Supply Chain Management Of Toyota

Presented By

Shruthi.Holla

Sneha.LS

Soujanya.N

Founded 1937

Founder Kiichiro Toyoda

Headquarters Toyota City, Japan

Industry Automotive, Robotics, Financial Services and Biotechnology

Products Economy/mainstream/luxury vehicles

Revenue 18.583 trillion (2012)

Employees 300747 (2012)

INTRODUCTION

Toyota Motor Corporation

History of Toyota Auto Industry

Established in 1937 out of Sakichi Toyota’s weaving machine company

Launched first car (SA Model) in 1947

“Toyota Production System” formed in 1950 based on just in time principal

First global expansion in 1959 at Brazil

In 1972, cumulative production >10M units

Founder: Kiichiro toyoda

CEO : Akio toyoda

MD: Hiroshi nakagawa

Present CEO : Fujio Cho

Founder & CEO

Business segments

Automotive

• Design, manufacture and sales of passenger cars, recreational

vehicles, SUVs and related parts

Financial services

• Provisions of loans to car buyers and car deals.

Others

• Industrial vehicles (forklifts, etc.)

Product line

Electric technology- Toyota pirus, Auris.

Highlander and Camry

Plug- in hybrids

All electric vehicles- RAV4

Cars- 70 different models

SUV’S

Luxury type vehicle

Non- Automotive Activities

AEROSPACE

Toyota is a minority shareholder in Mitsubishi Aircraft

Corporation

invested US$67.2 million

will produce the Mitsubishi Regional jet.

It has also produced aircraft TAA-1 in 2002

Philanthropy

• Toyota Municipal Museum of Art in Aichi helping low-income

community members for education

• United Negro College Fund (40 annual scholarships)

• National Underground Railroad Freedom Centre (US$1 million)

Higher education

Toyota established the Toyota Technological

Institute in 1981, as Sakichi Toyoda

It founded the Toyota Technological Institute at

Chicago in 2003

Supporter of-

• Toyota Youth for Understanding Summer -

Exchange Scholarship Program.

• Toyota Community Scholars.

• contributed to a

number of local education.

Robotics In 2004, Toyota showcased

its trumpet-playing robot.

Developing multi task robots destined

for elderly care, manufacturing, and

entertainment.

Example of Toyota's involvement in

robotics for the elderly is the Brain Machine

interface

SCM

Minimizing supply chain costs

while keeping

a reasonable service level

customer satisfaction

quality

on time delivery, etc.

OBJECTIVE

Right product

Right price

Right store

Right quantity

Right customer

Right time

Supply chain overview

Suppliers Parts

Assembly plant

Inbound logistics

Inspection

Dealers

Outbound logistics

Production

Customers

Suppliers •Suppliers provide thousands of

parts and components that go into he 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 had

fewer but reliable tier 1 suppliers.

Ex: Denso, Bridgestone etc

Production• Vehicles are produced at the final assembly plant from the

parts provided by hundreds of suppliers.

•The plant is sub divided in to 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

Supply chain Contd….

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 docs and stage them for each assembly

Transport to plants and containers travel in reverse route.

Procurement Policy

Toyota procures the necessary parts, materials, and equipment for these many different business fields from

suppliers all over the world.

Toyota also cooperates with their Suppliers to promote environmental preservation and meet the other demands of

society.

They take a long term view toward our relationships with suppliers with an aim to realize an amicable relationship

of mutual prosperity based on fair business practices.

• Fair Competition Based on an Open Door Policy

• Amicable Relationship of Mutual Benefit Based on Mutual Trust

• Environmentally-Friendly Products Based on ”Green Procurement”

• Localization of Business Based on Good Corporate Citizenship

• Obeying the Law

Vehicles at marshalling yard Accessories installation Final quality assurance Transport to dealers

Outbound Logistics

Dealers:• Responsible For selling the vehicles produced by the manufacturer to there tail customers.

•Toyotas sales model is designed so that a high percent age of vehicles is sold from a relatively low level of dealer stock.

Toyota Distribution model:

Distribution Model

Local Distribution Model

Over seas Distribution Model

European Distribution Model

Overseas Network

Components Supplier Group Raw Material

Suppliers

Warehouse

Distributor

Assembly Plant

Dealer

CustomerParts/ Service Centers

TOYOTA SUPPLY CHAIN

FEATURES OF TPS

TPS

Technical Related

JIT

Kanban

People RelatedWorkers

Suppliers Revolutionized manufacturing industry

At its core is “lean”

a relentless drive to improve efficiency and eliminate waste

Beginnings of TPS were born out of necessity due to lack of resources in post-war Japan.

SMED

• Single Minute Exchange of Dies

• Promoted flexibility of production runs

JIT

• Just In Time manufacturing

• Small batches which reduced inventory costs,

tightened relationship with suppliers and improved

quality control

JIDOKA

• One of the two main pillars of TPS.

• It refers to the ability to stop production, by man or

machine.(equip malfunction).

Heijunka

• Where ever possible evenly distributed workload

made at any time, Without this, just in time cannot

be applied, because it will happen stacking and

queuing at peak level.

Total Productive Maintenance

• A comprehensive equipment maintenance process

so that the tools are always in good condition to

wear to work.

Key Main Concepts Of TPS

Toyota’s Strategy

Increase competitive strength through advanced technology

Environmental technology

fuel consumption, emission, recoverability

Increased emphasis on financial services and information communication system

Hybrid vehicles and next generation fuel cells

Cost-reduction efforts

discontinuation, integration of older models

Establish Goals and Objectives

Develop a Strategy to meet your needs

Make RecommendationImplement Recommendation

Review your goals and current situation

Financia

l Plan

ning Process

Financial Planning Process

Drivers of Supply chain

Facility:

• Vehicles coming out of assembly line are moved into

warehouse called “Marshaling yard” .

• Fitting accessories, price tag and final quality assurance

takes place here.

Inventory:

• Just-in – time based inventory method.

• Pull based system and kanban methods are followed.

Transport:

• Majority of transport of raw material through truck , since

suppliers stay close to plant.

• Finished products transported through truck or rail for

transport within the country and ships for export.

• Road transport is provided by third party logistic

providers.

Information:

• Parts and master database is maintained for part name,

supplier, lot size information.

• 13 week forecasting is given to suppliers to provide them

with guidance.

Sourcing

Pricing

• Toyota is a great company with an integrated supply chain management as well.

• Toyota has an integrated system in its production, namely TPS (Toyota Production System).

• Toyota has a wide range of advantages ranging from human resources to its products, it is evidenced by the wide range

of awards

• Toyota have 14 principles which refers to the quality of service, product quality and efficiency

• Toyota including Indonesia's largest company automotive in the world.

• Toyota lead because his concept of lean management.

Conclusions

Any Questions…!!!

Thank You…!!!