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    Rahul Dalvi
    Toyota is Japan's top auto manufacturer that has experienced global sales growth over the past two decades. As Toyota expanded globally, it had to design a global production and distribution network. Toyota's strategy was to open factories in every market it serves, but it had to determine each factory's production capabilities and how that impacts the distribution system. Prior to 1996, Toyota used local specialized factories for each market, but after an Asian financial crisis, Toyota redesigned plants so they could export to strong markets when local markets weakened. Toyota also had to determine if parts plants would be local or globally supply multiple assembly plants. A large recall affecting models across regions showed issues with using common parts globally. As a global manufacturer, Toyota had to address

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    Case 4

    Uploaded by

    Rahul Dalvi
    87 views1 page
    Toyota is Japan's top auto manufacturer that has experienced global sales growth over the past two decades. As Toyota expanded globally, it had to design a global production and distribution network. Toyota's strategy was to open factories in every market it serves, but it had to determine each factory's production capabilities and how that impacts the distribution system. Prior to 1996, Toyota used local specialized factories for each market, but after an Asian financial crisis, Toyota redesigned plants so they could export to strong markets when local markets weakened. Toyota also had to determine if parts plants would be local or globally supply multiple assembly plants. A large recall affecting models across regions showed issues with using common parts globally. As a global manufacturer, Toyota had to address

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    Toyota is Japan's top auto manufacturer that has experienced global sales growth over the past two decades. As Toyota expanded globally, it had to design a global production and distribution network. Toyota's strategy was to open factories in every market it serves, but it had to determine each factory's production capabilities and how that impacts the distribution system. Prior to 1996, Toyota used local specialized factories for each market, but after an Asian financial crisis, Toyota redesigned plants so they could export to strong markets when local markets weakened. Toyota also had to determine if parts plants would be local or globally supply multiple assembly plants. A large recall affecting models across regions showed issues with using common parts globally. As a global manufacturer, Toyota had to address

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    87 views1 page

    Case 4

    Uploaded by

    Rahul Dalvi
    Toyota is Japan's top auto manufacturer that has experienced global sales growth over the past two decades. As Toyota expanded globally, it had to design a global production and distribution network. Toyota's strategy was to open factories in every market it serves, but it had to determine each factory's production capabilities and how that impacts the distribution system. Prior to 1996, Toyota used local specialized factories for each market, but after an Asian financial crisis, Toyota redesigned plants so they could export to strong markets when local markets weakened. Toyota also had to determine if parts plants would be local or globally supply multiple assembly plants. A large recall affecting models across regions showed issues with using common parts globally. As a global manufacturer, Toyota had to address

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    Toyota: A Global Auto Manufacturer

    Toyota Motor Corporation is Japan’s top auto manufacturer and has experienced significant
    growth in global sales over the past two decades. A key issue facing Toyota is the design of its
    global production and distribution network. Part of Toyota’s global strategy is to open factories
    in every market it serves. Toyota must decide what the production capability of each of the16 Chapter 1
    • Understanding the Supply Chain
    factories will be, as this has a significant impact on the desired distribution system. At one
    extreme, each plant can be equipped only for local production. At the other extreme, each plant
    is capable of supplying every market. Prior to 1996, Toyota used specialized local factories for
    each market. After the Asian financial crisis in 1996/1997, Toyota redesigned its plants so that it
    could also export to markets that remain strong when the local market weakens. Toyota calls this
    strategy “global complementation.”
    Whether to be global or local is also an issue for Toyota’s parts plants and product design.
    Should parts plants be built for local production or should there be few parts plants globally that
    supply multiple assembly plants? Toyota has worked hard to increase commonality in parts used
    around the globe. While this helped the company lower costs and improve parts availability,
    common parts caused significant difficulty when one of the parts had to be recalled. In 2009,
    Toyota had to recall about 12 million cars using common parts across North America, Europe
    and Asia causing significant damage to the brand as well as the finances.
    Any global manufacturer like Toyota must address the following questions regarding the
    configuration and capability of the supply chain:
    1. Where should the plants be located and what degree of flexibility should be built into
    each? What capacity should each plant have?
    2. Should plants be able to produce for all markets or only specific contingency markets?
    3. How should markets be allocated to plants and how frequently should this allocation be revised?
    4. What kind of flexibility should be built into the distribution system?
    5. How should this flexible investment be valued?
    6. What actions may be taken during product design to facilitate this flexibility?

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