Case 4

Toyota

1) Where should plants be located, what degree of flexibility

should each have, and what capacity should each have?

Plants should be located at places where it is easy to distribute the

products ie automobiles. As Toyota uses just in time methodology
it is very important that the automobiles be delivered with in
permissible time ie as son as possible. For that the plants have to
be near cities so that the logistics time can be reduced and
products can reach consumers as soon as possible in order to
retain customer confidence.

2) Should plants be able to produce for all markets?

Yes, as the market for automobiles is growing every year by a

significant amount it is very important that the plant should be
able to produce all kinds of vehicles be it 2 wheeler or 3 wheeler or
4 wheeler or commercial heavy vehicles. If this not done then the
company may loose out customers

Case 4
Toyota

3) How should markets be allocated to plants?

Standard allocation should be optimized during planning phase

Adjusted when reviewed either yearly or every two year

4) What kind of flexibility should be built into the distribution

system?

Optimized between regionally factories and their suppliers.

It will be necessary for cost effective distribution to occur between
plants and factories to non local markets.