Toyota Supply Chain Management

Toyota Supply Chain Management

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Toyota Supply Chain Management

The manner in which the Toyota Company manages its channels and flow of the raw materials and inventory of the working place all the way to finished products influences the amount of profit or losses that the company incurs in a given fiscal year. This supply chain depends on a number of factors, and over the past few years, the company has had to grapple with low profit margins following the disruptions in its supply of raw materials. This occurred between the 2011 and 2012 following events such as the earthquakes in Japan, floods in Thailand and explosion at the Dow Jones chemical plant in Germany combined with the general reduction of the nylon supply. These factors affected the production capacity of the company leading to a sharp decline in its profits. According to Toyota financial data of (2013), the company recorded a decrease in its return on revenues, return on capital, return on assets as well as the return on product quality and the equality ration of the shareholders after an extended period of relatively stable profits. The table below shows the approximated figures of the financial performance of the company over the last decade.

A decade long Financial Performance of the Toyota Company

The lessons learned during the down times of the company led to adjustments by the

Management in attempts to improve the chain management and some of the approaches made towards achieving this include the adoption of the lean philosophy of production. This focuses on the reduction of the wasteful use of raw materials as well as proper management of the waste products generated in the production process. Lean philosophy concept also focuses s on elimination of the superior customer care system as this enables the ease of communication between the clients and suppliers of the company.

The company is trying to incorporate...