SUPPLY CHAIN

MANAGEMENT OF
TOYOTA INDUS
MOTORS
PRESENTED BY:
Tisha
Syed Samad Iqbal
Mohammad Ammar
Hiba Tufail
Aadil Sattar
Hussain AbdeAli
 • Toyota Motor Corporation was founded
in 1937 by Kiichiro Toyoda.
• It’s headquarter is in Toyota, Aichi, Japan.
• Toyota’s Corporate Structure Consists of
364,445 employees Worldwide.
INTRODUCTION • As of 2016, Toyota is the world's largest
automotive manufacture.
• Toyota was the world's first automobile
manufacturer to produce more than 10
million vehicles per year which it has done
since 2012.
 INVENTORY MANAGEMENT
• Inventory is the number of parts in stock that are required to
manufacture a product. Indus Motors use various methods to keep
track of its raw materials, work-in-progress, and finished goods.
• Toyota uses the Kanban system, a signboard system that conveys
information between processes and automatically orders parts that
are used up. Kanban is a quick response method through which
Just-in-time production is achieved.
• Kanban limits the excess inventory at any point in the production
line as well as makes it easier to understand any deficiencies that
must be overcome on time.
• Toyota’s forecasting demand process helps company to plan its production and inventory. The
company uses forecasting tools and software systems to manage and analyze data.

• Toyota uses computerized inventory tracking system to monitor inventory levels on time.

• Toyota places a high emphasis on producing high quality products that meet customer’s
expectations.
 PROCUREMENT
• The procurement at Indus Motors is similar to the standard worldwide
process Toyota uses around the world for it’s procurement. However, there
are some variations due to local laws and regulations.

• Identifying the need is part of procurement at Indus Motors and meeting the
needs on time.

• Supplier selection is a crucial part where quality standards are to be

maintained along with reliable delivery and Indus Motors has strong focus
on local sourcing of materials and closely working with local suppliers to
ensure quality at competitive pricing.

• Contract negotiation is done as a part of procurement at Indus Motors such

as pricing, delivery schedule and quality requirements. This helps building a
long-term relationship with its supplier and continuous improvement is
gained from supplier development.
• Indus Motors works on cost management as most of the materials are imported so in order to reduce costs
and improve efficiency, the company uses cost analysis to understand the major and minor costs and they
maintain an optimal level of inventory as the rate of dollar is relatively low to reduce their costs.

• Indus Motors has recently switched to SAP to manage the company efficiently by ordering the parts at
the right time at this stage of the economy it is helping them to mitigate risks and procure materials at a
low cost and at the right time and meet customer requirements.
 Planning (Just-In-Time)
• Planning is a strategic part of any supply chain management. Toyota has a reputation world over for its
unique Supply Chain Management system known as the Just-In-Time system or the Toyota Production
System. The motivation behind just-in-time is to reduce stock and make only "what is needed, when
it is needed, and in the amount needed“. Toyota's just-in-time approach allows them to be more
responsive to fluctuating demand. The Toyota Production System operates on the principles of pull
demand systems. This is where the firm seeks to determine what the consumer wants and then produces
based on that information. However, its impact to the cost of production is tremendous.
• Toyota also employs the push system of demand especially when selling new models and selling to those
customers who have not placed their orders.
• In addition to the JIT system, Toyota applies the V4L principles in managing its supply chain. The V4L
principles include the following:
1. Variety in the products developed in order to meet a wide range of market demand therefore ensuring that
Toyota has a large market share.
2. Velocity of the production flow is another key principle. Along with high levels of automation, this
approach enables Toyota to mass produce vehicles and is therefore able to deliver its products, according to
demand.
3. Toyota is also very keen when it comes to the variability of deliveries and orders. It seeks to reduce
variability and accordingly reduce supply cost.
4. Visibility of processes is ensured with the right metrics and consensus before plan changes at Toyota.
Performance metrics weigh 50% for results and 50% for process compliance, rewarding both short-term
success and correct processes. Visibility enables continuous learning and feedback, guaranteeing
synchronization with market realities.
Planning (Heijunka, Stable Production Schedules)
• Heijunka is a Japanese word that means leveling. In Lean
manufacturing, it refers to the leveling of production, aimed at
improving the flow of a process to better match customer demand,
reduce waste, and decrease or quit batch processing.
• First, “demand leveling breaks down the total volume of orders for a
given planning period (1-2 months) into scheduling intervals (weekly,
daily). A Heijunka calculation then defines a repetitive production
sequence for the scheduling interval, which dictates the model mix
scheduled on a given line.”
• Through the use of demand leveling and Heijunka scheduling, Toyota
is able to meet demand, which is often variable, without holding
excess inventory. The main benefits related to Heijunka are: reduced
costs, reduced lead time, maximize resource utilization, and reduced
inventory.
PRODUCTION
 PRODUCTION PROCESS
1. Toyota Indus Motors follows a well-defined sequence of activities in its production process.
2. The production line is highly automated, with robots and machines performing most tasks.
3. Cross-training enables employees to perform multiple roles, ensuring smooth production flow.
4. Quality control is crucial, with multiple checkpoints to ensure the highest standards.
5. The Kaizen culture emphasizes continuous improvement to boost efficiency and reduce waste.
6. The company is committed to environmental sustainability, with efforts to reduce waste, conserve energy,
and control emissions.
7. The economic recession led to a halt in production and low sales, demanding new policies to promote the
automobile sector in Pakistan.
LOGISTICS
 QUALITY ASSURANCE
Toyota is renowned for its high-quality products, and the company has
implemented several quality assurance practices which includes:

• Total Quality Management (TQM): TQM focuses on improving all aspects of

the business, from design and manufacturing to sales and customer service
(dependability and speed).

• Just-In-Time (JIT) Manufacturing: This reduces inventory, lowers costs, and

improves efficiency.

• Kaizen: This involves all employees in the process of improving the

company's products and processes.
• Statistical Process Control (SPC): It is used to monitor and control production processes to ensure that
they are operating within acceptable limits.

• Jidoka: This helps to prevent defects from being produced and ensures that quality standards are
maintained.
 QUALITY CONTROL MEASURES
• Toyota Pakistan has a comprehensive quality control system in place that covers every stage of the
production process.

• The company also conducts regular audits of its suppliers.

• Toyota Pakistan has a dedicated team of quality control experts.

 • Toyota sells its products through dealerships and relies on them to
entice and persuade customers.

• Toyota Indus Motors is one of Pakistan's top automakers.

• Toyota Indus Motors has a large distribution network across the

country, including 43 sales dealerships and 61 authorized service
centers in 26 cities.

DISTRIBUTION • Major cities like Karachi, Lahore, Islamabad, Peshawar, Quetta, and
Multan have Toyota dealerships and service centers.

• Toyota Indus Motors has a smartphone application for booking and

tracking services.

• Consumers can also book their desired car model online and have it
delivered to their home.

• Toyota Indus Motors also has a network of authorized spare parts

dealers across Pakistan, allowing customers to easily access genuine
Toyota parts for their vehicles.
Distribution Process
 CONCLUSION
• Their operations are up to the mark and efficient.
• Toyota has latest technologies and robots for manufacturing.
• Toyota’s supply chain management is embodied in the lean manufacturing concept
developed by the company for efficiency and effective delivery of products all the
markets around the World.
• The significance of Toyota’s supply chain management is valuable and acts as a tool for
efficiency and effectiveness in product and service delivery.
THANKYOU