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Value Chain Analysis Inbound Logistics

Paper Type: Free Essay Subject: Marketing
Wordcount: 1104 words Published: 1st Jan 2015

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In this stage, Toyota receives raw materials or parts from both local and international suppliers. For Toyota production plants in Thailand, about 90% of all components in trucks are made in Thailand and 70% of components that made in Thailand are used in sedan. And the rest of components come from China, India, Vietnam, and Japan. They ship components from international suppliers by ships then deliver to production plant by trucks and for local suppliers in Thailand, trucks with full-loaded are used. Toyota makes suppliers making a commitment that they will share any innovation in the suppliers group that produces similar products. This will make suppliers produce better quality parts, more efficiently. Also they use Just-in-time and Milk run in this stage.

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Milk run is the method you use logistics providers to get auto parts from all suppliers in the routes and deliver to production plants. This method can reduce traffic at the production plants. There will be fewer trucks because sometimes many suppliers used to deliver their supplies to the plants but now only logistics providers’ truck with full-loaded of parts from different suppliers. Also, this will make inventory level decreases, because you will receive the parts many times a day, instead of getting a big lot once in a while. So cost in traffic management and holding cost decrease.


After receiving components from suppliers, now production plants put all the parts together at their own production plants in Sum Rong, Gateway and Baan Poh. This can be called as Lean manufacturing which involve of Just-in-time, Jidoka and Kaizen

For Just-in-time or JTI, Kanban has been used to help achieving. Kanban tells you what to produce, when to produce and how much to produce by handing cards along in the production process. So you won’t produce if the previous production process hasn’t passed you the card, which also could not get started if there is no demand from customers. Also it could reduce lead time, which satisfies customers, because it can respond to customer demand immediately. Furthermore, no stocking occurs in the production plants.

Jidoka can reduce defective goods by detecting the production process closely, so if any problem occurs in the assembly line, the production line will be stopped immediately, fixed and make sure that it will not happen again. When less defective goods occurs, the production system becomes more reliable, the chance that customers will get defective goods will decrease, satisfaction increases.

Kaizen is used to improve all functions continuously. It starts with idea generations, then test the best with the standardized process, if it is good, they will apply that idea to the old process. The key in this method is to keep improving, never stop generating ideas and test to see whether it is a good idea. By Kaizen, it creates value to customers because they will get better and better product from the improvement in production process.

Outbound Logistics

After the company has produced the cars, the main purpose they want to do next is to sell their cars. However, through this point they need marketing and sales, distribution of the products, as well as customer services.

In the distribution process, Toyota will wait for the customers’ demand. Most of the car will be parked at the parking lots in which they are waiting for the purchasing orders from the dealers. For the cars that already have purchasing orders from customers, they will be parked at the cross docking area and will be sent to the customers as fast as possible. And around 15 % of the cars that have been parking in the park lots will be sent to the near parking lots for further sending to the dealers

In Thailand, there are 119 dealers with 319 showrooms that Toyota production plants in Thailand have to serve. For this outbound logistics in Thailand, Toyota has developed a system called Vehicle Logistics which is a cluster deliver. In the past, one truck can carry 3 large-sized cars and 6 small-sized cars. In nowadays, it is improved so that one truck can carry 4 large-sized cars and 8 small-sized cars. This also helps save the transportation cost for the company as well as reduces carbon dioxide emission to protect the environment which is one of the Toyota’s purposes.

Marketing and Sales

In the customer orientated fashion, at this stage the Toyota has prepared the offering to satisfy the needs of targeted customers and the society. They provide the cars at an affordable price for ordinary people, at the same time also keep satisfaction in terms of comfort, styling, handling, safety, fuel economy, and environmental sensitivity.

For the marketing activities, Toyota Motor Thailand has done a lot in this part including, advertising through mass media like commercial advertising on television, internet, etc. Apart from that, there are also many other project activities like Short Film project, Road Safety projects, as well as other CSR projects (Toyota Mangrove Reforestation Project, Stop Global Warming Project, etc). Moreover, Toyota also creates online-society for which their customers can share things between each customers and the company which is called “e-Toyota Club”.

With there projects, there relies a marketing efforts in which Toyota has provided the firm with the best means to reach the target audience as well as to create brand awareness.

After-Sales Services

In the past, the focus has been on everything leading up to the sale. In recent years, Toyota has been more and more focus on service after the sale. Express Maintenance is a perfect example. The company took a closer look and discovered other ways to improve back-end profitability. As part of this process, the company has started the term express service, which entails: Quick service, Fast repair service, and Car spa service.

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The Car spa service program is still in the process of being rolled out to the dealers, but it has excellent potential for increasing customer satisfaction while building customers for life. However, the concept of Car spa service is that operating a vehicle in Thailand can be hard on that vehicle since this program has to provide a full range of services to keep the car looking like new.

So, all of these different elements of the program help Toyota owners maintain the quality of their vehicle – plus, the service is being performed by someone they trust: their Toyota dealer.


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