Toyota's Supply Chain Management

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Date Submitted: 04/08/2013 10:53 AM

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Firm, Industry, and Strategic Background:

While it is hard to believe, today, only about one-third of the world's population enjoys the benefits of motor transportation, while the remaining two-thirds do not have access to this convenience (Butler, 2012). Huge growth is in store for the automotive industry in the emerging economies. Therefore, tremendous potential exists for quantitative expansion.

In addition, there is also room for qualitative growth, for adding value and improving the quality of the driving experience. Along with continuing initiatives to improve conventional vehicle functions, two major emerging opportunities are intelligent transportation systems, ITS, and in-vehicle mobile terminals. ITS will route traffic more smoothly, reduce the risk of accidents, and make cars more enjoyable to drive. Mobile terminals will bring a major leap forward in the types of information drivers and passengers have accessible on the road (Butler, 2012).

In view of this growth potential, Toyota will continue to place emphasis on maintaining its position as a leading automobile manufacturer. While other manufacturers struggle to meet increasing environmental regulations, Toyota continues to be one step ahead. Toyota remains the most fuel-efficient full line auto manufacturer in the United States and the industry hybrid leader. Since 2006, Toyota’s U.S. manufacturing operations have received 18 Energy Star Plant Awards from the U.S. EPA, recognizing each plant’s energy performance over the past year and scoring in the top 25 percent of the industry. Toyota’s goal is to offer hybrid options on all its models by 2020 (Knight, 2012).

The U.S automotive industry is thought to be shifting towards the European’s 18-18-18 model. In the European market, the top three automakers, Volkswagen, Ford, and Renault, all possess approximately 18 percent of the total market share. In the United States, GM dominated the market...