Comprehensive Report: Toyota's Logistics and Supply Chain Strategies

This report provides a comprehensive analysis of Toyota's logistics and supply chain management. It begins with an introduction to Toyota, a leading automotive manufacturer, and highlights the importance of operational management and supply chain functions. The report then delves into the application of Total Quality Management (TQM) principles, exploring its eight key elements and their relevance to improving product quality and customer satisfaction. A critical analysis comparing Ford and Toyota's TQM strategies is presented, followed by an examination of system theory in managing innovation and new product development processes. The report also discusses the significance of lean strategies, supplier partnerships, and the integration of various management approaches. Finally, it explores the triple bottom line theory, emphasizing the importance of considering social, environmental, and financial aspects in evaluating organizational performance and sustainability. This report provides a detailed overview of Toyota's strategies and practices within its logistics and supply chain operations.

UNDERSTANDING
LOGISTICS AND SUPPLY
CHAIN

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Introduction of company with two chosen topics...................................................................1
Corresponding theories and concepts.....................................................................................2
Critical analysis between Ford and Toyota in comparison to total quality management.......3
Second corresponding theories and concept-...................................................................................5
Triple bottom theory- ............................................................................................................6
RECOMMENDATION- .......................................................................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Operational management includes the transformation of inputs (raw materials, labour,
capital)into output (final product) effectively and efficiently which is than valued by the
customers, logistics are the important functions through which market requirements can be
fulfilled quickly and flexibly which means logistics is the management of flow of the goods from
the point of origin to the point of its consumption to satisfy the needs and wants of the customers
(Ross, 2017). The company needs to mange the all operations and logistics internally and
externally both across all their supply chains. Operational management is basically planning,
Organising, and supervising of the production function to provide efficient services and goods to
the consumers it focused on the successful transformation of inputs into outputs in n effective
and efficient manner. Supply chain mainly focus on the product planning that consumers want to
buy, sources of the raw materials, parts, transporting the goods from warehouses, and delivering
the goods at the place of purchase. Basically, supply chain focuses externally.
Toyota motor corporation is a Japanese multinational company which is headquartered in
Japan. This is the world's sixth largest company in terms of revenue. Company is having the
employees staff of 364,445 employees. It is the world's second largest manufacturer of
automotive
The report will cover the different theories for different stages of production like total Quality
management for the quality and the triple bottom line for economic, social, environmental
approaches and considerations for evaluating the performance of organisation towards the social
responsibility and its sustainability.
Introduction of company with two chosen topics
For the present report selected entity is Toyota which is a multinational Japanese
automotive manufacturing company. It is the world second the largest manufacturer in
automotive sector which mainly produce more than 10 million vehicle per year. It has been
found that automotive sectors are mainly experiencing a problem related to product defects
through wear in machines because of which lack in productivity gets developed. This issue has
also been faced by the Toyota entity and thus to improve such management, entity focuses in
following principles of Total quality management (What makes Toyota World famous auto
maker, 2019). For the present report two main areas which has been selected for logistic and
1

supply chain are managing quality and new product and service development process. Currently,
Toyota is entered in the service of providing automatic car and that is why entity is focusing on
concepts and philosophies through which new product and services will get developed with
appropriate management of quality.
Corresponding theories and concepts
In order to improve manage the quality of goods and services Toyota organisation will
follow the concept of Total Quality Management (TQM) principles. It stands for managing the
quality of goods through appropriate management. It is a type of management approach in order
to achieve long term success with appropriate strategies so that customer gets satisfied. In this
theory of concept all members of organisation will provide their contribution in order to improve
processes, products, services and work culture. Here are its main 8 elements:
Customer-focused:
It is true that customers will only determine the type of quality provided in goods and
services of the customer (What is Total Quality Management, 2019). They did not have interest
in analysing what strategies entity is following in order to improve their services. At the end
customer only wants worthwhile efforts.
Total employee involvement:
This is the concept which emphasis on contribution of all the employees towards a one
common goal. Contribution of employee will only get achieved when entity will provide them
proper safe and secure working condition (Yusr, 2016). Therefore, Toyota entity must have to
develop strategies like high performance work system so that organisational objectives get
achieved.
Process-centred:
This is another step under which entity will have to focus on process thinking. It is
considered as series of step where input from supplier has been taken to transform them into the
final goods which will further be delivered to customers. Through this process, Toyota will able
to carry put effective process with appropriate monitoring in order to avoid any unexpected
variation.
Integrated system:
It is the process which consist of different functional specialists in order to focus on the
total quality management (Ross, 2017). Through this step, leader will able to provide clear
2

understanding of vision, mission and with appropriate guiding principles. Through this process,
Toyota will able to connect the business environment elements which will continuously improve
and fulfils the expectations of the customers, employees and other stakeholders too.
Strategic and systematic approach:
It is the process through which entity will able to create a strategy through which
organisation's mission, vision and goals will get achieved through proper planning and
management which main emphasis is to integrate quality as a core component.
Continual improvement:
This is the large aspect which mainly focuses on the continual improvement process
(Toma and Naruo, 2017). It will help Toyota organisation be able to both analytical and creative
so that more ways will get found in become competitive and effective.
Fact-based decision making:
In order to know performance of the organisation, Toyota must have to focus on data
measurement. TQM is the process which require continuous collection and analysis of data for
developing accurate decision.
Communication:
In order to achieve goals as per the strategy, effective communication plays an important
role by which employee morale and motivation gets increases at all level.
Critical analysis between Ford and Toyota in comparison to total quality management
Ford Motors Toyota
Company's TQM strategies started in 1980
with the slogan “quality is Job 1”. in order to
develop process more improved, entity is
working with the Wayne state university in
Detroit in order to become black belts in six
sigma.
It has been found that automotive sectors are
mainly experiencing a problem related to
product defects through wear in machines
because of which lack in productivity gets
developed. Toyota entity also faces this issue
(Prajogo and Cooper, 2017).
Entity's TQM strategies are based in the
improvement methodology so that customer
will get satisfied and the quality driven process
was set by the management of entity.
Therefore, entity has assign the principles of
TQM where in its first step management of
company has stooped moving in and around
the employees and assigned them with
3

responsibility in order to prevent further
practice of wearing down the machine.
According to the insider press release, it has
been found that principle of TQM was
forefront in their painting design process so
that entity will able to satisfy quality needs of
the customers (Kiran, 2016). Management of
the company now formulating basic
management principles through establishment
of loyalty so that goods and services will get
enhanced.
Company also has assigned the responsibility
to human resource department through which
effective communication will take places with
the employees and company will further able
to get the success in the market.
Currently, entity wanted to develop the
realistic economic goals through downsize the
corporation. This will help entity to reduce the
business operations to an appropriate size
which will be easy in managing the customer
more efficiently and effectively.
Through customer-oriented philosophy entity
will able to improve its production system
which provides effective principles so that day-
to-day business operations will get improved.
4

Second corresponding theories and concept-
Managing innovation is challenge for the auto mobile industry as they need to cope up
with complexity presents within market (Yusr, 2016). By having improvement in systematic
process for such management strategy is one of the main goal of firm that aids to bring
competitive advantage. In context to improve new product and development process the entity
must have the use of System theory as it put their major consideration over factors as people,
care the customer, constant innovation and leadership. Thus, it can be stated that speed of new
product introduction is cumulative capabilities of firm and supply chain department plays the
crucial role in order to bring improvement in manufacturing process. In this term, it can be stated
that integrated management philosophy mainly supports the competitive advantage that aids to
highlights the continuous improvement. Thus, key parameters of competitive advantage are
defined in below contexted manner as-
Cost quality Delivery Flexibility
 Reduction in
stock
 Enhancement
in capacity of
utilization
 low cost of
production
 Raised labour
productivity.
 To avail high
performance
commodities
 Provide
consistent,
reliable quality.
 By providing
fast deliveries.
 To meet
delivery
promises
 Reduction in
production lead
time.
 Bring rapid
changes in
design.
 To have the
rapid volume
changes
 To bring
adjustment in
product mix.
In new product development the role of system theory plays greater role as it allows to
have an investigation that focus on lean. Thus, it can be stated that lack of research in product
design has negative influence over automotive industry. In order to overcome from it, it must be
ensure the long term competitive advantage of company and it must be part of product
development process in early stage. The suppliers to the Toyota plays crucial role as they help
the firm in number of aforementioned factors (Toma and Naruo, 2017). Herein, they play
foremost role in order to have significant contribution for competitive advantage. Thus, there are
5

number of core principles given in lean strategy that are as to identify the elimination of waste,
pursuing continuous improvement, supplier partnership, mix model production etc. the approach
as six sigma can also be helpful in order to observed the different development practices. In this
process, lean is termed out as differed set of tools and this must be adopted in order to have
different development and interpretation by adoption of lean. The enterprise need to put ficus
over the customers, employers and suppliers so that better productivity can be taken. In addition
to this, it can be said that with enhancement in global competition the need of product innovation
became very crucial aspect. Thus, it also demands frequent innovation and shortage of
development cycles. In order to conduct the working effectively, it is essential to put major focus
over following eight steps as-
 Customer orientation
 Leadership process
 Involvement of people
 System oriented management approach
 Continuous improvement
In order to bring development in the overall process, it is essential to consider the major
points as quality, cost and all other kind of parameters. In order to reach it the firm needs to bring
the better and effective innovation with help of adopting the process as continuous improvement.
By analysing needs and wants of customers, it can be possible to bring large amount of
modification within the enterprise. In this, it can be stated that Toyota has developed new
concept in term to supplier involvement and this provides benefits from both kind of innovative
features and faster launches of product and services. In this term it can be said that the positive
impacts of supplier and customer involvement aids to conduct the overall operations effectively.
Triple bottom theory-
This is theory that defined as an accounting framework and gives major focus over three
aspects as social, environmental and financial. Thus, entity as Toyota needs to adopted it in order
to having better evaluation of performance in broader perspective to create and enhance value to
business. It is helpful to determine the financial return, social impact and environmental
responsibilities of companies. IN addition to this, it is stated that triple bottom line defined the
economic, environmental and social value of investment in terms to the sustainable development.
6

Furthermore, it can be stated that the success and profitability of corporate sustainability depends
on theory to reality. Under this, employees must be specialized of knowledge in terms to
environment science, accounting and economies. Thus, it aids to measure the following as-
 Social sustainability- This is term that aids to measure business profits in terms to
human capital and position within local society. By having fair and beneficial labour
practices the firm can perform its activities effectively.
Illustration 1: Triple bottom line
(Source: Sustainability Management System: The Triple Bottom
Line, 2019 )
 Environmental sustainability- This aids to determine the various impact on term as
natural resource that can affect the brand image of enterprise. In addition to it, controlling
the environment bottom line means to deal with all functions as managing, monitoring,
and reporting your consumption and waste and emissions
 Economical sustainability- It is used to measure the economic environment of business.
Thus, Toyota taken initiatives to strengthen their economic environment so that they can
able to get success in future as well.
RECOMMENDATION-
 The Toyota company should use efficient and updated technology to maintain the quality
of its product. The company should use software to collect the data of customers
7

demanding warranties and guarantees and products that they are receiving in a damage
form and company should make the list of suppliers who deceived the company and
should make a note of them and should not purchase products from them.
 By using system theory of approach a company can continuously improve in its field
whether its product, or marketing strategies etc. The company to reach vast range of
customers should use social media platforms for promoting its product. It should improve
its products by updating GPS trekkers and by installing car talk which enable cars to talk
from each other and make them know about the weather conditions etc. which decreases
the chances of accidents and customers stay safe.
 By using TOM theory the Toyota company should focus on creating quality and
innovation all together. The company should bring innovations in the field of looks,
performance etc. Toyota should use artificial intelligence in its product to attract the
customers and to provide them with all innovative experience.
 The company should use advanced data analysis so that operations of company can take
place effectively and efficiently. The company should create a suggestion box on online
platforms where it can see the suggestions of the customers and can take that into
consideration and can improve and upgrade its product and can have satisfied customer.
CONCLUSION
Hereby, it can be concluded that operation management aids to create the highest level of
business efficiencies within the enterprise. This is term that is concerned with conversion of ram
material into semi finished goods.
Thus, present report cover the business activities of Toyota, it is auto-mobile industry
focussing over concepts and philosophies through which new product and services will get
developed with appropriate management of quality.
Furthermore, the report has covered the theories as TQM so with help of it it can be
possible to manage quality in working practices and system theory has been used to develop
innovation. Lastly, recommendation has been given in order to brin more effective services to
enterprise.
8

REFERENCES
Books and Journals
Kiran, D.R., 2016. Total quality management: Key concepts and case studies. Butterworth-
Heinemann.
Prajogo, D.I. and Cooper, B., 2017. The individual and organizational level effects of TQM
practices on job satisfaction. International Journal of Manpower. 38(2). pp.215-225.
Ross, J.E., 2017. Total quality management: Text, cases, and readings. Routledge.
Toma, S.G. and Naruo, S., 2017. Total quality management and business excellence: the best
practices at Toyota Motor Corporation. Amfiteatru Economic Journal. 19(45). pp.566-580.
Yusr, M.M., 2016. Innovation capability and its role in enhancing the relationship between TQM
practices and innovation performance. Journal of Open Innovation: Technology, Market,
and Complexity. 2(1). p.6.
Online
What is Total Quality Management. 2019. [Online]. Available through <https://asq.org/quality-
resources/total-quality-management>
What makes Toyota World famous auto maker. 2019.[Online]. Available through
<https://jctjapan.wordpress.com/what-makes-toyota-world-famous-automaker/>
Sustainability Management System: The Triple Bottom Line. 2019[Online]. Available through
<https://www.era-environmental.com/blog/sustainability-management-triple-bottom-line>.
9