Report on Supply Chain Strategy and Issues of Toyota

Added on - 01 May 2020

  • 21

    pages

  • 5098

    words

  • 3

    views

  • 0

    downloads

Showing pages 1 to 6 of 21 pages
Running head: STRATEGIC PROCUREMENTStrategic ProcurementName of the StudentName of the UniversityAuthor Note
1STRATEGIC PROCUREMENTExecutive SummaryThe report presents the findings consisting of the issues that an organization Toyota faces in itssupply chain practices. The purpose of the report is to develop an understanding about the supplychain strategy and the issues associated with such strategy. Thus, to fulfill the objectives andpurpose, the report intends to evaluate the issues associated with the supply chain of Toyota,Australia. It identifies the gaps in the strategies applying theories and models and eventuallydevelops strategies to resolve the issues. The findings indicate that the organization faces supplychain challenges in Australian market because the major suppliers Holden stopped producing thesupply items and Toyota does not have such major supplier like Holden in Australian market.Certainly, this issue with supply chain is affecting the overall organizational performance. Basedon this issue, some relevant and specific strategies have been suggested.
2STRATEGIC PROCUREMENTTable of ContentIntroduction......................................................................................................................................4Evaluation of the Supply Strategy...................................................................................................4Application of theory and concepts.................................................................................................6Recommendation- Strategic Plan..................................................................................................15References and Bibliography.........................................................................................................18
3STRATEGIC PROCUREMENTIntroductionThe following report is based on procurement evaluation, which includes the strategicissues faced by the organizations in the supply chain. The organizations often make changes inthe supply chain activities to avoid the unnecessary obstacles in the operation. However, as thebusiness environment has been dynamic in the recent time, the organizations might face differentsupply chain issues in the operation. Thereby, to learn and analyze those issues, the reportconsiders the organizationToyota, Australia.Due to the unfavorable market environment in theautomotive sector in Australia, Toyota is facing some strategic supply chain issues in theoperation. The automotive manufacturing sector remains as an extremely competitive one and,many firms are focusing on their supply chain for the sources of competitive advantages.Thereby, this paper effectively presented the findings of an exploratory research that investigatedthe contemporary issues associated with the strategic supply chain in Australia. The reportdiscusses those issues and applies some particular theories and models. Based on the evaluationof issues and theories, suitable recommendations have been provided that would help the firm todeal with the challenges.Evaluation of the Supply StrategyIt has been identified that the large car manufacturing company Toyota in Australia is onthe verge of leaving the industry and soon, they are going to close their door. Even though, theorganization has made it clear that government subsidy is not the issue but the dynamic marketenvironment, which creates big challenges in the supply chain network. The supply’s demand inthe car-manufacturing sector of Australia is high, the suppliers know the market trends andlikewise, other existing car manufacturing organizations have become accustomed with the
4STRATEGIC PROCUREMENTmarket. However, Barney (2012) mentioned that Japanese technology based firm Toyota did notunderstand the market and the economic relation with trade in Australia. A put forward byChristopher and Holweg (2011), Toyota Australia with the help of partner Sixtree- in the recenttime developed a dashboard that surfaces the data regarding the dynamic status of car transitionthrough company’s supply chain. Even though, the firm seeks to develop a wide supply chainnetwork in Australia car manufacturing sector to meet the growing demands of the customers,several attempts made by the firm failed to implement the initiative. According to Roh, Hongand Min (2014), the organization wants to run the operation in Australia, it needs to work withthe suppliers, stakeholders involved and the government to determine the possible steps.The major issue, which has been identified is that Australia’s car manufacturing sectorteeters on the overall collapse in the wake of Holden’s ultimate decision to stop producingvehicles. Thus, Toyota in Australia refuses to speculate on its future in Australia in the wake ofHolden’s decision. As the leading supplier decided to call off the operation, Toyota is in the needof making relationship with the suppliers. Holden is the second biggest vehicle manufacturer inthe nation, which produce 75000 to 80,000 vehicles. Nevertheless, mentioned that the carmanufacturing organization Toyota could be able to sustain its operation with the combination ofimported as well as domestic parts (Mullanet al. 2011). Hence, Shaheen and Cohen (2013)mentioned that if a single component manufacturer supplies the firm can also be a useful optionfor Toyota. Nonetheless, if Toyota relies on such single component supplier, another supplierwith the same volume could be difficult to continue and this probably remains as the majorconcern for Toyota’s supply chain network in Australia. In addition to this, it is also observedthat Toyota finds the supplier challenge due to the presence of other car manufacturing
5STRATEGIC PROCUREMENTorganizations in the sector. This means the organization faced the deficiency of suppliers andthey failed to build a long-term relationship.The existing suppliers already have relationship with other car-manufacturing firms.Conversely, Ghadimiet al.(2012) mentioned that as Toyota has large market share in the Asiannations and thereby, a large proportion of the profits come from the Asian markets. Due to thisfactor, the firm did not pay the required attention to the competitive Australian market. The firmwould have fulfilled the suppliers’ needs if the demands of products were observed to be high inthe Australia market. In addition to this, even though Holden was the one major supplier ofToyota, the firm did not make or come into any long-term relationship with Holden. Moreover,the organization also did not pay required attention to other suppliers. Bennett and Klug (2012)mentioned that the reluctant nature of Toyota in Australian market observed because the firm didnot experience high demands in the market. In this context, Dodgsonet al. (2011) alsomentioned that dynamic market environment and presence of large competitors likeFord,Mitsubishiare the reason of poor market share of Toyota. Therefore, it can be mentioned thatpoor demands of vehicles created an indirect impact on the supply chain activities of Toyota.Application of theory and conceptsThe automotive sector in Australia has undergone a transformational evolution over thelast two decades. In this context, Timmeret al.(2015) commented that conventional techniquefor developing an automotive supply chain requires a wholly, integrated as well as the leanmaterials. Historically, it is observed that supply chain operated under a “Push model” andhence, in this model the marketing as well as sales covers an appropriate speculation at themarket demand and then feed the forecasts into the design to make model production volume. In
desklib-logo
You’re reading a preview
card-image

To View Complete Document

Become a Desklib Library Member.
Subscribe to our plans

Download This Document