Toyota's Supply Chain and Production System

This report delves into the innovative strategies implemented by Toyota in supply chain management and logistics. It examines the key features and significance of the Toyota Production System (TPS), analyzing its design and techniques. The report focuses on Toyota's logistics methodology for systematic product distribution, highlighting refined methods like Just-in-Time (JIT) and Lean processes that minimize waste and ensure on-time manufacturing and delivery. It also explores the impact of eliminating inefficient processes on profitability and growth, classifying the management involved in Toyota production and outlining the implications of JIT and Lean production for achieving effective supply chain management.

Understanding Operations, Logistics and Supply Chain
Management

Table of Contents
INTRODUCTION ...............................................................................................................................3
Managing business relationships in supply chains.........................................................................3
JIT (Just-in-Time) and Lean Manufacturing within the Toyota ......................................................4
Conclusion............................................................................................................................................6
REFERENCES ....................................................................................................................................7
Books and Journals .........................................................................................................................7

INTRODUCTION
The business organisations identify the needs of the customers, the services they require and
also consider the delivering of the services as per their requirement. Each and every organisation
focus on obtaining the competitive advantages in the growing competition. The organisation
performs various organisation functions in order to accomplish the business organisation. This essay
is regarding two of those essential functions, the logistics and supply chain management. These are
the two main areas of management operations. The study is in context to the Toyota, an automotive
manufacturer established in Japan, its logistic mix and supply chain management. The organisation
uses various techniques and tools for the flow of goods and services, these management operations
are described in the essay(Stadtler,2015).
Managing business relationships in supply chains
Toyota has always adopted different and unique managing strategies for the supply chain
management in the automotive industry. Toyota focuses on modern techniques for supply chain
regarding continuous delivery of the product, which has processed the flexibility in the automotive
market according to the customer demand. Toyota has acquired one of the premier low cost SCM.
Toyota fulfils the needs of the customer and never compromised with the quality and satisfaction of
the customer. In SCM of Toyota there is systematic arrangement of integrated system for the supply.
Toyota includes following steps for Supply chain management:
Planning: Toyota implements the proper and designed plan for emphasizing the systematic supply
chain from the manufacturing plant. There is an individual chain for the production for every
individual part. Blue print is prepared for the step wise supply chain management. Workers are
distributed to the different department for easy reach to the vendor as per the
demand(Rushton,Croucher and Baker,2014).
Analysis of chain: Toyota analyses the customer demand in the market to make it possible to
manufacture as per the given time. Toyota had successfully achieved its target with the
managed supply system. With the cooperation of the employees and labours it makes possible
to supply from one place to other. Toyota uses Lean production system and the just in time
production system to make it unique from the other companies.
Manufacturing: Toyota is one of the finest and has qualitative form of manufacturing unit. Toyota
has always adopted the unique strategies for the production which makes the company much
different from the other companies in the competitive market. It has followed the Lean
Technology which made great to the production unit and has also given new definition the
manufacturing. The method has enhanced the refinement of the product quality and also in the
time management of the company. It has been proved the method for the growth of the
company in terms of cost and quality of the product. Toyota has fixed its standards for volume
mix which influenced the supply chain. As per the demand in the market the company has
analysed the delivery time aspects for the flexibility and necessity of the customer needs.
Through increasing the rate of production Toyota has availed the customer for the comfort and
fast delivery of product(Prajogo and Olhager,2012).
Online Receipt: In the modern aspects of the market, Toyota provides online marketing too for the
delivery of the product to the distributors which would help for the customer to get the product
easily. Online orders make the supply chain process much faster and it made the accuracy of
product to be delivered on expected time of the customer. Dealers directly contact to the
distributors and make order online which helps in trekking the product online where the
product is on the present time.

Layouts: Toyota has its layouts in the part of every country which make easy for the dealers to
contact on emergency or demand of product in the market which avails the support for the
query of problems faced by the dealers and customer(Wassenhove and Pedraza,2012).
Modified Management: Toyota has adopted the unique modified management to control the
supply chain of the company. They would make the systematic plan for the vendors to make
supply on time and with the proper quality. They would also manage the risk faced in the
distribution and be ready at the time of risk and give the safety measures to overcome the risk
in the supply chain management.
Distribution: Initiated from the manufacturing part with the six sigma methods and then to supply
to the inventory in the plant, vendors in the plant evaluates the order followed by the
distributors to reach on time. After which the product is supplied to the transport logistics for
the supply to the distributors. Then to the dealers of showroom according to the demand of the
customers.
JIT (Just-in-Time) and Lean Manufacturing within the Toyota
Toyota has implemented the unique methods for the production system one of the influencing
method to get supply of the product to the customer on time which reduces the time, cost and need
of the customer. From this approach Toyota optimizes a better relation among the buyer and the
supplier. It strictly follows the awareness of on time delivery and the customer
satisfaction(Heizer,2016).
Toyota believes in adopting such methods to maintain the value and image of the product in the
automotive industry. JIT follows Pull strategy and focuses on the reduction of the work load and the
cost of the product. Wit the reduction of stock which could make loss to the company with the dead
stock and production of product according to the demand of the customer. It has increased the
capabilities and strength of the company in the production process. It has also attracted towards the
company product which made an image of delivering a product on time with the customer
satisfaction. Beside this it used a method to reduce the waste of the company which has also even
lead to the profit and growth of the company.
Just in Time process had gained the belief of the company form feedback by the customer. It also
helped to innovate the Toyota production system with on time strategies which increased the
quantity of production as per the demand in the competitive market. The production system of the
Toyota complete the demand of the customers very efficiently and quickly by combining or linking
all the production activities with the marketplace demand(Seuring,2013).
The Just in time process of production focuses on effectively tuning the operations in
assembly series using only the required amount of items only when needed. Assume a process
developed and designed to manufacture six different kinds of products, where weekly demand for
the variety of products fluctuate up and down by 30% and the daily mix of product types changes
continuously. Just in time production process provides a continuous, smooth and optimised the flow
of work, with measured and effectively planned work-cycles times and the flow of goods on-
demand, reducing the cost of time wasted, capacity and materials. The team members can properly
focus or concentrate on their operations and tasks without any interruption or disturbance, that help
to achieve better quality, timely delivery and satisfaction for the customers of the Toyota.
Lean Manufacturing Process
Lean process is the technology implemented to overcome the Kaizen process which has lead to the
reduction of the growth of the company, Kaizen meant “change for Better”. Lean technology has

eliminated overburden and the workload in the production unit of Toyota. It also affected the
customer values to the goodwill of the company(Sarkis,2012). Lean introduces five key features as
Flow, Value stream, pulling strategy, perfection and values of the customer. It has also improved the
quality of the production system and develops perfect values for the company, also had created the
process of Toyota process which leads to the “Zero Waste” in the production unit. This method not
only reduce the waste it also created an innovative method to the production unit. Lean
manufacturing used the key features to refine the Toyota Production system.
Lean analyses each steps regarding the process of production unit to control the time taken for the
process and to avoid the wastage of the material while the production. It also helps in achieving the
objective with the high quality products. With the implementation of lean methodology, Toyota has
made its strong image and strength in the automotive industry in the competitive market. The
Toyota's production system is one of the greatest manufacturing success story across the world. The
Toyota production system can be known as a “Lean production process”, it is approach to organise
the logistics and manufacturing operations at the Toyota. The main objective of the Toyota
production system is waste elimination, called as “Muda”. The Muda is the Japanese word which
refers to wastefulness or futility. It can be divided into six different elements or the seven wastes
which are as follows -
 Overproduction – The major waste of a production system, the overproduction means to
produce a product before it is actually needed or required. The overproduction of a product
is completely a waste and is very costly for the production system of an organisation. It
creates a barrier in the smooth flow of the manufacturing operations such as smooth flow of
raw material, quality of the products as well as the productivity of the production process.
The overproduction also causes the wastage of time, increasing the cost of storage and
difficulty in detecting the errors or defects. The Toyota manufacturing system is known as
the lean manufacturing process as they produce the products at the right time according to
the required demand(Walker and Jones,2012).
 Waiting – When the flow of goods or products stops somewhere or is in process, the waiting
waste takes place. The production system also faces issues in the flow of products which
leads to the poor production and decreases the productivity. The Waiting is a high waste for
the whole manufacturing process as it consumes a lot of time, the Toyota uses the linked
processes together in order to develop a chain of flow so that no waiting occurs.
 Transporting – The products are being transported after the production as well as during the
production process. This transportation includes a high cost which does not add any value in
the price of the products. This waste is not easy to be eliminated or reduced as transportation
is necessary and requires high cost.
 Inappropriate processing – The companies often use very high quality and super expensive
tools and equipments in the production process where simple equipments can be used. The
Toyota is known for using low cost mechanization combining maintained machinery. The
lean production process determines that the organisation should invest on smaller and
flexible tools or equipments which can enable the reduction of these kinds of processing
wastage(Winter and Knemeyer,2013).
 Unnecessary Inventory – The another waste that needs to be eliminated from the
manufacturing process is the unnecessary inventory, the unnecessary inventory holds a lot of
space and storage capacity of the manufacturing plant. This makes it difficult to identify the
problems and issues.
 Excess and Unnecessary motion – The excess waste can be an issue in the production or
manufacturing process, This waste is basically related to the movement of products and
commodities. It includes all the activities such as walking, lifting, bending and reaching. It
also consists safety and health issues which is a major concern for the organisation presently.
 Defects – The scrap or re-work have a major and direct impact on the overall manufacturing
process and results in increasing the cost for the companies or businesses.
In order to achieve the goal of developing a lean manufacturing process is to attack and identify the

seven waste in the production process(Brandenburg and et.al2014). The Toyota has analysed and
realized that the customers are not going to pay for the extra cost incurred during the process of
production and the cost of waste. The organisation implied the lean production process in there
manufacturing style which enables them to eliminate the various wastes and become a leading
automotive manufacturing company around the world. The Toyota has the ability to manufacture
the products in an effective and efficient manner that helps the company to reach the position where
it is today by developing the Just in time and lean production process.
Conclusion
In this context of report, it concludes the innovative methods and strategies implemented to the
Toyota company in terms of supply chain management and logistics. This report also concludes the
key features and significance of Toyota production system. This report analyses the designs and
innovative techniques adopted by Toyota. It also concluded the logistics methodology used by
Toyota company to the distribution of product in the systematic manner of supply chain
management, also the refined methods such as Just in time, Lean process lead to Zero waste and on
time manufacturing and delivery of the product according to the consumer Expectation and
Satisfaction. This report also concluded the elimination of process which leads to the loss of profit
and growth of the company. The management involved in Toyota production for the arrangement
and proper functioning of operation is also classified in this report. Furthermore, The Essay includes
the implication of the Just in time and lean production process and how it helps to eliminate the
various wastes in the manufacturing process in the Toyota and achieve the effective supply of chain
management and other management operations that helps in manufacturing the products in the best
possible way with the minimum cost.

REFERENCES
Books and Journals
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Rushton, A., Croucher, P. and Baker, P., 2014. The handbook of logistics and distribution
management: Understanding the supply chain. Kogan Page Publishers.
Prajogo, D. and Olhager, J., 2012. Supply chain integration and performance: The effects of long-
term relationships, information technology and sharing, and logistics
integration. International Journal of Production Economics, 135(1), pp.514-522.
Van Wassenhove, L.N. and Pedraza Martinez, A.J., 2012. Using OR to adapt supply chain
management best practices to humanitarian logistics. International Transactions in
Operational Research, 19(1-2), pp.307-322.
Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.
Seuring, S., 2013. A review of modeling approaches for sustainable supply chain
management. Decision support systems, 54(4), pp.1513-1520.
Sarkis, J., 2012. A boundaries and flows perspective of green supply chain management. Supply
Chain Management: An International Journal, 17(2), pp.202-216.
Walker, H. and Jones, N., 2012. Sustainable supply chain management across the UK private
sector. Supply Chain Management: An International Journal, 17(1), pp.15-28.
Winter, M. and Knemeyer, A.M., 2013. Exploring the integration of sustainability and supply chain
management: Current state and opportunities for future inquiry. International Journal of
Physical Distribution & Logistics Management, 43(1), pp.18-38.
Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for
sustainable supply chain management: Developments and directions. European Journal of
Operational Research, 233(2), pp.299-312.