Toyota: A Global Auto Manufacturer

Overview
Toyota motors corporation is Japans top auto manufacturer Significant sales growth in the past 2 decades The design of global production and distribution network is facing key issues To open factories in every market it serves is part of its global strategy

Overview
Toyota is following Global Complementation strategy. The plants are so designed that it could serve other markets that are not affected when the local markets are weakened Commonality in parts used around the globe has decreased the costs to a great extent During 2009, Toyota recalled 12 million cars using common parts from North America, Europe and Asia

Q.1 Where should the plants be located and what degree of flexibility should be built in each? What capacity should each plant have?
Plants should have the capacity to meet the demand of factories in different regions.

Q 2. Should plants be able to produce for all markets or only specific contingency markets? Plants should be able to satisfy local demand and export to other markets when the local market is weakened.

Q 3. How should markets be allocated to plants and how frequently should this allocation be revised? Markets to the plants should be allocated keeping In view the regional trade barriers and trade agreements. These allocation may be revised when a problem is expected that may affect the distribution and production.

Q 4. What kind of flexibility should be built in

the distribution system? Regional approach should be followed for parts plants and factories. This will help in decreasing the cost of distribution if regions are made to take advantage of various incentives.

Q 5. How should this flexible investment be valued? The regional parts plants will help in Decreasing the logistics cost Decreased lead time - Easy and proper distribution (JIT Concept) -Getting maximum exposure of factors of production .

Q 6. What actions may be taken during product design to facilitate this flexibility? Parts plants should produce the parts with maximum commonality in every region depending upon the needs of that particular region.