Research Paper on the Practices of a Local and

International Manufacturing Company

I. Introduction
The competition among manufacturing companies forces them continually
seek for improvements to achieve and keep place in the market. Business
companies over the world adopt numerous logistical improvement methodologies to
improve their business performance. Logistics as well as supply chain management
has been regarded to be the vital factor for the companies to obtain competitive
edge.
Logistics is the management of the flow of goods between the point of origin
and the point of consumption in order to meet some requirements, for example, of
customers or corporations. The resources managed in logistics can include physical
items, such as food, materials, animals, equipment, and liquids, as well as abstract
items, such as time, information, particles, and energy. The logistics of physical
items usually involves the integration of information flow, material handling,
production, packaging, inventory, transportation, warehousing, and often security.
The complexity of logistics can be modeled, analyzed, visualized, and optimized by
dedicated simulation software. The minimization of the use of resources is a
common motivation in logistics for import and export (Li, 2014).
According to ASLOG (Brazilian Association of Logistics), the logistics concept
is defined as "the process of planning, implementing and controlling efficiently, the
correct cost, the flow, and storage of raw materials, stock during production and
finished products, from the point of origin to the final consumer, in order to meet
customer requirements." FILHO (2001 p. 26). The inbound and outbound logistics
management systems are two important activities and processes that manufacturing
companies should be adopted to improve business performance. These systems
share common activities or process, since both involve decisions related to
transportation, warehousing, materials handling, inventory management and control,
and packaging, as well as some other activities.
In this research paper, the researcher attempts to determine the practices of
both local and international manufacturing companies relative to current inbound
logistics material management and outbound logistics distribution and finished goods
warehousing.
II. Inbound and Outbound Logistics Material Management of the International
Manufacturing Companies

Inbound logistics Material Management refers to activities of receiving,

storing, and disseminating incoming goods or material for use. It includes the
procurement or purchasing and the related materials management activities since it
comprises all the steps of an external procurement process that occur when the
goods are received.
Inbound logistics system is the management of goods and materials which
are arriving at the business premises. This system ensures that material received
and related information are processed and made available promptly to production,
store and other department. It provides completely and accurately document goods
received and goods returned. It accepts items that were properly ordered and that
meet purchase order specification. Safeguard goods received. It ensures that
vendor, inventory and purchase order information is accurately updated to reflect
receipt. It returns rejected items promptly. This system provides completely and
accurately document all transfer to and from storage. It properly transfers all
materials requisitioned and maintain safe working conditions and storage of
hazardous materials (Adhikary et.al., 2018). It is the opposite of outbound logistics.
Outbound logistics is concerned with the storage of the finished product and dispatch
to customers.
One among the best practices on Logistics System of the manufacturing
companies in the international arena is the Toyota Inbound and Outbound Logistics
Operations (internationalbusinessreview.blogspot.com, 2015).

Toyota Logistics Operation

As a backgrounder, Kiichiro Toyoda was the founder of Toyota Motor
Corporation and the automotive-centred Toyota Group. Kiichiro was a keen, skillful
inventor and the continuous resolve of invention helped him to create the business
base acquired from his father, Sakichi Toyoda. With the incessant drive towards
innovation and invention, Kiichiro extended into the automotive business and build
the groundwork of Toyota Group that you see today. In 2008, Toyota's sales
surpassed General Motors, making Toyota number one in the world. In 2010, Toyota
employed 350,005 people worldwide, and was ranked the third-largest automobile
manufacturer in 2011 in terms of production, behind General
Motors and Volkswagen Group . Toyota is also ranked as the eleventh-largest
company in the world by revenue. In July 2012, the company reported it had
manufactured its 200-millionth vehicle (www.wikipedia.com).
In order to mandate the achievement of such a high level of production and
demand for vehicles, the company has established different long-term strategies,
integrated corporate philosophies that help to set a balance on the demand and
quantity of the products. In addition, continuous improvement of communications
with its partners in order to rake in investments and find the competitive advantage
that aids Toyota to constantly meet customer expectations. Moreover, these
strategies involve the use of enhanced technologies that help to ensure quality and
safety of the products. The mission of Toyota Motors is the provision of the best
qualified service and products as well as cooperation with dealers. “Since its
foundation, Toyota has been using its guiding principles to produce reliable vehicles
and sustainable development of society by employing innovative and high quality
products and services”.

Inbound logistics System

The main aspect of Toyota Company’s value chain analysis is the inbound
logistics. Inbound logistics use JIT (Just-in-Time) system of production as it
decreases the inventory cost. JIT helps Toyota to optimize their assembling and
production process as well as to minimize parts going to waste or getting unused as
inventory. Inbound logistics are the goods that the company receives from its
suppliers and store for some period of time until the moment when they will be used
in the production process. Toyota company does not have and is not able to create
own raw materials that are needed for assembling of cars, thus it has to collaborate
with a third party. Toyota orders the raw materials from all over the world and in the
interest of maximizing their availability of raw materials; they maintain good
relationships with their suppliers. Toyota uses Just-in-Time system to manage the
supply of raw materials as well as optimizing the supply and production processes.
These activities comprise mainly of the manufacturing and assembling
process of the motor vehicles. Other activities in the operations may include motor
tuning, configuration of motor parts and final engine tuning. Toyota Motors have
established and maintained the image of producing reliable and long lasting vehicles
largely due to their well-designed and moderated operation process. One of the main
factors of Toyota’s successful sales record is credited to their comprehensive
implementation of an exquisitely planned operation system.
Toyota Production System (TPS) is an operation structure followed, which
consists of the integration of the lean production concept and Just-In-Time (JIT)
management, controls the production process in accordance with the customer
requirements. Other operation activities also include the ‘Jidoka’ system; which stops
the production process if any defects or other operational problems occur.
Operational constancy is also a part of TPS and consists of ‘Heijunka’ concept which
focuses on the uniform distribution of work at any position of the production process;
Work Organization focusing on the accurate distribution of tasks in the correct order
and description; and Total Productive Maintenance (TPM) which emphasizes on
overall check-up of all equipment and tools used in the production process.

Outbound Logistics
 On completion of the operation process, final products are transferred to the
retailers, wholesalers and, ultimately, to the final customers. Toyota controls the
whole process of vehicles distribution, from the factory to  their branches worldwide,
to ensure that the final products are delivered in the right place at the right time.
Each Toyota dealer is directly linked and controlled by Toyota, with few or no
subsidiaries involved in the   distribution process. Outbound logistics of finished
vehicles are the responsibility of Toyota Motor Sales. Parts Distribution manages the
supply of service parts from the plant to the service centre. It supports service parts
production and shipping preparation which includes containerization and overseas
shipping. This group is also responsible for quality, technical support and overseas
logistics and customs.

Marketing and Sales

 In these activities, Toyota’s marketing department assigns new products to
the precise group of targeted customers. Marketing and sales activities of Toyota
also include emphasis of on their planned promotion mix and  marketing
communication approaches, like advertising and sales promotions, as well as
building groundwork f or offers that would be suitable for meeting the customer
expectations and the company as well.
 Services
Services are the final aspect of the primary activities that mainly adds value to
the products and ensures successful distribution as well as obtaining feedback and
response from the customers. This includes all areas of service such as final
checking, after-sales service, maintenance, complaints handling, training, repair
services and additional customer services. Toyota recognizes that its customers are
the “driver” of the company’s success, thus it provides and improve several types of
their offered services. As Toyota product’s main factor is reliability, therefore services
are delivered by qualified personnel ensuring all services provided are of high
quality. The importance of perfection ensures service excellence and more satisfied
customers as well as sustaining a greater competitive advantage.

Support Activities

Procurement
These activities are associated with the purchase of goods, materials,
equipment and services, and focus on reducing the cost on purchases and receiving
them on the assigned time. Toyota Motors uses e-buying and outsourcing methods
to manage procurement activities. Furthermore, in collaboration with its suppliers,
Toyota supports the reduction of environmental pollution that occurs during the
delivery of supplies.

Technological Development
These activities are the integration of constantly developing technologies in
the processes used and help to create and maintain their competitive advantage.
Every department of Toyota is build up on technologies; the main focus on
technology development is to guarantee the customers of the safety of the vehicles.
Toyota Motors combine forces with Collaborative Safety Research Centre located in
U.S.A to reform safety checks of the vehicles and improvised test-drives as well as
improving their overall product performance. Toyota has integrated safety
technological systems that are aimed to provide safety of the drivers and vehicles.
The first technology is PCS (Pre-Crash Safety) system that helps to predict possible
crash and thereby minimizes the risk of damage and injuries. Pop-Up Bonnet
technology is a definite design of the car frame structures that was created by
Toyota Motors to avoid the damage caused to other vehicles and the pedestrians.
Adaptive Driving Beam system was assimilated in some models of Toyota cars and
helps to regulate high beam in automatic way.

Human Resource Department

It is the important part of the whole organizational business and thus Toyota
Indus Motors Co. uses different tactics to sustain its employees. Other car
manufacturing companies are considered as producers of high quality cars, however
they cannot compete with Toyota in HRM (Human Resource Management), as well
as its suppliers and methods of distribution. Toyota has a highly integrated Lean
Production System in order to use the workforce in more productive and efficient
way. The main concept of managing human resource is to expand the capacity and
capability of the employees by providing them a material encouragement for the
extra work, training to develop their working skills and various rewards. These
methods lead to friendly and comfortable working atmosphere in the company that in
turn increase in productivity and quality of the product and results in creating of
the competitive advantage.

Firm Infrastructure
These activities are connected with developing the strategic plans of the
organization. MIS (Management Information System) plays a vital role in designing
the strategic plan, organizing and controlling the various departments of Toyota such
as finance, accounting and corporate strategy. Moreover, Toyota uses robotics
system where people act as operators that make the production process fast and
efficient.
 Toyota's Value Chain Model

III. Inbound and Outbound Logistics Material Management of the Local

Manufacturing Companies

Like many other countries, the Philippines has made a substantial contribution
to businesses in terms of logistics management system over the years. Today, a
number of companies such as Coca Cola Company has attained competitive
advantage through an improved management of its supply chain and its logistics
management system.
Coca Cola's strategy is emphasized on excellence in logistics; sourcing
material management and physical distribution relative to the production location.
Coca cola relies on imported componentized parts from a wide range of suppliers in
different countries to produce its products and assemble it in another country. The
thrust behind the logistics and supply chain activities has been the transportation
industries culminating globalization.
The company is one of the most recognizable brands globally including the
Philippines. However, creating such a large and successful brand also requires
managing the value chain successfully. A value chain includes all the activities
starting from obtaining the raw materials from various sources to the final sales and
after sales service. There are several activities in the middle which form the value
chain. The concept of value chain analysis was introduced by Professor Michael E
Porter of Harvard Business School. Managers can obtain a picture of how each
stage in the value chain adds value to the product and accordingly optimize the
value chain to obtain better results. Optimization will not just bring efficiency but it
can also generate new sources of competitive advantage.

Inbound Logistics
Coca Cola has managed a very large supply chain which consists of tens of
thousands of farmers and suppliers. It treats its suppliers as business partners. 
These business partners provide its system with raw material including ingredients,
packaging and machinery as well as goods and services.  However, it has also set
guiding principles for the suppliers to follow. At a minimum these suppliers are
required to comply with all the applicable laws and regulations. In its guidelines Coca
cola also emphasizes on responsible environmental and workplace policies and
practices. It has managed excellent relationship with it suppliers and that helps it
maintain a continuous and uninterrupted flow of raw material.

Operations
The operations function of Coca Cola includes concentrate development and
all the administrative functions of headquarters. Coca Cola is a global business that
operates at a local scale in every community where it does business. The Coca cola
system operates through many local channels.  However, it does not own or control
all its bottling partners. The company just manufactures and sells beverage bases
and syrups to bottling operations. The company owns the brand and is responsible
for the consumer brand marketing initiatives.

Outbound Logistics
This part of Coca Cola’s Value chain consists of its bottling partners and
distributors. It bottling partners manufacture, package, merchandise and distribute
the final product to the customers and vending partners. These vending partners
then sell the product to the customers. The customers of Coca Cola include the
grocery stores, restaurants, street vendors, convenience stores, movie theatres and
amusement parks. The bottling partners of Coca Cola work with the customers to
execute localized strategies developed in partnership with Coca Cola company.

Support Activities
Technology
Coca Cola also maintains heavy focus on technology and research and
development.  From production to distribution and sales, everywhere it has invested
in technology. Apart from that it also focuses on technological innovation through
R&D. It has six R& D centers around the world that  are connected to external
technology and assessment hubs connecting it with partners, tech start ups  and
university researchers.  The company collaborates with partners in the other
industries to fuel innovation across products, packaging, equipment and the other
things. In this way, Coca Cola is continuously focusing on innovation for growth.

Human Resource Management

This is also a very important area of Coca Cola’s value chain.  The company
has focused on hiring and developing talent and creating an environment of learning
and growth. It pays them good salaries and also complements the payments with
rewards.  Coca cola focuses on employee motivation and engagement. Apart from it,
the focus is on performance management to provide the employees with career
growth.

Procurement
Coca Cola procures from thousands of farmers and suppliers. It uses
technology to make the entire process easier and efficient.  It has maintained good
relationships with its suppliers and provided guidelines that the suppliers are
required to follow.

Firm Infrastructure
The role of a firm’s infrastructure is central to its success. Coca Cola has
managed a large infrastructure including its management, human resources,
financial and technological infrastructure. It is also educating its suppliers and
focusing on innovation through its R&D centers.

IV. Conclusion

Logistics management system has two parts, the inbound and outbound
logistics which are the vital factor for the manufacturing companies to obtain
competitive edge and better performance. Other companies may value evaluations
to accurately identify their under-utilized resources and thereby make better use of
their resources. Developing synergies may also aid in a stronger inventory control.
The success of every manufacturing company involves production of products with
high level of quality and safety,  as well as continuous improvement of technologies
that are involved in all activities of the company's operations. Furthermore, company
pays great attention to its workforce and motivates its employees with different
variety of rewards. This method leads to production improvement and results in
customer satisfaction.

V. References:

Toyota Company Logistics Operation

Coca Cola Company Logistics Operation