Transportation Improvement Plan Research Paper

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Toyota Transportation

Toyota Beginning and Emergence

The Market for the Company

The Major Partners and Suppliers

Toyota Supply Chain

Dedicated Transport Service

The Green Supply Chain

Transportation Planning

Freight Flow of Toyota

Speed

Reliability

The Transport Improvement Plan

Dedicated Transport Service

Route Mapping

Environmental Concerns

Integration of services

Packaging

Division of Duties at the Plant Level for Better Accountability

Mapping logistics flows

The Future of the Transport Improvement Plan

Production by region

Sales by region

Toyota is the biggest single producer and the second biggest producer of cars in the world, after General Motors.

The Toyota Motor Corporation was founded in 1937 by Kiichiro Toyoda. It is headquartered in Toyota city in Japan with regional offices and factories all around the globe. The company primarily manufactures automobiles but also has business interests in robotics, financial services and biotechnology. It employs a huge number of people and is among the top two car manufacturers in the world (http://www.toyota-global.com, 2012).

In April 1935 Toyoda created the first prototype of an engine named, type A. Soon after, the A1 automobile was created. On April 1936 mass production of the A1 and a truck G1, based on A1 began. Thereby, Toyota Motor Corporation Ltd., was established on August 28, 1937 by Kiichiro Toyoda. The letter "d" in the name Toyoda was replaced by the letter "t" for softer sounding, and easier pronunciation.

Toyota's cumulative worldwide motor vehicle production with the production of G1 truck in 1935 to 2011 is approximately 195.7 million vehicles (http://www.toyota-industries.com, 2015). Based on the principles of contributing to society through automobile manufacturing and manufacturing products where demand exists, Toyota has conducted production in 27 countries and regions.

In this study we would examine and prepare a transport improvement plan for the company.

Toyota Beginning and Emergence

After the end of the Second World War, by October 1947, TMC managed to do its first post-war export. It supplied BM trucks to Okinawa, and SA cars to Egypt. To celebrate its one millionth exported car, the Nipondenso Co. Ltd., was established on December 16, 1947, and by 1979 they exported their tenth millionth car. "Toyotism" or the system production created by Toyota is said to be the best and most efficient among the world of automobile production. This is because of the strict quality control, close relations with local communities, selection and training of labor force, clear and liberal relationship between workers, mid and high managerial levels, and minimized hierarchy in the company (Chambers, 2008). This mixture created the perfect base for the evolution of Toyota as a company and its products.Toyota's strict policy of using the most advanced and modern technology in the production of their cars, made the company, as the undisputed leader in the field of technological advance. Toyota's management philosophy has evolved from the company's origins and has been reflected in the terms "Learn Manufacturing" and Just in Time Production. Toyota goes under two headings- Respect for People and Continuous Improvement (Liker, 2004).

Japan's automakers could not count on government protection in the form of high duties or other barriers as they had before the war because American and European auto manufacturers were overwhelming the Japanese market with their economic and technical superiority. Kiichiro Toyoda in the postwar situation compared Japan to England. He had said that the British motorcar industry also faced many difficulties, but its fate would be largely determined by how strongly American automakers felt they should concentrate on small cars. Since American manufacturers were concentrating their efforts on medium-sized and larger cars (Magee, 2007), Toyota's engineersin 1947 completed their first prototype of a small car.

Since, Japanese economy was suffering a severe depression, the Toyota dealers were unable to sell cars in sufficient quantities and thereby they had to pay Toyota in long-term promissory notes as inventories kept accumulating. Toyota was compelled to reduce both production and overhead as it kept falling further into debt, almost to the verge of bankruptcy. Production dropped from 992 vehicles in March 1949 to 304 in May. Voluntary resignation was asked to Toyota employees. President Kiichiro Toyoda himself resigned as well.

Toyota executives visited United States in 1950 to seek new ideas for Toyota's anticipated growth. They brought in the idea of investing only on the most modern production facilities as the keys to advance in productivity and quality. The company soon began to benefit from the increased efficiency. In 1951 (Rubenstein, n.d.), Toyota introduced the first four-wheel-drive Land Cruiser.

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In 1953, the demand for taxis rapidly increased the production of passenger cars rose from 50 units per month to 250 units per month.

The 'Kanban' system (DALLERY & LIBEROPOULOS, 2000) was adopted in 1954 where 'consumers' took parts from stock shelves, and the 'storekeepers' replenished stock to the degree that it was depleted. This became the basis of Toyota's production system. In 1950, Toyota had to make additional investments in manufacturing facilities and equipment, as well take new research and development effort due to the crowdedness of the Japanese market from American and European automobile industries.

Toyota through its rapid motorization brought about a remarkable increase in national income in Japan. Toyota, foreseeing the coming age of large-scale international trade and capital liberalization in Japan, focused on developing sophisticated cars and lowering its production cost though promising to achieve the highest level of quality in production. The expansion of Japan's gross national product improved the growth of auto sales to the Japanese public. Toyota Corolla became Japan's most popular family car in the late 60s (Chambers, 2008).

In 1970, Japan adapted strict laws to set limits on automobile engine emissions. Notwithstanding these laws, Toyota developed a new generation of cleaner and more fuel-efficient engines. Toyota settled on the catalytic converter after going through catalytic systems, rarefied combustion, rotary engines, gas turbine, and battery powered cars; to be the most flexible, promising and successful in producing automobiles that conformed to the world's toughest emissions-control standards.

The Market for the Company

Toyota became second to General Motors in 1980 in terms of total number of cars produced. Although, Toyota made efforts to improve international cooperation between automakers, it still became a target of criticism in the world. Toyota tried to elevate the principal of free competition in the minds of the American people as Shoichiro Toyoda believed the future success of Toyota was dependent on the way it handled public relations with the United States, a nation who was extremely bitter on losing trade battles from the Japan industry. At the same time, Toyoda carefully committed his company to greater international cooperation in both technological and managerial areas (Toyoda, 1987). In 1984, Toyota entered into a joint manufacturing venture with American giant General Motors called New United Motor Manufacturing, Inc. (NUMMI).Thisallowed Toyota to begin production in the United States cautiously at a time of increasing protectionism, as well as learn about American labor practices.

By the beginning of 1990, Toyota sold more than one million cars and trucks in the United States itself besides commanding an overwhelming 43% of the Japanese car market. Soon, Toyota tried solidifying its global operations, especially in Southeast Asia and Latin America as the burgeoning demand for cars promised much growth. In the mid-1990s Toyota outsold market veterans BMW, Mercedes-Benz and Jaguar with its Lexus LS400 luxury sedan.With the highest operating margin of any carmaker in the world, Toyota was a formidable competitor (Wimmer & Muni, 2012).

Despite favorable moments, Toyota's management strived for improvements. A cost-cutting program was enacted in 1995 that reduced expense account budgets by 50%, limited travel expenditures, and eliminated white-collar overtime. Toyota also moved to less expensive overseas markets, like Great Britain, Pakistan, Thailand, Turkey, the United States, and Japan. Hiroshi Okuda unveiled Toyota's New Global Business Plan, in June 1995 which placed renewed focus on innovation and international expansion (Automotivelogisticsmagazine.com, 2015). Toyota targeted on raising production to six million vehicles a year; increasing Toyota's international market share to 10% and increase its share of domestic market to 40%. These were achieved through the construction of new manufacturing plants in foreign markets, along with an increased emphasis on the "localization" of parts production. Localization was important as it reduced time and expense involved with shipping components across great distances. This enabled Toyota to increase overall automobile production and devote greater resources to research and development.

In 1998, Toyota exported 20,000 vehicle units to Australia and New Zealand. In the same year, it opened a new operation in Brazil, and in 1999 it constructed a transmission production plant in the Walbrzych special Economic Zone in Poland which exported parts to Toyota's manufacturing centers in France, Turkey, and United Kingdom (http://www.toyota-global.com, 2012). In November, 1998 toyota opened its first vehicle production plant in China named as Sichuan Toyota Motor Co., Ltd., a joint venture with the Sichuan Station Wagon Factory and Toyota Tsusho Corp (Liker,.....

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