Supply Issues in Supply Chain Management

Unit 4 Assignment: Supply Issues in Supply Chain Management

This assignment will assess your knowledge based on the following Outcome:

MT433-2: Evaluate supply issues in supply chain management.

In this assignment, you are going to analyze the supply strategy of an organization. Preferably, you will select the organization where you currently work or one where you previously worked. If this is not possible, you may select a well-known company on which you will be able to gather significant supply chain information.

In order to complete this assignment, you may need to first collect information from your organization. Start this process early in the week so to ensure you have all the information you need.

There are many supply issues that will impact a company’s operation. Supply management professionals must be able to recognize these, evaluate their importance and prioritize them. Based on these priorities they must ensure the right suppliers are selected and managed.

Instructions:

For this assignment, answer the following questions:

What are the top three supplier performance dimensions that your organization is most concerned about? You may use table 3.1 for a list of relevant factors.

Explain why your company prioritizes each of these. Do you think they are using the right ones?

How does your organization manage its relationship with its key suppliers? Is there an established program, is it based on personal connections, or something else? Should they change the way they do this? Explain.

How does your organization use forecasting? Explain.
a. What do they forecast and how frequently do they generate new forecasts?

b. Where do they get their data and any issues with data collection?

c. Which methodology do they use?

d. How do they evaluate the performance of their forecasts? Are the error metrics (MAD, MSE, etc.) good? Would you recommend using a different methodology?

Respond using the critical elements below:

Compose your original response in Standard English, paying special attention to grammar, style, and mechanics.

Respond to the questions in a thorough manner, following the prescribed format and citing your sources using the current APA guidelines.

Ensure that your viewpoint and purpose are clearly stated.

Demonstrate logical and appropriate transitions from one idea to another.

Your paper should be highly organized, logical, and focused.

ANSWER

Supply Issues in Toyota Supply Chain Management

Introduction

Toyota is one of the leading automotive companies in the world. It is renowned for producing cheap yet effective motor vehicles, thereby enhancing its popularity around the world. The Toyota Company has numerous headquarters in every continent, being the leading producer in automotive vehicles and spare parts in Africa, Asia, and Europe (Toma & Naruo, 2019). However, the success of Toyota was not an overnight sensation. Its success is mainly characterized by its supply chain that focuses on efficiency and cost-reducing factors. It is an impeccable example of the modern supply chain in terms of supply chain management. The company prioritized three essential performance dimensions in the organization. These include productivity, quality, and timeliness (Nakano, 2019). This essay focuses on these three key dimensions and some of the issues regarding Toyota’s supply chain management.

Toyota’s Supplier Performance Dimension

Supplier performance dimensions/ measures are tools used to determine whether the suppliers are doing their work as expected and in conjunction with the company’s culture. As mentioned, Toyota has prioritized their quality, productivity, and timelines as part of their supplier performance dimension. Toyota has managed to ensure quality is guaranteed as part of their culture through investing in people training their employees to ensure every vehicle is made with the highest quality (Cil et al., 2019). Investing in their employees through continuous training ensures that they are familiarized with the required skills needed to produce quality. According to the CEO of Toyota, Akio Toyoda, the company also promotes quality through counterchecking every vehicle made before they are approved. This ensures that when vehicles are supplied to every continent, they are of top-notch quality (Cil et al., 2019).

Another key supplier performance dimension is productivity. Toyota has managed to enhance its supplier performance through its ability to produce a high quantity of cars at a cheaper cost. According to research conducted by the Massachusetts Institute of Technology (MIT), the company uses the Toyota Production System (TPS) to enhance its productivity (Nkomo, 2019). According to the study, using TPS has enabled Toyota to eliminate waste, reduce defects, maximize flow while at the same time increasing efficiency and productivity. This ensures that the final yield is guaranteed by the company and maximizes their profit by being able to use less to produce more.

The third supplier performance dimension is timeliness (ability to produce goods at the required time). Toyota uses the widely renowned system of ‘JIT,’ just in time, a concept used by the company to ensure that goods are produced at the precise time of need (Nkomo, 2019). The concept ensures that each step within the manufacturing process produces only what is required at the particular time. The company uses JIT in conjunction with ‘jidoka’. According to Toyoda, jidoka is a form of intelligent automation that halts whenever a part of the program in their machines malfunctions. This ensures that no defecting vehicles are assembled, thereby saving crucial time to meet the market demand.

Toyota’s relationship with Key Suppliers

Supplier relations are fundamental to the success of the company, as they are used to mirror the reputation and culture of the company. Toyota’s procurement policy uses three key criteria as part of its relations with their suppliers. The first one is a fair competition based on an open-door policy (Nkomo, 2019). The potential suppliers are granted a fair playing ground for their competition. The open-door policy ensures there is transparency and freedom to raise issues of dissatisfaction within the suppliers. The second is mutual trust between the company and the suppliers to create mutual trust and benefit for both parties (Nkomo, 2019). The ability to trust each other within Toyota and their suppliers ensures the free flow of vehicles and spare parts, with timely delivery, invoices, and payments according to the terms and conditions of binding contracts. The final fundamental criteria employed by Toyota is prioritizing the most competitive partners. The automotive industry is extremely competitive. Therefore, it is essential for Toyota that they go into business with competitive partners that show the same zeal and hunger to outdo their competition.

Toyota believes in developing mutually beneficial, long-term relationships that help build trust with their suppliers (Aoki & Wilhelm, 2017). This has ensured that they continue to prosper, venture, and expand in continents like Europe. For instance, through mutual respect and trust, Toyota has developed Toyota Manufacturing UK, which has 260 parts based in UK and Europe. Toyota also has 800 suppliers producing supplies and site services to two key UK plants (Nkomo, 2019). The relationship between UK partners (a continent highly competitive in the automated industry) ensures that Toyota thrives and expands and gains popularity.

Forecasting

Forecasting is a technique used by organizations that use historical data to make estimates to predict future market trends. Toyota uses forecasting to try and forecast the nature of the market and control inventory management, and set the objectives for operations management (Nkomo, 2019). Forecasting at Toyota is done monthly. This is due to the high quantity of production within the company, necessitating the need for frequent forecasting to ensure that they understand the market trend. Forecasting at Toyota is done using forecasting software. The software is regularly updated to ensure that it monitors and predicts the required monthly forecasting for the company. The software uses a quantitative methodology to measure the unit sales of Toyota Industries and predict potential events in the future (Nkomo, 2019). However, Toyota also ensures that the forecasting is correct. This is done by conducting annual regional and national meetings to analyze the unit sales within the financial year in question.

References

Aoki, K., & Wilhelm, M. (2017). The role of ambidexterity in managing buyer-supplier relationships: The Toyota case. Organization Science, 28(6), 1080-1097.

Cil, I., Demir, H. I., & Yaman, B. (2020). Lean logistics in the 2020s and a cast study about logistics and supply chain management in Toyota Boshoku Turkey. In Global perspectives on green business administration and sustainable supply chain management (pp. 276-315). IGI Global.

Nakano, M. (2019). Supply chain management: strategy and organization. Springer.

Nkomo, T. (2019). Analysis of Toyota Motor Corporation.

Toma, S. G., & Naruo, S. (2017). Total quality management and business excellence: the best practices at Toyota Motor Corporation. Amfiteatru Economic Journal, 19(45), 566-580.