Toyota: service chain management

Toyota Motor Corporation commonly known simply as Toyota and abbreviated as TMC, is a Japanese multinational corporation headquartered in Toyota, Aichi, Japan. TMC is the world’s largest automobile manufacturer by sales and production.

The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father’s company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota AA. Toyota Motor Corporation group companies are Toyota (including the Scion brand), Lexus, Daihatsu and Hino Motors, along with several “non-automotive” companies in the world.

Toyota Motor Corporation is headquartered in Toyota City, Aichi and in Tokyo. In addition to manufacturing automobiles, Toyota provides financial services through its Toyota Financial Services division and also builds robots.

A replica of the 1936 Toyota Model AA, with the original Toyoda logo

MEGAWEB, Toyota’s permanent exhibition showroom and museum in Odaiba, Tokyo

Toyota started in 1933 as a division of Toyoda Automatic Loom Works devotedto the production of automobiles under the direction of the founder’s son, Kiichiro Toyoda. Its first vehicles were the A1 passenger car and the G1 in 1935. Toyota Motor Co. was established as an independent company in 1937.



In April 2001 the Toyota Motor Corporation adopted the “Toyota Way 2001,” an expression of values and conduct guidelines that all Toyota employees should embrace. Under the two headings of Respect for People and Continuous Improvement, Toyota summarizes its values and conduct guidelines with the following five principles: Challenge

Kaizen (improvement)Genchi Genbutsu (go and see)RespectTeamwork

OPERATIONS: Toyota Pavilion at the Expo in Aichi

The Camry is assembled in several facilities around the world including Australia, China, Taiwan, Japan, Malaysia, Philippines, Russia, Thailand, India, Vietnam and the United States.

Toyota has factories in most parts of the world, manufacturing or assembling vehicles for local markets. Toyota has manufacturing or assembly plants in Japan, Australia, India, Sri Lanka, Canada, Indonesia, Poland, So h Africa, Turkey, Colombia, the United Kingdom, the United States, France, Brazil, Portugal, and more recently, Argentina, Czech Republic, Mexico, Malaysia, Thailand, Pakistan, Egypt, China, Vietnam, Venezuela, the Philippines, and Russia.

CENTRAL PROBLEMWhat more can the company do to further strengthen its service chain? How can Toyota make advances of new technologies to further its competitive position in its service chain? S.W.O.T. ANALYSIS

STRENGTH2nd largest manufacturer of automobiles with combined 15.5 trillion in the fiscal year to March 2003 World –Class supply chain managementService chainToyota has 295 dealerships

WEAKNESSESDepends only on loyal customers who buy & consume services and who would continue to purchase future vehicles from Toyota Toyota not expect the dealers to win the competition in after-sales on their own

OPPORTUNITIESTMC manages the parts centres inventoryDealers may utilize a third party service called ‘part voice” Electronic inventory control systemLean DistributionSupplier BrandDevelop G-Book Scale

THREATHigh percentage of problems with service work at dealers were due to the shortage of parts Dealers who have built their reputation on customer service & have invested a lot in inventory are reluctant TMS (TOYOTA MOTORS SERVICES) does not have visibility or control over inventory levels at the dealerships High level of inventory

Market competition like Daihatsu and Subaru with G-Book service

ALTERNATIVE STRATEGIESOrganize their service chain such as technology development, sales, sales services, with efficiency and effectiveness. Also working with good relationships with supplier as supplier-purchaser partnerships so that to gain quality assurance and get preferred service and that can serve their customers better. To be competitive Toyota should introduce a new product or service that is difficult to copy by other leading competitor. Also the product or service worth more in terms of potential customer appeal.

COURSE OF ACTIONOrganize the service chainGiving direction or specific sequence of activities that creates products and services with value for customers Product or Service Innovation  Creating new services or product to introduce to the market but with high quality, low price and also on-time delivery of goods and services they buy to build lasting relationships with and to add value to customers