Toyota - Case Study Toyota Motor Europe Introduction Toyota...

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Case Study Toyota Motor Europe Introduction ± Toyota has their UK vehicle manufacturing plant in Derby where they build the Avensis and Corolla models. Engines are manufactured in Deeside, North Wales. ± The combined investment in these sites is over £1.7 billion, with over 5,500 people employed. ± Toyota currently has 5% of the European car market. COMMERCIAL Risk Management ± The capital commitment and investment required by Toyota suppliers requires long - term relationships to be built between themselves and Toyota. Procurement Strategy ± The Procurement strategy is considered three years prior to a new model production. New technological advancements and the correct suppliers are identified and invited to bid. ± There is early engagement with local and Japanese engineering groups to evaluate existing suppliers and related technology. At this point, Toyota Logistics also ensure they have a suitable infrastructure in the supplier country. ± A Product Specification is obtained from the engineers and whilst exact specifications are difficult to obtain a good specification early on means less risk of cost growth. Toyota also looks to fix unit cost elements with suppliers at this stage. ± It is essential for the buyer to understand the market. They must be able to look for new potential suppliers and analyse the performance of all suppliers. Performance Management ± Large numbers of design changes can occur between design and manufacture. Change is managed via an ‘open book’ policy whereby Toyota understands the structure of the suppliers costs. Toyota insists on visibility of the supply chain through to second tier. ± The supplier profit margin is ring fenced and any variances resulting from design changes are accommodated within the overall economics so as to protect this margin. ± Toyota’s procurement department utilise a graduate intake that receive ground-up training in Toyota methodology and gain knowledge of reasonable costs. In-house comparator studies are also used; Toyota has a wide, international supplier network which provides many opportunities for benchmarking. ± There is tremendous pressure in the car market to reduce costs. It is easy for suppliers to hide their margin as they can allocate costs in many different ways. Toyota uses its trained buyers, with their detailed knowledge of cost structures to confirm that quoted costs are reasonable. ± Early engagement with suppliers is made in the case of any dispute resolution with Toyota
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This note was uploaded on 12/27/2011 for the course FBAE 201 taught by Professor Eefwf during the Spring '11 term at Institute of Technology.

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Toyota - Case Study Toyota Motor Europe Introduction Toyota...

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