Toyota's Production, Logistics and Supply Chain Management Analysis

This essay provides a comprehensive analysis of Toyota's production, logistics, and supply chain management, highlighting the company's strategies and processes. It begins by emphasizing the importance of logistics and supply chain management for gaining a competitive advantage, particularly in the automotive industry. The essay then focuses on Toyota, the world's largest automotive manufacturer, and examines its production system, categorized into six mechanisms, including social processes and forms of standardization. The analysis delves into Toyota's product development process, including design stages and management principles. It explores both inbound and outbound logistics, detailing how Toyota manages its suppliers, distribution channels, and dealer networks. The essay also touches on the 'Toyota Way' principles and various factors critical to logistical performance. The study emphasizes Toyota's commitment to lean manufacturing and its integrated socio-technical system, offering insights into the company's success in the global automotive market.

Understanding
Operations, Logistics
and Supply Chain
Management

According to Rushton, Croucher and Baker (2014), Organisations adopts various
business methods so that they can improve their performance concerned with the businesses. It
can be said that logistics and supply chain management is considered one of crucial factors for
the organisation if they have to gain competitive advantage over their rivals. In the modern era
companies are lots of efforts in making sure that their products reaches to the suppliers in time
thus ensuring that there are no more hurdles in between. It is the duty of the management to
make sure that they manages and handles the supply chain process with proper care through
adopting certain strategies and time frameworks . This all essay will be highlighting the two key
aspects which includes production and logistics mixes. For this Toyota has been selected which
is the world's largest automotive producer and it is their efforts which has made them the world
leader in car market. Many organisation adopts their product development process due to its
flexibility and effectiveness. There will be use various methods and process to make the process
easier thus ensuring that the resources available with them are used in better way.
As stated by Christopher (2016), Toyota is a Japanese multinational automotive
manufacturer and is considered as world's largest automotive manufacturer. This is the company
which is recognized as an industry leader in manufacturing and production. It is analysed that its
production process does not fully match with Japanese product development model. They had
been successful in maintaining a functionally based company thus achieving impressive degree
of integration and it can be said that most of these practices are same as the those adopted by US
organisation. Managing the production system of Toyota can be categorised into six mechanisms
and out of which three are primarily social processes i.e., mutual adjustments, close supervision
and integrative leadership from product heads. The rest of three are forms of standardization thus
including standard skills, standard work processes and design standards. Each of them have its
own role in the whole production system. They ensure that a highly formalized system with little
twists to ensure that each projects is flexible and benefits other projects.
Monczka and et. al., (2015) analysed that there is coordination through the personal face
to face interaction like a product designer and a manufacturing engineer come together to
analysis the effects that a design which is proposed for the new car will have on the cost of
manufacturing. To ensure that there meetings does not cost them much and they does not
consume much time on this so they have made sure that in a functional area there are people who
are expert in different fields. To make sure that there is no regular meetings so they ask the

concerned authority about the information regarding their views, suggestions, problems and
process to the other concerned party.
Twist: Although they focus on written communication but they does not make use much
paper gives each and every engineers and supervisor a formal training thus making the structure
of report format same. This way no much time is consumed and everyone is aware what the other
department is doing.
Diabat and Govindan (2011) gave the process of product development supervision takes
place in individual functions. Like the electric engineers will be supervised by an electric
engineer as he is well know all the functions which is involved. The engineers who has
experiences of less than ten years needs to take the permission of their functional supervisor for
the designs they propose.
Toyota has set a chief engineer and each of them is based in one of Toyota's three vehicle
development centres. They have the duty to look at the single vehicle program. To ensure that a
good designer analyse the quality of vehicle they make sure that the project manager have the
technical expertise. They have to look at the brake system design and then conceptualize with the
implementation of the system in real car. There are 5 to 15 engineers who help the chief
engineers in handling and managing the all development process.
It is the duty of the chief engineer to design the whole process of product development
thus it can be said that they set the blue print for the entire program which is going to be
presented (Hugos, 2011). The process which consists of dimensions of the vehicle, decisions on
various systems, the kind of model which has to be made, features of the customers needs, cost
of the car, fuel economy and etc. They briefs that how the inputs will be interacting so that they
can come out with a final product. After the whole approach then the technical details are needs
to be integrated with the concept of vehicle.
Engineers prepares a checklists which include different regulations made by government,
manufacturability, reliability and different areas which has to be tested. They check the audio
speakers along with the door sizes and its components and these are used to fit the speakers.
They are able to bring the new products quite easily as this was seen with launch of RAV4 mini
sport utility vehicle which was just came in 2 years (Wolf, 2011).

Above all process is integrated sop that they can cone out with the best car which fulfil
the required of the niche market. In the production process of Toyota design holds key position
and can goes through 5 stages that are as follows:-
The car design is the procedure which initiates with concept designing concept. The
designers analyse the trends, their own ideas, various factors and the customer needs in this
process. They discuss on the design which can be sketched on the sheets and further sketches the
concept.
All the sketches are now a days are drawn on the personal computers thus playing a
important role in giving the sketch more realistic look (Flynn, Huo and Zhao, 2010). They gives
it the 3D shape and for that they work on minute details thus transferring the image in lines and
surfaces. It is needed that the sketch should be creative.
This includes 2 colour development that is exterior and interior colour development. It
can be defined as important feature of a vehicle and requires that there should be colour
coordination. They analyse that what colours are trendy in the fashion and interior design around
the world.
The interior colour of the instrumental panel, steering wheel, seat fabric, ceiling, carpet
and other interior fittings are made also decided the colour (Stadtler, 2015). They ensure that it
should be attractive and should give best impression.
It includes the 3D modelling with the help of clay and the designer checks the finished
lines and surfaces of the model giving it a right shape. A right model cannot be made till there
adoption of the united approach. A interior wooden Mock-up tool is used and other than this
metal, fabrics and a various materials are used to create a full size model.
It can be said that modeler's work needs an expertise and skilled worker as they improves
all the features of a craft. The person can be trained in this but it is required that the rest work has
to be done alone.
It is the final stage in the designing process and here things are analysed through the
customer angle. The viewing of the vehicles takes place in natural light (Carter and Liane
Easton, 2011).
There are several management principles of Toyota's Product Development System:-
 Use effective tools for standardization and company learning;
 Contribute and align the operations with a written communication;

 Set consumer defined value to separate values added activity from waste;
 Create a leveled product development process flow;
 Bring a culture in order to support excellence and relentless improvement.
It is an integrated socio technical system which was given by Toyota. It includes certain
management philosophy and practices. This organises manufacturing and logistics for the auto
mobile producer thus making relation with the customers and suppliers. This can be also called
as the lean manufacturing process (Sarkis, 2012).
Toyota gets raw materials as they does not manufacture or own them thus they take it
from the third party and hand the small parts like leather seats, steering wheel, tire, to local firms.
But in the case where the machinery is concerned they import from Japan so that they can
maintain the quality which Toyota build far back.
It can be analysed that supply chain and production planning duties are allocated across
Toyota's purchasing, manufacturing and logistics management than at OEMs with integrated
supply chain management companies (Mangan and Lalwani, 2016). The production management
teams shares the requirements of the parts which has to be ordered and for that they share it with
the logistic department. This is all part of the inbound logistics.
Outbound logistics referred to the outcome of the production process in the form of a
complete vehicle thus it can be said that it is a finished goods. After this the manufactured cars
are sent to the either local or a region which tit will move. TME contracts a large group of
outbound facilities providers thus using the ten shipping lines, ten providers at VDC and 45
partners for land and for this mostly trucks are preferred (Pettit, Fiksel and Croxton, 2010). If it
is analysed on the global level it can be said that they have contract with 55 organisations and
just 7 for inbound. Most of the VDCs overlap with the land transport. Although they contract
with more companies but the local production delivers in most of the nations. Like in Russia,
where deliver the vehicles to the ports of entry and from there Toyota Motor Russia (TMR) have
all the responsibility for the domestic distribution.
They have set the suppliers into the functional tiers that is first and second tiers. The first
tier worked in a vehicle development team and in second tier they produce individual parts. They
try to encourage cooperation and communication among the first tier suppliers. Toyota try to
send the workers top the suppliers so that they can handle the workload. After the production
smoothing enables suppliers to maintain a right volume of business (Prajogo and Olhager,

2012). Thus Toyota try to maintain a relationship with their suppliers and for this they adopt the
concept of team work.
There are several factors which are key to the logistic performance that includes
packaging and many more. They ensure that they have the right size box and gives the right
transportation services. It tries to adopt a single route and analysis it on regular basis so that there
is no hurdles come in between. For the better performance the vehicles should reach on time at
all the connection points (Gligor and Holcomb, 2012). The capacity of the route is also one of
the element which impacts the decision making for the logistic.
In Japan, Toyota's sales and marketing functions are categorized into four distribution
channels that are as follows:-
 Toyota (mostly high end, large cars)
 Toyopet (medium size)
 Toyota Corolla (compact)
 Netz Toyota (compact)
In all, Toyota provides approx. 60 car models and each of the channel offers only 15-25 models.
The dealers of Toyota in all have almost 5000 outlets with 120000 staff.
This can be said that each of the dealer can have deep knowledge of all the models which they
are selling. He should give his full support and effort to make sure that he sells the models
allotted to him instead of selling the few models which has more profit margin (Gold, Seuring
and Beske, 2010). To manage and handle the dealers Toyota adopts the “Toyota Way” to
manage dealers based on the basic principles that are as follows:-
 They give dealers the choice of making independent decisions;
 On behalf of dealers Toyota can help them in investing into certain valid things to
improve;
 Both dealers and Toyota must prosper jointly.
They adopts the concept of working with one distribution in each nation and they markets their
cars in almost 170 nations with the help of their overseas network including more than 160
imports per distributors and there are lots of dealers (Seuring, 2013).
Cars are sent to the Marshaling Yard which is warehouses and normally when the
assembling is completed then it completed.
Inventory:- For this they adopts 'Just in Time' method which is a inventory method.

Just in Time Method helps them in ensuring that they makes only those things which are
required and they produce in limited numbers only. For Toyota they produce a plan which
consists of the requirements of the vehicles and time of delivery.
Transport:- For transportation normally they use trucks and for the international export
they use ships and flights etc.
It can be recommended that logistic and supply chain issue has to be properly managed
by organisation like Toyota as this will make sure that they fulfil the demands which is coming
from the market. To ensure that they get the raw materials and machinery from the supplier on
they have to analyse the background of the company from which they are dealing with. To know
the customer preference they have to analyse the market segment which they are targeting but it
becomes little difficult and tough as there is increase in the population and decrease in the
economic. For this they can use social media platform to know the marketing trends which is
also an inexpensive method. As part of their In time production process or the lean
manufacturing they should also produce the products through adopting different production
process. It is recommended that they should take the help of the other small scale car
manufacturing organisation so that they can deliver the cars to the customers in time.
From the above report it can be analysed that operations, logistics and supply chain
management has to do with the administration of the business practices with the aim of creating
better business and efficiency at the workplace so that maxim output can be gained from this.
Firms has to managing almost all the activities which are part of the production process so that
they can reduce the cost and make sure that the resources are used in better way without wasting.
Toyota is an organisation which is from the automotive manufacturing segment and they have
made their mark in becoming the top player of the industry. Most of the organisation in the world
adopt their system of production as they has been managed all the activities with certain
strategies.

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Online
The 13 Management Principles of Toyota's Product Development System. 2006. [Online].
Available through: <http://www.industryweek.com/companies-amp-executives/13-
management-principles-toyotas-product-development-system>.