Value Chain Model
Toyota is the leading car manufacturer in the world. The company prides itself in making reliable cars that are sustainable. Toyota believes in making a high quality product good for customers and the environment. The global supply chain model focuses on being efficient and following the standards the company has on ensuring the process produces the best product for consumers. Focusing on global and local productions, the company wants to ensure “made by Toyota” gains the trust of all customers. The company is nearing 75 years in business and follows traditions from the past and present. A strong philosophy the company has is focusing on the customer first, which leads to the company making a great car for every consumer in the market. Over the years the company has become more efficient by using value chain management, which has helped the company look at better processes to manufacture high quality cars. One of the processes the company uses is called Total Quality Control. Total Quality Control is where the process is modernized. It ensures employees are following standards of value chain management that leads to quicker production for customers. The company believes in being timely when delivering to its customer. Throughout the world Toyota is known for having a philosophy from an operations perspective that focuses on quality from the start of the process to the end. The company’s values are focused on enriching lives, exceeding expectations, and respecting the planet. These values are used in the global value chain management process which the company uses for all of its global locations.
Components of Toyota’s Value Chain Toyota is a corporation that continuously strives to increase efficiency all while reducing inventory. Through the years, Toyota has taken efforts to improve the risks associated with the company’s supply chains. The resulting factor is Toyota’s Production System (TPS). Toyota’s Production System also known as Just-in-Time (JIT) encompasses the supply chain process and is a component of Toyota’s continuing effort for an effective supply chain management process. According to Toyota (2014), “Toyota Motor Corporation’s vehicle production systems is a way of “making things” that is sometimes referred to as “lean manufacturing system” or a “Just-in-Time systems”, and has come to be well known and studied worldwide” (Toyota, 2014, para. 2). As a result, the TPS process continues to spark interest of businesses throughout the U.S. and other countries around the world.
The competitive advantage Toyota possesses is a solid infrastructure that not only combines the Toyota’s Production System/JIT, but a continuous improvement process, lean manufacturing principles, and Kanban. According to the Manhattan Associates (2008), “The real bang for lean return on investment is achieved by extending lean concepts through the entire supply chain. This comes from the improved execution activities of the entire business, not just the manufacturing functions” (Manhattan Associates, 2008, p. 15). Hence, Toyota incorporates continuous improvement processes, lean principles, and JIT systems not only on the production floor, but also throughout the supply chain operations. Additionally, all of these are key components in Toyota’s supply chain success. Toyota’s managers, suppliers, and employees all buy into the supply chain concepts and apply performance measures across the processes. Consequently, Toyota is one of the few companies that continues the success of extending the lean principles from the manufacturing process to the supply chain. This is where the real value is found.
Toyota has a unique mindset in reference to the components encompassing the company’s supply chain. This incorporates “The Toyota Way”. According to Toyota Management Systems (2014), “As Toyota has globalized, the organization has felt it necessary to document the philosophy and goals that have enabled it to develop