Case Study on Supply Chain Management
In today’s competitive environment, a company’s performance does not depend upon its capabilities alone. In the past decades, what had increased was: outsourcing, supply base reduction and consolidation. This has increased the reliance of buyers on their suppliers and has become the popular manufacturing strategy for companies. It is because of the increased dependence, that how main suppliers perform once in terms of quality, delivery, costs and services, affects the buying company’s performance. For instance, part shortages contributed to long production delays for Boeing’s 747 and 737 airplanes and a resulting loss of over $1 billion (McClenahen, 1998). Therefore, it is critical for a successful firm to understand a supplier’s capabilities and performance potential.
As the fourth-largest automaker in the world, “Toyota is committed to continuous improvement, looking forward to new tomorrows. Built-in car navigation system is getting more popular all around the world since it can provide a more convenient and safer environment for drivers. The aggregation of mapping data, for the navigation systems from Denso, is now available in almost every Toyota model in the UK.” (www.toyota.co.uk) Toyota’s navigation system supplier: “Denso, a $16.2 billion Japanese corporation, is the fourth largest independent automotive component supplier in the world. Denso’s vehicle navigation systems perform complex spatial data processing and were used by car manufacturers such as Toyota, Jaguar and Cadillac.” (www.denso.co.uk) Moreover, Toyota is not the only buyer of Denso; but Denso is the only navigation supplier to Toyota. In this assignment, I will use supply chain theory to analyse how Toyota has managed its relationship with Denso and how Toyota can manage its supply chain better.
Historical background to the cooperation between Denso and Toyota
Navigation system in Denso Read more…