Toyota Motor Corporation is a Japanese company that deals with the manufacture and assembly of cars (Toyota, 2015). Toyota operates as a multinational company so as to increase its sales. It is one of the largest companies in the world in terms of revenue generation. The success of Toyota is attributed to its supply chain. The company has adopted a strategy that enables people to afford cars. This strategy involves the development of different models that suit people of different income levels. These models are targeted to audiences based on their different needs (Toyota, 2015). Some people want functional cars that can take them from one location to another at low costs. Other people want luxury cars that earn them some respect in the society. Other people want cars for business purposes. Toyota relies heavily on its supply chain to gather information that will enable the company to supply the type of cars that the market needs.
Toyota’s value chain is composed of several elements that are very important for the success of the company. Some of these elements include suppliers; assembly plants; communication networks; distributors; and consumers. Toyota requires raw materials that enable the company to manufacture the cars. The raw materials need to be of high quality and cost effective. The company is focused on providing its customers with high quality products so that it can retain them and gain more customers. Customer satisfaction is a key element that aids the company in its production processes (Toyota, 2015).
Toyota operates on a global market so it establishes plants in various regions so as to reduce the costs involved in the supply of vehicles to the customers (Marchese, 2014). These assembly plants make it easy for the customers to purchase their cars within a short time as opposed to importing a car. Importing cars can take a very long time, and a customer may be impatient. Another disadvantage of importing cars involves the costs of customs clearance. It is easier for the customers to buy cars from the assembly plants. The assembly plants enable Toyota to know more about the needs of the customers based on the type of cars that are on high demand. The information gathered from assembly plants is very valuable because it enables the company to focus on the products that the customers need. It enables Toyota to supply more of the cars that are on high demand and less of the cars that are on low demand. This helps the company to reduce costs associated with products that are not moving.
The communication networks within the supply chain of Toyota enable the suppliers, distributors, and customers to share information with each other. The suppliers are able to avail information to the company regarding the best materials to use in the development of new products (Roberts & Zahay, 2012). The assembly plants and distributors enable the company to gather information from customers. The information involves both positive and negative feedback about the cars. The positive feedback enables the company to produce more cars so as to meet the demands of the customers. The negative feedback enables the company to improve on its cars so that the customers can achieve satisfaction. These communication networks enable the company to decrease costs because they can focus on products that are selling instead of supplying products that the customers do not want (Roberts et al., 2012). The valuable information gathered from communication networks enable Toyota to work towards customer satisfaction.
Toyota has successfully relied on its just-in-time delivery of parts in its supply chain. However, natural disasters have on numerous occasions threatened this success. Toyota has now improved its supply chain to enable focusing on the future. The supply chain has being modified by using technology to anticipate natural disasters (Marchese, 2014). The company now produces cars to a level that is close to the demand so as to avoid excess supply that may be destroyed in the event a natural disaster strikes. The effect of this approach is the reduction of costs and losses that may be suffered in case a disaster occurs.
Toyota, (2015). Dynamic Growth Based on Making Ever-Better Cars. Toyota. Retrieved from: http://www.toyota-global.com/innovation/quality/
Marchese, K., (2014, Aug 12). Toyota Pioneers New Global Supply Chains. Wall Street Journal. Retrieved from: http://deloitte.wsj.com/cio/2014/08/12/toyota-pioneers-new-global-supply-chains/
Roberts, M. L. & Zahay, D., (2012). Internet Marketing: Integrating Online and Offline Strategies. Boston: Cengage Learning.