logistics & supply chain project

Bachelor of Arts in Business Studies

Course Id: AL_BBSTD_D3

Subject: Logistics & Supply Chain Management

GROUP SUBMISSION

Student Number Student Name

1. A00173730 Cian Nolan

2. A00191651 Helene Nzoua Nze

3. A00097223 Clodagh O Neill

4. A001173062 Laura Nugent

5. A00169360 Luiz Otavio Cacado Patrocinio

Logistics & Supply Chain Management 2012

IndexIntroduction…………………………………………………………………………………..3

Carrefour………………………………………………………………………………….….4

Toyota………………………………………………………………………………….……..5

Carrefour Supply Chain …………………………………………………………….……….7

SWOT Analysis Carrefour………………………………………………………………….10

Toyota Supply chain………………………………………………………………………...14

SWOT Analysis Toyota……………………………………………………………………..18

Comparison of Supply Chains Straights…………………………………………………….22

Recommendation Toyota……………………………………………………………………24

Recommendation Carrefour…………………………………………………………………26

Bibliography…………………………………………………………………………………28

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IntroductionSupply chain is critical point inside organisations, an effective management in this sector can lead the company to success, by cutting costs such as inventory costs (applying programs such as “Just-In-Time”); and when well-coordinated with logistics management can provide a competitive advantage for the organisation.

In the following pages are going to be analysed two organisations’ supply chains: one is a service company, Carrefour, and the other is a product organisation, Toyota. All its components are going to be dissected, so it is going to be possible to have a clear idea about its construction and how it works.

After companies’ supply chain has been broken down, it will be possible to do perform a SWOT analysis to understand better which are the strength points and the weak ones inside companies’ supply chain; analysing: the Strengths (characteristics of the supply chain that give the company an advantage over others); the Weaknesses (characteristics that price the company at a disadvantage relative to others); the Opportunities (external chances to improve performance in the environment); and the Treats (external elements in the environment that could cause trouble for the business).

Once companies’ supply chains strengths has been settled, is possible to compare both, analysing if they have the same strengths points or if each company has a different approach and focus its forces in distinct aspects. It will be studied if there are differences forced by each company industrial sector. It is possible that a service sector requires from the companies diverse strengths than those demanded by products industrial sector.

After all are going to be presented some recommendations that may be useful for the companies, it could be something that is not working and must be disabled or changed; or something to be implemented to improve the effectiveness and quality of companies’ supply chain.

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Carrefour is a French retailer company founded in 1958 and today the world’s second-largest in the business and the largest in Europe. The Carrefour group currently has over 9,500 stores, either company-operated or franchises and it can be consider an international retailer.

The first Carrefour store opened on 1 January 1958 in suburban Annecy near a crossroads (carrefour in French). The group was created by Marcel Fournier, Denis Defforey and Jacques Defforey and grew into a chain from this first sales outlet. In 1995 it merged with Promodès, known as Continent, one of its major competitors in the French market. Marcel Fournier, Denis Defforey and Jacques Defforey had attended several seminars in the United States led by "the Pope of retail" Bernardo Trujillo, who influenced them to move forward with Carrefour idea.

The Carrefour group was the first in Europe to open a hypermarket, a large supermarket and a department store under the same roof. They opened their first hypermarket on 15 June 1963 in Sainte-Geneviève-des-Bois, near Paris in France.

In April 1976, Carrefour launched a private label Produits libres (free products, libre meaning free in the sense of liberty as opposed to gratis) line of fifty foodstuffs, including oil, biscuits (crackers and cookies), milk, and pasta, sold in unbranded white packages at substantially lower prices.

A pioneering entrant in countries such as Brazil (1975) and China (1995), the group currently operate in three major markets: Europe (7,691 stores, from which 4,594 are in France) Latin America (725 stores) and Asia (383 stores). With a presence in 32 countries, over 57% of group turnover derives from outside France. The group seeks to support local suppliers, with some 90-95% of the products on its shelves sourced locally, depending on the country.

In May 2011, Carrefour reviewed its situation under conditions of stagnant growth and increasing competition in France from rivals including Casino Guichard-Perrachon SA, and planned to invest €1.5 billion ($2.1 billion) to change the supermarket with the new concept of Carrefour Planet in Western Europe.

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Toyota Motor Corporation is a Japanese multinational automaker headquartered in Toyota, Aichi, Japan. It is the eleventh largest company in the world by revenue and the largest automobile manufacturer by production (8.6 million units); in July 2012 the company reported that it had manufactured its 200 millionth vehicle. The Company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create automobiles; today Toyota Motor Corporation group companies are: Toyota, Lexus, Daihatsu and Hino Motors, along with several non-automotive companies.

The company had hard time during the global financial crisis that started in 2007, with a net loss of US$4.2 billion in 2009. On November 5, 2012, Toyota reported that its global net earnings for the quarter ended September 30 surged 572.1% to US$3.2 billion compared to the same period last year, showing that the Company has recovered from the difficult period.

Toyota's management philosophy has evolved from the company's origins and has been reflected in the terms “Lean Manufacturing” and Just In Time Production, which it was instrumental in developing. Toyota's managerial values and business methods are known collectively as the Toyota Way. In April 2001 Toyota adopted the “Toyota Way 2001”, an expression of values and conduct guidelines that all Toyota employees should embrace. Under the two headings of Respect for People and Continuous Improvement, the Company summarizes its values and conduct guidelines with the following five principles: Challenge, Kaizend (improvement), Genchi Genbutsu (go and see), Respect, and Teamwork. According to external observes, the Toyota Way has four components:

Base your management decisions on a long-term philosophy, even at the expense of short-term goals.

Create continuous process flow to bring problems to the surface. Use "pull" systems to avoid overproduction. Level out the workload.

Build a culture of stopping to fix problems, to get quality right the first time. Standardized tasks are the foundation for continuous improvement and employee

empowerment.

Use visual control so no problems are hidden.

Use only reliable, thoroughly tested technology that serves your people and processes.

Grow leaders who thoroughly understand the work, live the philosophy, and teach it

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to others.

Develop exceptional people and teams who follow your company’s philosophy.

Respect your extended network of partners and suppliers by challenging them and helping them improve.

Go and see for yourself to thoroughly understand the situation (genchi genbutsu).

Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly.

Become a learning organization through relentless reflection and continuous improvement.

During the years Toyota has introduced new technologies including: one of the first mass-produced hybrid gasoline-electric vehicles, of which it says it has sold 2 million globally as of 2010; Advanced Parking Guidance System (automatic parking), a four-speed electronically controlled automatic with buttons for power and economy shifting, and an eight-speed automatic transmission. Toyota, and Toyota-produced Lexus and Scion automobiles, consistently rank near the top in certain quality and reliability surveys.

Toyota has factories in most parts of the world, manufacturing or assembling vehicles for the local markets. The Company has plants (manufacturing or assembly) in: Japan, Australia, India, Sri Lanka, Canada, Indonesia, Poland, South Africa, Turkey, Colombia, the United Kingdom, the United States, France, Brazil, Portugal, and more recently, Argentina, Czech Republic, Mexico, Malaysia, Thailand, Pakistan, Egypt, China, Vietnam, Venezuela, the Philippines, and Russia. In 2002, Toyota initiated the "Innovative International Multi-purpose vehicle" project (IMV) to optimize global manufacturing and supply systems for pickup trucks and multipurpose vehicles, and to satisfy market demand in more than 140 countries worldwide.

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Operations and Supply chain on Carrefour

Suppliers:Nowadays the Carrefour group has about 50 main suppliers around the world. Since its creation, its aim is to participate to different economies’ countries in which they set up. Therefore it favors the local suppliers. So, 80% of products sold are provided from local companies. This idea comes from the policy of “Carrefour Quality Lines and local products dedicated”. Indeed stores in different countries have links with home providers: for example in European countries like France, Spain and Italy the group developed their own brands. In Italy the brand is now 10 years old.

It also created solid partnership with its suppliers by helping them to improve their activities through regular audits which measure their performance in quality, safety, environment, social responsibility, etc. They equally support them with many tools such as dedicated websites or enable them to access to useful information.

Moreover, as the group is engaged in quality of product, it organizes trainings for their suppliers to teach them new European instructions. So, many European an Asian suppliers received trainings to prepare them for technical developments and to help them design more energy-efficient products as part of the Group’s continuous improvement policy. Furthermore Carrefour controls working conditions of their suppliers. To do this, it collaborates with the International Federation of Human rights since 1997 to reinforce its control on social practices of their providers. Thanks to this collaboration a chart was written, then today all their suppliers are signatory of this one.

Finally, apart from this relationship between Carrefour with its suppliers, it is also important to know that the group got involved to accompany their providers in sustainable development

thanks to a tool of self-assessment available on internet developed by them.

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Operations supply chain and LogisticsAs all companies of distribution, the supply chain strategy of Carrefour group is based on “reduction cost” and “rapidity in transportation and information” and recent years it is also focused on the environmental.

To reach these objectives, in 2009, it decided to create “Consolidation warehouses” which allow to pool stocks and enable suppliers to deliver in a unique place. From that place it can stock up its warehouses with full Lorries and multi-delivery trucks. Then from warehouses, goods can be transferred to different stores. In 2010, 11 centers of these platforms had worked and 380 suppliers provided them. This method enables them to reduce transportation movement and costs in comparison with their farmer standard which was “Factory=> warehouse=> stores”. Carrefour equally encourages its suppliers to be organized between them to pool their deliveries in warehouses.

In addition, Carrefour set up an efficient information system which is made up by many elements for a good organization in its logistics and to achieve rapidity. Indeed with its Electronic Data Exchange, it has available an exhaustive and reliable information allowing it to reduce considerably the human intervention in data processing, and thus makes it faster and more reliable. Then, the Message Implementation Guide with which the group can share information with their providers; the local scorecard measuring performance and opportunities to make operational excellence, etc.

Finally concerning with the environmental aim, the group choose to favor many multimodal ways to carry goods instead of road only; in other word it uses for the same route, railway, river traffic, air freight, etc. Thanks to this method in 2010, 4,000 Lorries and 900 thousand of Kilometers were saved in France. Then the road transport is maximized thanks to the filled and multi-delivery trucks as explaining above. Other criteria were developed to reach the environmental target: coordinating delivery schedules allowing to run several daily trips, move delivery times to the afternoon or at night, unloading by the driver or creation of delivery bays to deliver outside the opening hours of the store; improving upstream and downstream synergies through the development of backhauling (round trips): after lorries have made their deliveries to stores, they reload at nearby suppliers to supply Group warehouses instead of returning empty; synergies between deliveries to hypermarkets and deliveries to other nearby store formats (supermarkets, convenience stores and cash & carry).

Through those criteria the company succeeds to save 7,000 Lorries on the roads and 4,500 tons of CO2.

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Its storesCarrefour developed 4 kinds of stores (Hypermarkets, supermarkets, Convenience and Cash Carry stores) to sell their goods and given that nowadays internet is growing more and more, customers can buy any type of goods online. These storehouses were elaborated in order to be closer than customers who are families, professionals and small companies. As well it targets to satisfy their needs. Now the group owns about 9500 stores around the world. The group currently operates five main grocery store formats:

Hypermarkets: in 1963, based on the innovative idea (everything consumers needed could be found under one roof, displayed on self-service shelves that allowed them to compare products and prices), Carrefour was the first banner to open a hypermarket. Today the company is the world’s leading hypermarket chain with more than 1,450 stores across the world, with its shelves continually replenished with new products and services. The Company has the strategy to match the different lifestyles, with locations in town centres, in the outskirts of cities and in rural areas, hypermarkets feature layouts and products offerings that meet the requirements of their customers’ varied lifestyles and different ways of shopping.

Supermarkets: with 3,000 stores in 19 countries, Carrefour Market makes day-to-day shopping easier by offering a wide range of food products adapted to local needs. It offers to customers a wide selection of products (mainly food products) bringing together traditional market features with stalls of high-quality fresh produce and fast-moving consumer goods. The modernity of the format, the variety of products on offer and the possibility of finding one’s favourite brands all help to develop customers’ loyalty to their Carrefour market supermarket.

Convenience stores: its aim is to offer everyday shopping closer to customers. Out of a total of 9,000 stores, Carrefour had more than 5,000 convenience stores, mainly held by franchisees. The franchisees benefit from everything the banner has to offer, including customer-targeted concepts, products providing the best value for the money, and services and operating staff dedicated to sharing their expertise.

Cash & Carry: what the Atacadão (a Brazilian brand of Carrefour group) cash & carry model is aiming to do in Brazil is to offer high-quality products in large quantities, both for professionals and individual; it combines all the advantages of wholesale and hypermarkets. In France there is another Carrefour group brand: Promocass; it is the leading cash & carry franchise in France and its promise is to make easier work for catering and food industry professionals.

E-commerce: In 2011, Carrefour bolstered its food e-commerce solutions in a number of countries. In Spain, for example, 90% of households can now order food products online and have them delivered. At the same time, the Group has been developing the Carrefour drive concept, a system whereby customers can order food products online and then pick them up at a collection point in their local Carrefour store.

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Carrefour SWOT on the Supply Chain

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ThreatsOpportunity

WeaknessStrengths

Technology,Distribution,

Locality

Locality,Distribution,Cash & Carry

Transport,Labour,

Regulations

Emerging Markets,

Increase non-food Sales


Strengths Technology

In Brazil Carrefour’s website is considered as Top 6 in merchant websites. Carrefour’s new mobile My Shopping application (released between the28th of September and the 31 st of October in two locations in France) has revolutionised how we will shop. Customers can now choose home delivery or they can choose to go and pick up their shopping from any one of Carrefour’s drives throughout France. Customers then select products by using their mobile phone to scan in the barcodes from the wall of images. Payment is exclusively by credit or debit card using their phone.1 This means that the retail shops may need less space to hold stock by the use of JIT when they receive orders from this mobile application, thus decreasing the need and the cost of land. Last but not least there is the Message Implementation Guide with which the group can share information with their providers; the local scorecard measuring performance and opportunities to make operational excellence.

Distribution

Carrefour is a world leader in distribution around the globe. They currently operate four main grocery store formats: hypermarkets, supermarkets, cash & carry and convenience stores. The Carrefour group currently has over 9,500 stores in 32 countries, either company-operated or franchises2 with sales of 66.3 Billion in 2012 so far. In 2008 Carrefour’s new governance structure that enabled them to move more fluidly and effectively to respond with increased speed.3 This was accomplished by the first step in implementing RFID into their supply chain.4 They plan to address the issue of privacy by giving the customer the choice to remove the tag from the product after purchasing, thus maintaining the customers trust in the company.4 The use of O.S.A strategy (On shelf availability) will insures that the right product is in the right place all of the time. Carrefour also use information sharing because is a huge part of implementing OSA because Carrefour’s suppliers need to know how many products they need to produce and when to have it delivered.5

Locality

Carrefour seeks to support local suppliers, with some 90-95% of the products on its shelves sourced locally, depending on the country. This gives them a competitive edge with their logistics as the suppliers for the products are closer to the stores.2 In addition, by supporting local employment in the areas where the stores are situated, Carrefour will have a great company image.

1 http://www.carrefour.com/cdc/group/current-news/carrefour-launches-two-virtual-stores.html 2 http://www.carrefour.com/cdc/group/our-group/ 3 http://www.carrefour.com/cdc/group/history/ (the 2000’s, 2008)4http://www.google.ie/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCkQFjAA&url=http%3A%2F %2Fwww.eifonline.org%2Fsite%2Fdownload.cfm%3FSAVE%3D1326%26LG%3D1&ei=-6efUJXqLMSQhQfTxoDwAQ&usg=AFQjCNGWzQBNHsSqG6PZAvRj2ke8JSzmAA 5 http://www.carrefour.net/en/articles.html?t=69

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http://www.carrefour.net/en/articles.html?t=69

http://www.google.ie/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCkQFjAA&url=http%3A%2F%2Fwww.eifonline.org%2Fsite%2Fdownload.cfm%3FSAVE%3D1326%26LG%3D1&ei=-6efUJXqLMSQhQfTxoDwAQ&usg=AFQjCNGWzQBNHsSqG6PZAvRj2ke8JSzmAA



http://www.carrefour.com/cdc/group/history/

http://www.carrefour.com/cdc/group/our-group/

http://www.carrefour.com/cdc/group/current-news/carrefour-launches-two-virtual-stores.html


Weaknesses Locality

By using local suppliers as their 1st tier suppliers, Carrefour puts themselves at a disadvantage when compare to similar chain stores like Wal-Mart. Carrefour have to pay a premium for their goods where as Wal-Mart work on cost effectiveness. There are some advantages in using local suppliers but, the main disadvantage is the cost. Another disadvantage of using local suppliers is that they may be inexperienced and have trouble meeting demand. If this happened Carrefour would lose potential customers because the product would not be on the shelf.

Distribution

The RFID tags and scanners are of great benefit to Carrefour but it is possible to get interference from other radio wave signals in the air. This could potentially block the RFID from working in a specific area. This can damage the initial visibility that they aim to achieve.

Cash & Carry

Cash and Carry shops sell large quantities of goods at a lower price similar to a wholesaler. “These stores are franchised and not so developed.” This is a weakness to Carrefour that will need to be addressed. With the economic downturn that most of the European countries are having customers will be looking for better value and Carrefour’s Cash & Carry stores could raise their sales.

OpportunitiesEmerging Markets

Carrefour has been continuously opening stores worldwide. If their supply chain can manage all of these stores and more, then there would be an opportunity to expand in the many markets. One of which is the Indian market. Although there are cultural challenges, like haggling for example, Carrefour could thrive in India.6

Boost non-food Sales

Carrefour is originally known for their grocery chain stores, but the technology market is growing rapidly. If Carrefour can make use of their already effective supply chain to incorporate more technology based products, they could potentially increase their sales by at least 5%.

6 http://yousigma.com/comparativeanalysis/carrefourswot.pdf

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http://yousigma.com/comparativeanalysis/carrefourswot.pdf


Threats Transportation

Rising oil prices are a huge threat to Carrefour’s Supply chain because they will not be able to sustain the same prices on their products when their expenditure rises. Although this is a huge factor, it has less of an impact on Carrefour due to the use of local suppliers.7

Labour

Rising Labour costs can also have an impact on Carrefour’s supply chain by way of their overall expenditure. If labour costs continue to rise, Carrefour will need to increase the prices of their products and possibly lose customers in the process.8

Regulations

The laws and regulations are subject to change to a more eco-friendly environment. Carrefour, being a multinational business may experience some difficulties in keeping up with these regulations in all of the countries they are in.

7 http://www.youtube.com/watch?v=US5lO1HfmEo 8 http://yousigma.com/comparativeanalysis/carrefourswot.pdf

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http://yousigma.com/comparativeanalysis/carrefourswot.pdf

http://www.youtube.com/watch?v=US5lO1HfmEo


Operations and Supply chain on ToyotaToyota’s supply chain is the result of the Company’s culture; and must be seen in whole with the manufacturing philosophy inside the organization (Lean Production), which shortens the time between the customer order and the product build/shipment by eliminating sources of waste. That can be noticed in the Company’s President Statement; about the definition of waste:

“Anything other than the minimum amount of equipment, space and worker’s time, which are absolutely essential to add value to the product.”

Fujio Cho

Cash to Cash: Toyota, Inventory Management and Heijunka

Both Accounting and Supply Chain professionals rely on cash to cash (C2C) measures to make processes more efficient and cost effective. C2C is generally the number of days it takes to convert the expenses for raw materials into payment for the finished product. Many factors influence this, including inventory management, supplier performance, and collection of accounts receivable. For supply chain professionals, it measures the efficiency of the entire process, from suppliers, to manufacturing, through to order fulfilment.

Toyota has successfully implemented a C2C system, its operational success is often attributed to the focus on reduction in inventory. The term Toyota uses for their system is “heijunka”; translated from Japanese, it means “make flat and level”. In particular, it refers to eliminating spikes in demand, but also crating operational efficiency and reducing overall supply chain costs. The Company’s lean operation focuses on the idea of buy one, sell one. Toyota is able to manufacture vehicles in about the same order customers buy them. This adaptability to demand has given Toyota the advantage of carrying the least inventory in the field of auto manufacturers.

Toyota uses internally the concept of working with suppliers, requiring them to improve the overall C2C cycle. In the North American auto supply market, suppliers working with Toyota perform at higher levels than those working with U.S automakers. The Company works with suppliers to teach them the lean manufacturing techniques used in its manufacturing facilities; ensuring a short amount of time between when Toyota needs a item and when the supplier makes it.

Using small batch production, a short lead-time can be achieved. Rather than running large batches and keeping excess inventory, plants quickly run a small batch and keep inventory low. For Toyota, this translates to being able to better meet customers’ demands because manufacturing facilities do not have to wait on a particular part before beginning production on a vehicle.

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Benefits of Heijunka

Toyota’s improvement in its supply chain benefits the automaker in many ways:

Inventory levels at parts distribution centres have decreased by 53% from stocking levels in the 1980’s.

Since 1994, the inventory turn of parts in the average dealership has increased from 3.7 to 5.7.

Toyota dealerships have achieved 20 to 40% reductions in floor space utilization. The time spent improving the systems of suppliers shows results as well. From 1997 to 200 alone, supplier on-time delivery increased from 76 to 93%. 66% of suppliers on daily order status are able to deliver within five days or less. While inventory management is an effective way to reduce the C2C cycle, it not only

requires efficient manufacturing, but also effective forecasting.

Toyota operates as a complex web, the carmaker (known as original equipment manufacturer or OEM) sits at its centre. Next come the tier-one suppliers, such as Bosch, Delphi, Denso,

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Continental, Valeo and Tenneco, who deliver big integrated systems directly to the OEM. Fanning out from these are the tier-two suppliers who provide individual parts or assembled components either directly to the OEM or to a tier-one supplier. On the outer ring of the web are the tier-three suppliers who often make just a single component for several tier-two suppliers. Although there are thousands of tier-two and tier-three suppliers around the world, their numbers have been culled over the past decade as Toyota and the tier-ones have worked to consolidate their supply chains by concentrating business with a smaller number of stronger companies. By and large, the relationships between the OEMs and the tier-one suppliers run smoothly; when problems crop up, it is usually with the other suppliers.

Toyota revolutionised automotive supply-chain management by anointing certain suppliers as the sole source of particular components, leading to intimate collaboration with long-term partners and a sense of mutual benefit. By contrast, Western carmakers tended either to source in-house or award short contracts to the lowest bidders. The quality Toyota and its suppliers achieved made possible the “just in time” approach to delivering components to the assembly plant.

One top purchasing executive says that consolidation, the need to trim capacity and the shock to demand that began in mid-2008 have put the weaker parts of the supply chain under great strain: A consequence of Toyota's breakneck expansion was that it became increasingly dependent on suppliers outside Japan with whom it did not have decades of working experience. Nor did Toyota have enough senior engineers to keep an eye on how new suppliers were shaping up. Yet Toyota not only continued to trust in its sole-sourcing approach, it went even further, gaining unprecedented economies of scale by using single suppliers for entire ranges of its cars across multiple markets.

The automaker has remained lean while its volume has increased dramatically since the days when the company's principles and methods were established. Thus, Toyota can no longer maintain sufficient support and quality control, especially as it adds new suppliers around the world. Toyota's recalls have involved fantastically large numbers of vehicles, which some critics say is the result of reliance on single suppliers that provide common components for many platforms and vehicles. The lack of a second supplier means it can’t easily switch sources.

The Company organizes many of its suppliers into clusters based on geographic location; then parts are picked up from those suppliers by trucks on a milk rout and delivered to regional cross dock. At cross dock, parts are unloaded and staged for each assembly plant and then loaded to trucks which take parts directly to each plant. After the parts are unloaded, the truck is reloaded with the corresponding empty returnable containers, which flow in reverse route. Toyota takes responsibility for procuring parts from supplier, which increases reliability on inbound logistics. The majority of transport of raw material is done through trucks, since suppliers stay close to the plants.

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Picture 1 Toyota inbound logistics planning


The Plant is subdivided into shops; the vehicle is born in the body shop where the frame and body are formed. The body parts are stamped in the stamping shop by presses, when the body has been assembled, it moves to paint shop. After painting, it moves to final line where supplier parts are installed to make finished vehicle.

The dealers are responsible for selling the vehicles produced by the manufacturer to the retail customers. Toyota’s sales model is designed so that a high percentage of vehicles is sold from a relatively low level of dealer stock.

In Japan, Toyota currently maintains separate dealership sales channels, called "Toyota Store" that was established in 1949, which sells large luxury sedans like the Toyota Century, and the Toyota Crown, that was originally established to sell the Toyota Corona and the Toyopet Toyoace truck in 1956. Currently, the “Toyota Corolla Store” was renamed from the “Toyota Public Store”, which was established to sell the Toyota Publica in 1961, then renamed to sell the Toyota Corolla in 1966. In 2004 Lexus sales network replaced Toyota Vista; some former Vista models were rebranded as Lexus, like the Toyota Altezza and the Toyota Aristo. “Toyota Nets Store” is being repositioned to resemble the North American Toyota network, called Scion and is currently exclusive for the Toyota 86. Toyota also has a directly sale channels; it is possible to buy a Toyota’s car from its site.

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Picture 2 Toyota outbound logistics

Picture 3 Toyota Distribution model


Toyota SWOT on the Supply Chain

Strengths

Tier-Ones

The tier-one suppliers, such as Bosch, Delphi, Denso, Continental, Valeo and Tenneco, deliver big integrated systems directly to the OEM. Toyota and the tier-ones have worked to consolidate their supply chains by concentrating business with a smaller number of stronger companies. By and large, the relationships between the OEMs and the tier-one suppliers run smoothly; when problems crop up, it is usually with the other suppliers.

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ThreatsOpportunity

WeaknessStrengths

Tier-ones;Long-term partnes;

Transportation;C2C;

Adaptability to demand.

Quikly expansion;

Trust in new suppliers.

Transport;Labour;

Regulations;Reliance on

single suppliers.

Different Toyota Stores in

new markets;RFID.


Long-term partners

Toyota revolutionised automotive supply-chain management by anointing certain suppliers as the sole source of particular components, leading to intimate collaboration with long-term partners and a sense of mutual benefit. By contrast, Western carmakers tended either to source in-house or award short contracts to the lowest bidders. The quality Toyota and its suppliers achieved made possible the “just in time” approach to delivering components to the assembly plant.

Toyota uses internally the concept of working with suppliers, requiring them to improve the overall C2C cycle. In the North American auto supply market, suppliers working with Toyota perform at higher levels than those working with U.S automakers. The Company works with suppliers to teach them the lean manufacturing techniques used in its manufacturing facilities; ensuring a short amount of time between when Toyota needs an item and when the supplier makes it.

Transportation

The Company organizes many of its suppliers into clusters based on geographic location; then parts are picked up from those suppliers by trucks on a milk rout and delivered to regional cross dock. After the parts are unloaded, the truck is reloaded with the corresponding empty returnable containers, which flow in reverse route. Toyota takes responsibility for procuring parts from supplier, which increases reliability on inbound logistics

C2C

Toyota has successfully implemented a C2C system, its operational success is often attributed to the focus on reduction in inventory. The Company’s lean operation focuses on the idea of buy one, sell one.

Adaptability to demand

Using small batch production, a short lead-time can be achieved. Rather than running large batches and keeping excess inventory, plants quickly run a small batch and keep inventory low. For Toyota, this translates to being able to better meet customers’ demands because manufacturing facilities do not have to wait on a particular part before beginning production on a vehicle. Toyota is able to manufacture vehicles in about the same order customers buy them. This adaptability to demand has given Toyota the advantage of carrying the least inventory in the field of auto manufacturers.

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WeaknessesQuickly expansion

One top purchasing executive says that consolidation, the need to trim capacity and the shock to demand that began in mid-2008 have put the weaker parts of the supply chain under great strain: A consequence of Toyota's breakneck expansion was that it became increasingly dependent on suppliers outside Japan with whom it did not have decades of working experience. The automaker has remained lean while its volume has increased dramatically since the days when the company's principles and methods were established, Thus, Toyota can no longer maintain sufficient support and quality control.

Trust in new suppliers

Toyota not only continued to trust in its sole-sourcing approach, it went even further, gaining unprecedented economies of scale by using single suppliers for entire ranges of its cars across multiple markets. Toyota have enough senior engineers to keep an eye on how new suppliers were shaping up. It is difficult to Toyota to continue to support and control the quality as it adds new suppliers around the world.

OpportunitiesDifferent Toyota Store in new markets

In Japan and in the USA, Toyota has created different distribution channels; separate dealership sales. It could be a great opportunity to enlarge this model in new markets, like Brazil, India, China, Russia; were people are getting richer and with more purchasing power. By separating dealership sales it would attract possible costumers of a luxury sedan to a more luxury store; by the other hand its simpler models would be sold in a less extravagant store, avoiding scaring less wealthy people.

RFID

A good example for Toyotas distributors is GulfStates, which saw the necessity and opportunity to improve its system by adopting RFID.

Gulf States, however, faced a problem: it was handling more and more vehicles—185,000 last year alone—and the supply chain was becoming more complex, with cars and parts coming from an increasing number of countries; as a result, its supply chain costs were rising about 10 per cent a year. The company was using employees to walk the lot to find specific cars for dealers, and to take those cars from one station to another to install various accessories. Staffers used radios to communicate, but orders were often backed up because stations were out of particular parts.

Here's how it works: each vehicle arrives with a work order listing which accessories need to be installed. In some cases, one accessory must be installed before another; that information is written into a software rules engine. Other accessories can be installed in any order. So when a bar code is scanned on, say, alloy wheels, that information is sent to IBM's Data Collection Software, which passes it on to the rules engine; allowing the dealer a more efficient way to move cars through the facility.

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ThreatsTransport

The majority of transport of raw material is done through trucks, since suppliers stay close to the plants. So rising oil prices are a huge threat to Toyota’s Supply chain because they will not be able to sustain the same prices on their products when their expenditure rises. Although this is a huge factor, it has less of an impact on Toyota due to the use of local suppliers.

Labour

Rising Labour costs can also have an impact on Toyota’s supply chain by way of their overall expenditure.

Regulations

The laws and regulations are subject to change to a more eco-friendly environment. Toyota, being a multinational business may experience some difficulties in keeping up with these regulations in all of the countries they are in. Another problem could be in the design of Company’s cars, once they need to pollute less.

Reliance on single suppliers

Toyota's recalls have involved fantastically large numbers of vehicles, which some critics say is the result of reliance on single suppliers that provide common components for many platforms and vehicles. The lack of a second supplier means it can’t easily switch sources.

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Comparison of Strengths

Comparison- TechnologyToyota has modern and innovative management solutions such as Just in Time (JIT), lean management and Toyota Production System. Toyota was pioneer in applying of Just in Time, it also created lean manufacturing based on lean management systems which helps to arrange and manage production line and whole company. Toyota has huge experience in using tools such as TPS which is also well known in the business environment.

Carrefour uses more modern technologies such as RFID which makes data available to you if your stock is at re-order level. RFID helps Carrefour very effectively to control efficient warehouse management. This in turn improves Carrefour supply chain performance.

Comparison- DistributionToyota owns its own distribution channels. They have 4 major distribution channels around the world: Asia, America, Europe and Australia. Toyota do not outsource any other distribution companies.

Carrefour outsources its distribution companies to delivery outside Europe. Carrefour relies on third-party logistics providers to manage its supply chain in most of its global operations like when it delivers into far countries such as Brazil and China

Suppliers As stated above, Carrefour seeks to support local suppliers, with some 80% of the products on its shelves sourced locally. These longstanding partnerships offer sustainable opportunities that help small businesses to develop. The reflects de France brand involves 150 companies and generates sales of more than 300 million euros.9 This also gives the many Carrefour companies a competitive edge with their logistics as the suppliers for the products are closer to the stores.

On the other hand Toyota use on site suppliers which is similar to Carrefour in the way that their suppliers are close to the company itself. It has been said that Toyota’s philosophy is to look at their supply chain and production with the perspective that they are a unified whole rather than individual practices, with the aim being integration and adding value.10

The suppliers on site are regarded as part of Toyota and regularly share forecasting data through EDI to ensure Toyota has enough parts to meet production.”10 Toyota’s plant has quite a long range forecast for their production which is then refined as the date of production draws nearer. Once the production date is five days from production, the forecast is clear and this is what the suppliers are required to provide. The efficiency of Toyota’s forecasting is continuously improving and Toyota are hoping to get to a stage where a seat for example could be made and matched up to a particular vehicle, days or hours before being installed.10

Carrefour’s choice to use local suppliers has a clear advantage and disadvantage when in comparison to Toyota’s on site suppliers.

9 http://www.carrefour.com/cdc/responsible-commerce/our-social-and-ethical-approach/the-group-and-its-suppliers/ 10 http://www.laa.asn.au/pdf/ldaarticles/GH1.pdf

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http://www.laa.asn.au/pdf/ldaarticles/GH1.pdf

http://www.carrefour.com/cdc/responsible-commerce/our-social-and-ethical-approach/the-group-and-its-suppliers/

http://www.carrefour.com/cdc/responsible-commerce/our-social-and-ethical-approach/the-group-and-its-suppliers/


1.1 AdvantageCarrefour’s policy has led to the development of Carrefour Quality Lines (395 in 2010) and ranges dedicated to regional products in Europe9 whereas Toyota’s on site suppliers have given them more leeway with their JIT production line. Toyota is also well known for their quality. Although they have had problems with recalls in which Carrefour do not.

1.2 DisadvantageCarrefour’s local suppliers may ensure quality goods, but it can be costly and cut into their profit margin whereas Toyota manages to keep a lean approach which reduces their costs and protects their profit margin.

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Recommendation ToyotaToyota is an example of the importance of a successful logistics and supply chain management; it is the prove that a combination of lean manufacturing and a strong relationship with suppliers can reduce inventory and supply chain costs, and give a higher level of quality for the Company’s products. Is considered that Toyota revolutionised automotive supply-chain management; by anointing certain suppliers as the sole source of particular components, leading to intimate collaboration with long-term partners and a sense of mutual benefit.

But after analysing Toyota’s supply chain, through a SWOT analysis, is possible to see that the Company has a few points, which can be improved; it has also some opportunities to grow and some threats to be watched over, so it will not have a negative impact in the Company.

Quickly expansion and Trust in new suppliers as single onesFor many years Toyota had worked together with its suppliers, expanding its work culture, “The Toyota Way” among its supply chain, by building long-term relationships with its partners. It worked really smoothly when Toyota had a considerable small share of the market; and the Company was able to keep a straight quality control; and could rely on single suppliers, which were used to work with the Company’s culture.

When Toyota had a quickly and huge expansion, it had to rely on new suppliers to answer the demand of its cars, which were not use to work with the Company; and because of the massive quantity of products and pieces, Toyota is not able to keep the same quality control. As result of that, there was the big Recall of Toyota cars.

Toyota should have two different approaches on for short-term results and another one looking for long-terms solutions. As an immediate solution for the recall problem Toyota could rely in more the one supplier, so if there is a problem with some piece it would not affect all its cars. Seeking a long-term result, it would be helpful if Toyota insert some engineers and other professionals, which are expert in the Company’s culture, inside its new suppliers to build up a new reliable link in the Toyota’s supply chain.

Different Toyota Stores in new marketsToyota could expand the Japanese and North American separate dealership sales, into new markets, where people are getting richer and with more purchasing power, like Brazil, India, China, Russia, etc. Lexus are luxury sedans, and it is common that its consumers expect a different kind of treatment regarding the one given to cheaper cars’ consumers; so a new store to sell only Lexus would useful for these new costumers. By the other hand, less purchasing powered consumers could find little bit tempting to buy a low price car in the same place where someone is buying an extremely expensive one; so different distribution channels could be the answer to conquer new markets.

RFID There are two important uses for RFID inside Toyota’s supply chain. One is already used for some distributors, such as North American GulfStates, which use this new technology and

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have already achieved a more efficient and cheaper way to move cars through the facility. It could be a good idea to standardize this to all Toyota’s distributors, that could improve Company’s outbound supply chain management, cut labour costs and prevent human errors.

The other possibility would be the implementation of RFID on the inbound supply chain management. Some experts in this technology say that it is very important that the organization, which is willing to implement it, has already a lean manufacturing culture. Toyota is more than expert on that; it has the entire basis to introduce RFID among its supply chain, principally with Tier-ones suppliers.

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Recommendations Carrefour2 Carrefour

2.1 TransportationRising oil prices are a huge threat to Carrefour’s Supply chain. I highly recommend that Carrefour should look into investing in bio fuels for their transportation and/or a business venture. The company is concerned about this treat and it is already working on it; the group choose to favor many multimodal ways to carry goods instead of road only; in other word it uses for the same route, railway, river traffic, air freight; and also through: coordinating delivery schedules allowing to run several daily trips, move delivery times to the afternoon or at night, unloading by the driver or creation of delivery bays to deliver outside the opening hours of the store; improving upstream and downstream synergies through the development of backhauling. The Company should continue and continuously improve this strategy.

2.1 LabourRising Labour costs will have an impact on Carrefour, but it is unavoidable. Our suggestion is to attempt to acquire (through further training or hiring new staff) a higher skilled workforce to maintain value for money.

2.2 Boost non-food SalesAs stated above, Carrefour is originally known for their grocery chain stores, but the technology market is growing rapidly. If Carrefour can make use of their already effective supply chain to incorporate more technology based products, they could potentially increase their sales by at least 5%.

2.3 LocalityCarrefour is at a disadvantage because of their local suppliers when compare to similar chain stores like Wal-Mart. Carrefour have to pay a premium for their goods where as Wal-Mart work on cost effectiveness. Our recommendation is to find a balance between local suppliers and some more cost effective suppliers with recognised efficiency.

2.4 DistributionThe RFID tags and scanners are of great benefit to Carrefour but it is possible to get interference from other radio wave signals in the air. One way to combat this is to figure out if and where this has an effect on Carrefour’s supply chain. If there is an issue in one area, then a possible solution is to revert that section of the chain to its previous system while maintaining the RFID technology in the areas in which it works best.

2.5 Cash & CarryCash and Carry shops sell large quantities of goods at a lower price similar to a wholesaler. These stores are franchised and not so developed. This is a weakness to Carrefour that will need to be addressed. Carrefour need to utilise their cash and carries to strength rather than a weakness. An investment in improving the Cash & Carry shops should intrigue the interest of the discount shoppers.

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2.6 TechnologyIt is important to consider also the Electronic Data Exchange, that has available an exhaustive and reliable information allowing it to reduce considerably the human intervention in data processing, and thus makes it faster and more reliable.

2.7 RegulationThrough some criteria and changes in its transportation system, the company succeeds to save 7,000 Lorries on the roads and 4,500 tons of CO2. It proves that the Company is aware of this threat and they are working on a way to reduce its impact on the environment. The Company should continue and continuously improve this policy.

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Bibliography

Toyota

http://www.toyota.com/

http://fliiby.com/file/337936/gak2i1qrt6.html

http://www.slideshare.net/tiwarimanutiwari/toyota-scm-10242282#btnNext

http://www.just-auto.com/comment/supply-chain-management-and-the-crisis-at-toyota_id102995.aspx

http://www.economist.com/node/15576506

http://www.rfidjournal.com/article/view/1769

http://www.rfidjournal.com/article/print/9823

Carrefourhttp://www.carrefour.com/cdc/responsible-commerce/our-social-and-ethical-approach/the-group-and-its-suppliers/ http://www.laa.asn.au/pdf/ldaarticles/GH1.pdf

http://www.youtube.com/watch?v=US5lO1HfmEo

http://yousigma.com/comparativeanalysis/carrefourswot.pdf http://www.carrefour.com/cdc/group/current-news/carrefour-launches-two-virtual-stores.html http://www.carrefour.com/cdc/group/our-group/ http://www.carrefour.com/cdc/group/history/ (the 2000’s, 2008)http://www.google.ie/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCkQFjAA&url=http%3A%2F%2Fwww.eifonline.org%2Fsite%2Fdownload.cfm%3FSAVE%3D1326%26LG%3D1&ei=-6efUJXqLMSQhQfTxoDwAQ&usg=AFQjCNGWzQBNHsSqG6PZAvRj2ke8JSzmAA http://www.carrefour.net/en/articles.html?t=69 http://yousigma.com/comparativeanalysis/carrefourswot.pdf

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