Supply Chain Alignment and Competitive Priorities at Toyota Canada

This report provides a comprehensive analysis of supply chain management at Toyota Canada. It delves into Toyota's competitive strategy, emphasizing differentiation and its impact on the global market. The report identifies key competitive priorities like innovation, quality, and diversity management. It examines order winners and qualifiers, highlighting how Toyota's focus on cost, quality, and price aligns with customer expectations. A supply chain sketch illustrates Toyota Canada's operations, including the Toyota Production System (TPS) and its integration of logistics processes. The alignment of supply chain and operations design with the company's strategy is discussed, along with inbound and outbound logistics. The report also addresses the risks associated with Toyota's supply chain, particularly the disruptions caused by the 2011 earthquake in Japan and the impact of ERP system functionality. Overall, the report underscores the importance of supply chain alignment for achieving Toyota's strategic goals and maintaining a competitive edge.

Running head: SUPPLY CHAIN MANAGEMENT
Supply chain management
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Table of Contents
Introduction................................................................................................................................3
Competitive strategy of the organisation...................................................................................3
Competitive priorities.................................................................................................................3
Order winner and order qualifiers..............................................................................................3
Development of a supply chain sketch of Toyota Canada.........................................................4
Alignment of supply chain and operations design with strategy and competitive priorities.....4
Two significant risks of supply chain........................................................................................6
Conclusion..................................................................................................................................6
References..................................................................................................................................7

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Impact of supply chain alignment with the strategies and competitive priorities at
Toyota Canada
Introduction
The management of supply chain or supply chain management includes various
activities that are managed to ensure proper planning, control and execution of the flow of
products and services with the consideration of obtaining raw materials and resources along
with management of production units until finally producing and distributing those in the
market to reach out to the clients. The most suitable, cost effective streamlined process is
selected for ensuring that the products and services reach the clients starting from the
manufacturing and production processes properly at Toyota, Canada (Toyota.ca, 2019).
Competitive strategy of the organisation
The competitive strategy is underpinned with the management of core competencies
and skills of Toyota along with the outsourcing of non-core competencies, which has helped
in coordinating the functions across the supply chain partners. The business strategy of
Toyota has allowed to respond to different market conditions and nature of the market to
ensure that the company can stay ahead of the competitors and determine the most preferred
field of operation by aligning with the corporate strategies too. The generic strategy has been
the most influential in representing the approach undertaken by Toyota to compete in the
global emerging markets. The differentiation generic strategy is effective for developing
uniqueness by adding distinguishable features in the product, thus allow for supporting the
company’s ability to make a global reach and attain competitive advantage in business too
(Christopher, 2016). The differentiation has enabled Toyota to provide airbags in both
small and medium sized cars, which is a huge unique feature made available for the
vehicles delivered by the company. Moreover, the front and rear seats are provided

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with the airbags entirely, which is a huge benefit provided by the company for
maintenance of better security. This should arouse interest among clients and influence
their buying behaviours to gain sustained competitive advantage in business too. By
aligning the strategy with the SCM, it can become easier to minimise the ways, manage
inventory cost and improve the response time, furthermore aim at achieving the strategic goal
of managing innovation all throughout the differentiation process to sustain in the
competitive marketplace.
Competitive priorities
The most important competitive priorities of Toyota are to embrace “Ideas for good”
featured technologies campaign to manage innovation in automotive technology and build
quality, durability of vehicles that can be reliable and effective for contributing to the
innovation perspective largely too. The diversity management is another competitive priority
that can allow the business to respond to the changing market conditions and develop a
skilled and knowledgeable workforce to facilitate innovation all throughout the business
processes. This will foster consistent innovation and at the same time, work closely with the
senior managers and Diversity Advisory Board for contributing to excellence in terms of
quality and efficacy and marketing approaches too (Monczka et al., 2015).
Order winner and order qualifiers
The order qualifier enables adding some unique feature or characteristic to the product
so that it can be qualified to meet the needs of clients and considered by them. The order
winner, on the other hand, enables a particular feature or characteristic that can allow the
customers to win the bid during a purchase. The order qualifiers act as determinants of
success for Toyota and few of these are cost, quality and price are the major order qualifiers
that can enable the company to gain competitive advantage in business to win the markets

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and at the same time, facilitate supporting different marketing needs to ensure client
satisfaction largely too (Jacobs, Chase & Lummus, 2014). The perception of order qualifiers
and order winners should match the perception of clients and this will assist in gaining
positive sales performance along with removing the gaps between the opinions and feedbacks
of managers and clients effectively.
There have been certain issues related to the reliability and durability of Toyota cars,
which often reduces the market share and thus it is essential for the business to manage
continuous innovation and maintain standardised quality for keeping pace with the rapid
changes in market conditions and ensure meeting the clients’ needs and expectations with
ease and effectiveness too (Hugos, 2018). The success of a product and the business
performance are dependent upon the link between company’s perception of the strengths of
the product and perception of consumers for the specific product. Thus, it is essential for
Toyota to manage the order winners properly that are market and time specific and this can
support different needs of marketing, furthermore ensure development and implementation of
strategies based on the changing market conditions too. Thus, the order winners could be the
production processes, investments made by the shareholders and decisions regarding the
location to be set up for the manufacturing units as well (Seuring, 2013).

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Development of a supply chain sketch of Toyota Canada
Alignment of supply chain and operations design with strategy and competitive
priorities
The Toyota Production System or TPS requires logistics processes for managing
smooth flow of production along with timely deliveries of the products without
compromising on the quality of products, rather prioritising more on the inventory pull
system for increasing the demands high frequency and manage greater delivery of products
and services. Considering the strategic implementation and planning, there have been
investments of over US$1 billion for the purpose of constructing a new manufacturing and
production facility to produce the product, i.e., the new Corolla (Wisner et al., 2014). The
new and technologically advanced plant consists of the latest TNGA production engineering
innovations, which can employ over 2000 workers and produce a maximum product number
of 200000 units on an annual basis. The plant has been designed with the management of
TNGA production engineering technologies, which could leverage the existing robust supply

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chain base as well as improve the infrastructure of transportation facilities largely. To focus
on the competitive priorities including the quality and price, Toyota Canada has made sure to
conduct central planning and managed coordination of more logistics functions along with
integrated management of infrastructure, route engineering and returnable container
management too (Mangan, Lalwani & Lalwani, 2016).
The main suppliers of Toyota are Bridgestone, Tesla Moors, Cypress semiconductor,
Magnuson products, Autometer, Goodyear, Optima batteries, etc. These suppliers are located
in different parts of the world and are associated with the delivery of raw materials and
resources along with the upholstery, tires, windshields, etc.
The inbound logistics include obtaining the raw materials and resources from the
suppliers including the steering wheel, leather seats and other smaller seats that are integrated
in the vehicles are mostly imported from Japan to maintain good quality standards. The
outbound logistics include the outcomes of the production process and ensuring that the
finished products are delivered to clients. A large group of contracts are formed consisting of
outbound services’ providers, which included ten shipping lines and multiple providers at
VDC and few of them for the transportation by land with the use of trucks (Martínez-Jurado
& Moyano-Fuentes, 2014).
The MTS or make to stock planning has allowed the company to remain predictable
in terms of production and delivery of products and services though considering the
feasibility of product to sustain in the future. The availability of products in the stocks is
essential for ensuring that the sales order placed by them can be facilitated through inventory
management and kept the customer lead time to minimum as well. The MTO or market to
order production enabled identification of the product to be ordered and then checking the
availability of product in stocks and thus the company made sure to keep abundant supply of

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product to ensure that in case of customer request, there is no freely available stock needed to
fulfil the order is found anyhow (Fredendall & Hill, 2016). The ATO has further helped in
reducing the waste generation and managed better speed of business manufacturing and
production too.
Figure: Product process matrix (Fredendall & Hill, 2016)
The operational logistics at Toyota are aligned with the business strategies to manage
both the departments of manufacturing and production, furthermore assisting the organisation
to ensure internal control of transportation, manage operations for the plant docks and
handling the containers that are empty as well. The entire setup with the management of TPS
further managed integration between the manufacturing and supply chain management and
allowing the operations and processes to run or function at each plant consistently. Due to
thus, another competitive priority, i.e., the production was controlled by departments to
handle the truckload and delivered the products and services along with management of
outsourcing those to the providers of logistics services too (Golicic & Smith, 2013).

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Two significant risks of supply chain
One of the major risks of supply chain was faced after the earthquake in Japan at the
year 2011. The earthquake and tsunami resulted in making manufacturing units offline and
this further affected the assembly lines, resulting in shutting down the business operations,
which ultimately decreased the overall production too by more than 30 percent. The ERP
systems must possess poor functionality that might affect the automation of processes and
create supply chain risks, thus affecting both production and quality too (Toyota.ca, 2019).
Conclusion
Considering the supply chain management, the flow of goods and services along with
storage and retrieval of raw materials and resources along with management of inventories
and finally delivering the finished goods to the point of consumption should be important for
Toyota Canada. The order winners were cost, quality and efficiency, which were also
sometimes considered as order qualifiers for allowing the company to focus on managing the
logistics, both inbound and outbound operations properly, thereby aiming to improve the
supply chain consistently all throughout. The suppliers were managed good relationships with
along with consideration of MTS, MTO and ATO to ensure successful business functioning
at Toyota too.

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References
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.
Fredendall, L. D., & Hill, E. (2016). Basics of supply chain management. CRC Press.
Golicic, S. L., & Smith, C. D. (2013). A meta‐analysis of environmentally sustainable supply
chain management practices and firm performance. Journal of supply chain
management, 49(2), 78-95.
Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.
Jacobs, F. R., Chase, R. B., & Lummus, R. R. (2014). Operations and supply chain
management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Mangan, J., Lalwani, C., & Lalwani, C. L. (2016). Global logistics and supply chain
management. John Wiley & Sons.
Martínez-Jurado, P. J., & Moyano-Fuentes, J. (2014). Lean management, supply chain
management and sustainability: a literature review. Journal of Cleaner Production,
85, 134-150.
Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing
and supply chain management. Cengage Learning.
Seuring, S. (2013). A review of modeling approaches for sustainable supply chain
management. Decision support systems, 54(4), 1513-1520.
Toyota.ca. (2019). Retrieved from https://www.toyota.ca
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A
balanced approach. Cengage Learning.