Toyota

Supply change
Management

Submitted By: GROUP 2

INTRODUCTION

GM, Ford and Chrysler almost dominated the global market in

early twentieth century
1994 : Replaced Chrysler
2003 : Replaced Ford and became the 2nd largest global
manufacturer
2008 : Replaced GM to become the largest automaker globally
Toyota motor corporations vehicle production system is a way of
making things that is referred to as lean manufacturing
system.
The TPS (Toyota Production System) was developed to improve
Quality and Productivity.
Objective: Making the vehicles ordered by customers in the
quickest and most efficient way, in order to deliver the vehicles
as quickly as possible.

Origin of Toyota Production System

Sakichi Toyoda(1867-1930 )
Automatic loom
Kiichiro Toyoda(1894-1952)
Used chain conveyor into the
Assembly line.
Eiji Toyoda(1913)
Implementation of Jidoka and JIT.

Based on

Toyota PRODUCTION
SYSTEM(TPS)
To provide best quality, lowest cost, and
shortest lead time through the
eliminating of waste.
Established on two concepts:
JIDOKA: Automation with a human touch,
means that when the problem occurs, the
equipment stops immediately, preventing
defective product from being produced.
JUST-IN-TIME: In which each process
produces only what is needed by the next
process in a continuous flow.

TPS Concepts
1.

JIDOKA:

Highlighting

problems
Means that a machine
safely stops when the
normal
processing
is
completed
Operators can confidently
continue performing work
at another machine, as
well as easily identify the
problem
cause
and
prevent its recurrence.

TPS Concepts
2. JUST IN TIME: Complete elimination of waste
When a order is received, production instruction must be issued to
the beginning of the production line as soon as possible
The assembly line must be stocked with small numbers of all
types of parts so that any kind of vehicle ordered can be
assembled
The assembly line must replace the parts used by retrieving same
number of parts from the parts-producing process
The preceding process must be stocked with small no. of all types
of parts and produce only the no. of parts required in next process

Kanban system
Unique production control method
Idea borrowed from super markets so called
super market method
When a process goes to the preceding process
to retrieve parts, it uses Kanban signs to
communicate what parts have been used
Reduces excess production

Sabio bernard

OUTCOME OF TPS
Reduction of lead time to a great extent
Improvement of quality
One of ten largest companies in the world
Largest car manufacturer
Low cost
Fast response

Toyota Supply Chain

Suppliers
Parts
Inbound
logistics
Assembly plant
Production
Inspection
Outbound
logistics
Dealers

Customers

Suppliers
Suppliers provide thousands
of parts and components that
go into the vehicle.
Parts and components are
received from Tier 1 suppliers
through inbound logistics.
Supplier chain contains
several levels tier 1,tier 2
and so on.
Since Toyota relies on JIT it
has fewer but reliable tier 1
suppliers.
Eg : Denso, Bridgestone etc

Inbound Logistics
Company establish partnership with third party logistic providers
Company organizes many of its suppliers into clusters based on
geographic location.
Parts are picked up from those suppliers by trucks on a milk route and
delivered to regional cross dock.
At cross dock, parts are unloaded and staged for each assembly plant
and then loaded to trucks which take parts directly to each plant.
After the parts are unloaded, the truck is reloaded with the
corresponding empty returnable containers.
Returnable containers flow in reverse route
Network
design-to
analyse
locations of
suppliers

Determine
which cross
dock is located
nearest to
suppliers

Transport parts
to cross docks
and stage them
for each
assembly

Transport to
plants and
containers
travel in
reverse route

Production
Vehicles are produced at the final assembly plant from the parts
provided by hundreds of suppliers.
The plant is subdivided into shops. The vehicle is born in the body shop
where the
frame and body are formed.
The body parts are stamped in the stamping shop by presses.
The body shop is where numerous robots are used to weld the body
parts together.
After body being assembled, it moves to paint shop
After painting ,it moves to final line where supplier parts are installed to
make finished vehicle.
Final Inspection is done and moved to yard.

Outbound logistics
Vehicles at
marshaling
yard

Accessories
installation

Final quality
assurance

Transport to
dealers

Dealers :
Responsible for selling the vehicles produced by the
manufacturer to the retail customers.
Toyotas sales model is designed so that a high
percentage of vehicles is sold from a relatively low level
of dealer stock

Effect of supply chain on the

company
Considering suppliers and dealers as partners, sharing profits with
them, has helped to manage supply chain efficiently.
By leveling out production and synchronizing with demand and
supply has helped to maintain stability in supply chain.
By effective demand forecasting , production and supply chain
activities are managed effectively .
Suppliers are categorized as clusters based on geographic location
and single truck picks up part from the cluster increasing the
efficiency of supply chain..
Toyota takes responsibility for procuring parts from supplier which
increases reliability on inbound logistics.

Concerns
Toyota took its single source
strategy to risky extremes
without
proper
risk
management oversight, need
closer observation on tier-2 and
tier-3 suppliers.
Bigger
expansion
means
working
with
unfamiliar
suppliers who may not have
proper understanding of Toyota
culture.

Toyotas spirit of making things is being spread through

out the world as

The Toyota
way