion...............................................................................................................................19
Reference List..........................................................................................................................20

4MANAGEMENT THEORY AND PRACTICE
Introduction
In manufacturing industries to produce the product there is a need of different material hence
they depend on the suppliers to manufacture the products. Suppliers play a major role in the
organization without these people manufacturing a product is very difficult and this impact
on the performance of organization. Supplier is also called as vendor he is the person who
supplies goods or services to the organizations. Supplier furnishes the goods and services to
the businesses and in return for agreed compensation. Suppliers would not be engaged in
direct communication with the consumers, rather they leave the task to the organizations or
vendors. Suppliers are more important for the growth of the business, they are mostly found
in all types of business but in few organizations or businesses depend on single supplier and
few organizations depend on multiple suppliers. Specifically, large organizations such as
manufacturing companies depend on the multiple suppliers. This study focused on
understanding whether single supplier is more efficient or multiple suppliers are efficient
towards quality process in supply chain for this a case study of Toyota has chosen. In this
study it will be proved that multiple supplier is more efficient compared to single supplier as
multiple supplier helps in reducing dependency on single source and it helps in balancing the
risk. Hence in this study multiple suppliers and advantages with multiple suppliers will be
discussed and theories like Just in time and Resource based view will be used along with this
back ground of Toyota and supply chain will be critically analysed.
Background of Toyota
Toyota is the company which manufacture vehicles it is the largest and the leading
automobile company in the world. This company is established in the year 1937 by “Kiichiro
in Japan. Toyota Industries Corporation which was founded by Sakichi Toyoda in 1926. This
is the largest company who mainly manufactures vehicles. It operations are all over the world

5MANAGEMENT THEORY AND PRACTICE
and the company products are sold in nearly 170 countries and it has employed 320,808
employees. It has 40 factories in japan overseas it has 50 companies and 60 plant sites
(Toyota, 2017). A hybrid technology have been used by this company especially in Prius and
Hybrid Camry with his it became a leading company in the world. The main strategy of
Toyota is lean management this helped in achieving success. The company has multiple
suppliers this helped them in achieving competitive advantage and helped in achieving
success.
Aim
The aim of this report is to identify whether single vendor is efficient or multiple vendor
towards quality process in supply chain management and to understand whether it impact on
working capital and inventory management.
Objectives
- To explain multiple vendors are more efficient than single vendor
- To understand whether supplier impact on working capital and inventory management
or not
- To understand supply chain management and theories relating to management
Single supplier
A method of purchasing the material from one supplier is called single supplier that is the
company depends 100% on single person for raw material even though there are many
suppliers in the market.
Advantages and disadvantages of Single suppliers
Advantages

6MANAGEMENT THEORY AND PRACTICE
- By means of single suppliers, close relationship can be developed by the company and
it foster reliability, quality, co-operative action and short lead times.
- Single supplier saves time, can mitigate VAT and he can understand the business
closely and helps in the development of campaigns, they look after the organization
reputation and reduces the risk
- Cost cutting is possible if the orders are placed with one supplier
- Can improve inventory control, can negotiate the deliveries and will be easily able to
integrate the systems.
Disadvantages
- Sometimes the potential customers are mainly may concerned more about the risk to
their supplies
- Ensuring that the Toyota remain competitive it will become difficult for the company
if they depends on single supplier for the multiple products.
- Small issues in the organization will lead to the bigger issue
- There is a risk that over time, the balance of dependence will become lopsided.
- There will be high indirect costs
Multiple supplier
Purchasing the required material from two or more suppliers is called multiple supplier
Advantages and disadvantages of multiple suppliers
Advantages
- If one the supplier is facing problem with financial or business difficulties the the
company will be having at least one suppler with the company to fall back on hence