This presentation briefly tries to explain the supply chain management in Toyota Automobiles. The presentation is co-developed by Shashank M.A, Saiganesh N.P. & Anju Pillai. By:- Aniruddh Tiwari Linkedin :- http://in.linkedin.com/in/aniruddhtiwari

1. By,
Annirudh
Anju
Minakshi
Sai Ganesh
Shashank
Debtanu

2. CONSISTS OF:
 Designing
 Manufacturing
 Selling automobiles
 Calty Design Research
 Toyota Racing Development
TYPICAL DIVISIONS WITHIN OPERATIONS:
• Engineering and manufacturing
• Research and Development
• Sales
• Financial services

3. KEY FEATURES OF TOYOTA BUSINESS MODEL:
• Integrated Low Cost
• Differentiated Strategy
Integrated Low Cost:-
•Heightened the value and fortifies the competitiveness of product
•Purchasing the world's best parts at the lowest cost with the shortest lead
times
•Higher quality at lower costs by creating standardized, multipurpose
components
•In 2000, Toyota launched a new cost effective strategy called CCC21
(Construction of Cost Competitiveness for the 21st century), for Low Cost
operational expenses
•Intensive coordination with its suppliers
•Finding the lowest operational cost
•Toyota steadily feeds cost improvements back into the product to raise their
value
Differentiated Strategy
•Unique niche or strategy that separates them from the competition
•Undertaken manufacturing revolution by integrating four areas: design, production
engineering, procurement, and component supply

4.  Market share of 14% in the first four months of
this year
 2.3% jump from the previous year
 Toyota ranks fourth in United States sales

5. •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.

6. Toyota supply chain
Supply chain overview
Suppliers
Parts
Inbound
logistics
Assembly
plant
production
Inspection
Outboun
d logistics
Dealers
customers

7. 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

8. Inbound logistics planning –steps
Network design- Determine which Transport parts Transport to
to analyse cross dock is to cross docs and plants and
locations of located nearest to stage them for containers travel
suppliers suppliers each assembly 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.

9. Outbound logistics
Vehicles at
Accessories Final quality Transport to
marshaling
installation assurance dealers
yard
Dealers :
•responsible for selling the vehicles produced by the manufacturer to the retail customers.
•Toyota s sales model is designed so that a high percentage of vehicles is sold from a
relatively low level of dealer stock
Toyota Distribution model
Local production model
Distribution Overseas production
model model
European distribution
model

10.  Considering suppliers and dealers as partners, sharing
profits with them, has helped to manage supply chain
efficiently.
 By leveling out production (heijunka) 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.

11.  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.

12.  Benchmark Tier-2 and Tier-3 suppliers as per
Tier-1 suppliers
 Scope for improvement in Outbound Logistics