SOHAR UNIVERSITY

FACULTY OF BUSINESS
MBA PROGRAM
Operation Management- MBA202

“Supply Chain Management”

Prepared By:

Heba Fakhal ID No. 161344

Mahfoudha Al-Ghaithi ID No. 161327

Table of Content

Page No.
No. Chapter/Description

Chapter 1:
2

4 Chapter 3:

5 Chapter 4:

9
Introduction

Supply chain management (SCM) is defined as the goods and services flow management

that includes the development and capacity of raw materials, inventory of work-in-

process, and of completed merchandise from purpose of inception to purpose of

utilization. In 1982, Keith Oliver, an expert at Booz Allen Hamilton, utilized the term of

“Supply Chain Management" in a meeting for the Financial Times. Since that time, this

term entered the public domain.

Supply chain Management was defined by one of the first to formally characterize as

“enveloping all exercises related with the stream and change of products from crude

materials all the way to the finish client, and additionally the related data streams.” Thus,

it was in this way characterized as “the incorporation of these exercises through enhanced

store network connections to accomplish a focused advantage”. This term rose to

noticeable quality as an administration popular expression, and operations supervisors

started to utilize it in their titles with expanding consistency in the late 1990s until now.
Company’s Background

Toyota was built up by Sakichi Toyoda when he invented Toyoda Model G Automatic

Loom in 1924. As far back as its establishing, Toyota has tried to have a contribution to a

more prosperous society by the automobiles manufacture and working its business with

an attention on vehicle sales and productions.

Toyota is extremely pleased with the dynamic blend of societies, sex, ages, beliefs and

religions. This assorted qualities of work environment and the diversity that they ought to

exploit by perceiving and regarding both their contrasts and similarities. The company

expects while in the work environment all representatives will be tolerant towards others.

In March, 2011, it directs its business around the world with fifty abroad manufacturing

organizations in twenty six regions and countries. It sold its vehicles in more than 170

regions and countries.

In a new investigation of relations of suppliers, Toyota ascends to the top. It is considered

to be the best working relationship regards to its suppliers in terms of quality, cost and

reliability. Moreover, this results in getting advance technologies better than its

competitors.

On February 06, 2017, an article published about Toyota in Fox Business website and

mentioned that, as Toyota Motor is the automaker world’s No. 2, it increased the forecast

of its full-year profit by 9.5%. It expects a greater respite from a debilitating yen while

cost-cutting endeavors additionally offer assistance.

Toyota’s mission and vision statements

 Toyota Mission

“Toyota delivers outstanding automotive

products and services to their customers,

and enriches their community, partners and

environment”.

 Toyota Vision

“Most respected and admired company”.

Toyota’s Supply Chain Management (Corolla)

The Supply chain management of Toyota for Corolla Cars incudes vendors who provide

the parts that is needed for the manufacture, whether the company purchases it locally or

imports it from vendors. Then, the company sends these parts to the manufacture. It

involves receiving dock > pc store > production until the car be fully manufactured. After

that, it is sent to the dealer who therefore sends it to customers.

It is very critical to understand the two main process of Toyota’s Value Chain. The first

process is the Core Process (Primary activities) that involves Inbound Logistics,

Operations, Outbound Logistics, Marketing and Sales and Service.

The second process is the Support Process (Support Activities) that includes Firm

infrastructure, Human Resource Management, Technology Development and

Procurement.
 Value Chain Management

Primary activities

1. Inbound logistics

Toyota utilizes an outsider, third party, to obtain the raw materials. They gave the little

parts, for example, tire, leather seats, and steering wheel to local organizations. However,

to the way of key significance, similar to a machine, they import from Japan, the center,

in order to keep up the quality standard that was made Toyota. The company put on the

assembly framework all the while. This led Toyota to require a place to store supplies,

Toyota’s raw material supply for its assembly or distribution center, to abstain from

heaping up an excessive number of assets, Toyota to predict the demand.

 2. Internal Logistics in Toyota

3. Operations

Toyota uses several systems to transfer inputs into final product form efficiently and

effectively. It is also called TPS, which stands for Toyota Production System. Its concept

can be depicted as an entire building which comprises of different parts is incorporated.

This building can be called a The House of Toyota as well.

  Just In Time: It is considered as one of the two primary mainstays of TPS. It

indicates to the conveyance and manufacturing of "what is required, when is

required, and in the sum required in the system".

1. The Pull System.

2. Continuous Flow Processing.

3. Take time.

 JIDOKA: It is considered as one of the two primary mainstays of TPS. It

indicates to be able to stop the production whether by a machine or man.

4. Outbound Logistics

It means gathering, putting away and disseminating the item to purchasers. The finished

product is the production process output at the plant. For instance, the dealer of Toyota

receives a car after it has been sent directly, it is for nearby, or locally (not crossing the

ocean in distribution). However, if sending is to export or by more distant, container is

used for the delivery.

 5. Marketing and Sales

Giving a methods and motivating force which enable purchasers to buy the item. In the

utilization of the Toyota Company or its item dispersion channels to utilize aberrant,

appropriation systems is utilized or wholesaler.

6. Service

In order to maintain or enhance the product value, providing service is a critical issue.

The Best Total Ownership Experience is a rule that is constantly conveyed at each line by

Toyota, beginning from the focal office to the Toyota dealership in India on each spread.

The main concept for them is that they consider customers are number one, the thing that

makes them continually attempting and striving to address customers’ issues, needs and

enhance improve services.

There are parameters that set six pieces among others, which are: the service quality, the

service is user friendly, service initiation, type of problem, service delivery, in-service

experience and service advisor.

Support Activities

1. Firm infrastructure (Facility)

Toyota factory has an infrastructure that is extremely sophisticated and modern. It is a

mechanical system with operators, who are the humans. There is the need to the support

in the production until the sale is accessible with whole situation, then the factory to the

dealer.

"Vehicle model by model, we have shared suppliers across plants. Managing a mass

of
packaging assets across locations allows more flexibility rather than doing so at a

plant level" – Brian Bold, Toyota.

2. Human Resource Management

Toyota has around 300,000 staff to this day worldwide. Also, it has approximately 5000

of them in India. The company concentrates on holding a test proceeded with the training,

as per its expertise and disciplines.

3. Technology Development

Toyota is aware of the safety of its customers as one of the largest manufacturers of the

world. It is the reason behind why Toyota does not stop doing safety researches and

developments of its technology. There are four technologies from the company listed

below:

 Pre-Crash Safety (PCS) with impact evasion helps

 Pop-up Bonnet

 Adaptive Driving Beam

 Emergency reaction innovation.

Manufactures put into consideration the importance of develop and build a strong and

long-last relationship with suppliers as it is critical with customers as well. In order for a

company as Toyota to create suppliers who help for the provision of new ideas and who

are loyal, it develops strategies to achieve that.

Toyota’s Challenges

As everyone is aware that the process of manufacturing an automobile is complex and it

involves about 20,000 parts. Toyota has supply chain partners and production facilities

around the globe. The parts that Toyota sources from its suppliers signify a substantial

expenses and of the technical innovation within every automobile.

The strong reliance on its suppliers shows challenge for how Toyota manages supply

chain risk. Despite that Toyota faces various risks; still it approaches disaster and supplier

risks. The "Toyota Way", which the organization concentrates on, underscores constant

enhancement and respect for individuals. The practice is strongly fixed in its procedure

keeping in mind the end goal to incite trust and joint effort with suppliers.
Toyota tries to be proactive so supplier risk is insignificant. It utilizes a comparable

approach for natural disaster risk management. First, it concentrates on individuals and

business recovery second.

Japan's March 2011 earthquake and tsunami were an impeccable case of this. Toyota

concentrated as a matter of first importance on ensuring their personnel were alright and

providing the needed help for affected communities, notwithstanding forbidding their

workers from asking suppliers in the afflicted zones about the impacts on their

organizations in the initial couple of days.

In spite of the fact that the disaster certainly affected the organization and uncovered

risks inside its supply chain, its cooperative approach reinforced the whole organization

by requiring close coordinated effort crosswise over departments in order to rapidly

reestablish operations.

Moreover, it gave the firm the chance to build up a more profound comprehension of its

supply chain and to distinguish previously unexpected weaknesses. Toyota is presently

more pro-active in its risk management and better arranged to manage future crises when

they happen.

However, how do firms assess suppliers when the selection is not frequently determined

by the capacity of a single supplier, but by a supply chain cluster? In fact, the worldwide
firms need to guarantee that the value of suppliers in a region is sufficient to manage

dependability. Moreover, the supply chain varies by district, so the choice to produce

locally or to import regularly resides in whether an area's supply chain has or can

accomplish the required abilities. Another wondering is whether there has been an

adjustment in resource distribution for risk management since March 2011.

Toyota now has a formal procedure to recognize risks and audit alternate contingency

plans. Also, whether the reaction to a supply chain risks is completed in Japan or all

inclusive? (Youthful, The 16th Annual Mitsui USA Symposium), said that a large load

of work is done in Japan, yet North America additionally contributes.

(Mathias, 2015) added that Japan does the hard work, while North America and different

districts stay on high-alert status, prepared to provide help and support. However, the

most interesting questioning is how data security elements into BCP, particularly when a

hacker penetrates a supply chain partner. (Matias, 2015) commented that the move

toward cloud-based capacity is a challenge since servers are not on site. Hitachi looks for

imaginative solutions to deal with the co-location of servers while keeping up

maintaining encryption standards.

All large businesses confront IT risks. Firms need to impart data to suppliers and ensure

that data. Hacking a supplier can uncover expose risk in a supply chain. That data
security is certainly another supply chain risk; Target was hacked through one of its

suppliers.

(Professor Chen, 2015) has commentary about how different risks can influence a firm’s

supply chain. He proposed higher inventory levels, expanded limit, and more prominent

supplier differing qualities as potential arrangements. Be that as it may, those

countermeasures could decrease an association's supply chain effectiveness and increase

costs. He then asked how they consider the trade-off amongst productivity and risk

mitigation.

However, the terms of the trade-off are imperative and the organizations need to put more

in risk mitigation and must consider the potential result.

If firms searched for a mechanism to guarantee that risk management awareness stays

steady, it should see value in risk management. The challenge is keeping up awareness

for lower-risk disasters. Also procurement is constantly about crisis control; however

there is uncertainty about how extreme and widespread crises will be.
Summary

The Corolla’s Supply Chain is illustrated in the following:

Value Chain Management

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