LIVE PROJECT

ON
SUPPLY CHAIN MANAGEMENT
OF TOYOTA CORPORATION

SUBMITTED TO: SUBMITTED BY:

Prof. Lalit Bagchi Aniruddha Srikant(18BSP4411)

Vilas Kr. Paswan(18BSP3621)

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INTRODUCTION
Toyota Motor Corporation is a Japanese multinational automotive manufacturer
headquartered in Toyota, Aichi, Japan. In 2017, Toyota's corporate structure consisted of
364,445 employees worldwide and, as of September 2018, was the sixth-largest company in the
world by revenue. As of 2017, Toyota is the largest automotive manufacturer. Toyota was the
world's first automobile manufacturer to produce more than 10 million vehicles per year which it
has done since 2012, when it also reported the production of its 200-millionth vehicle. As of
July 2014, Toyota was the largest listed company in Japan by market capitalization (worth more
than twice as much as number 2-ranked SoftBank) and by revenue.
Toyota is the world's market leader in sales of hybrid electric vehicles, and one of the largest
companies to encourage the mass-market adoption of hybrid vehicles across the globe. Toyota is
also a market leader in hydrogen fuel-cell vehicles. The company was founded by Kiichiro
Toyoda in 1937, as a spinoff from his father's company Toyota Industries to create automobiles.

SUPPLY CHAIN PROCESS

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INVENTORY MANAGEMENT
Supply-chain management at Toyota is an element of company’s operations strategy which is
thoroughly based on the Toyota Production System (TPS). It was developed in the 1940’s by
Shigeo Shingo and Taiichi Ohno. As Toyota’s success gained world-wide coverage, at was
followed by interest by other companies in TPS, the principles of which is expressed by the term
of “lean manufacturing”
“JIT system – a system that organizes the resources information flows and decision rules that
enable a firm to realise the benefits of JIT principles”. The elements of just-in-time system are
being pro-active in exposing problems, pull production based in Kanban , Total Quality
Management, elimination of waste, reducing inventory through involving suppliers in planning
process, continuous improvement, improving machinery and focusing on co-operation.
According to Kanban each part travels with a card. New stock will only be required when that
part has been used, the card is removed, using signals to re-stock this part. Kanban is well
integrated in Toyota’s production system, because in Toyota there are limited number of parts
with stable demand for them. Also, product mix is low and exchanges are infrequent.

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CAPACITY MANAGEMENT
Capacity planning in any company is part of a supply-chain management for that specific
company. Toyota’s way to capacity planning is that it strives to eliminate inventory. In achieving
this objective Toyota relies heavily in pull system. Generally, the main objective is continuous
improvement.

LEAN MANAGEMENT SYESTEM

Another operational excellence pioneered in Toyota and later adopted by other companies
worldwide is a “Lean Concept”. Lean philosophy aims to achieve are the elimination of all
waste, superior customer care, and Lean is based on pull system where the elimination of waste
seen as a primary objective. Just in time inventory management allows a company to gain a
competitive edge by not having to have a large amount of inventory in their warehouses, but only
to order parts when they are actually needed. According to just in time philosophy new material
will be produced only when old stock of that material has finished.
Toyota’s seven major types of non-value-adding waste in business and manufacturing business is
shown by Liker in Which he suggests eighth’s type as well. These are overproduction, waiting,

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unnecessary transport or conveyance, over-processing or incorrect processing, excess inventory,
unnecessary movement, defects and unused employee creativity.
In today’s highly competitive global marketplace companies are forced to seek opportunities to
create competitive edge for them not only to broaden their share of market, but also to survive at
all. Supply chain management is an aspect for any business to be looked at properly in order to
identify ways to improve it. Improvement in supply chain management can reduce costs for a
company and increase the efficiency and requires a strategic approach to be implemented
towards it.
Toyota Motor Corporation is currently one of the model companies worldwide in many aspects
of conducting a successful business practice, including supply chain management. They
principles of Just in time, Kanban, lean manufacturing, Kaizen and others provides competitive
edge for Toyota and provide efficiency in many business functions along with supply chain
management. Other companies willing to increase their productive efficiency need to look at
these principles above, and if the need arises, implement them into their own business practices.
It needs to be done, of course, taking into account the current culture within organization and the
level of knowledge and qualification of employees.

TRANSPORTATION PROCESS

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