Supply Chain in Toyota and Was-Mart

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Contents

1. Executive Summary3

2. Introduction4

3. Strategic Alliances5

3.1 Basic Concepts of Strategic Alliances6

3.2 Wal-Mart Strategic Alliance6

3.3 Toyota Strategic Alliance8

3.4 Successful Factors of Alliance9

4. Technologies9

4.1 Wal-Mart10

4.2 Toyota11

5. Outsourcing12

5.1 Conception of Outsourcing and Purchasing12

5.2 Toyota’s Outsourcing and Purchasing Strategy12

5.3 Wal-Mart’s Outsourcing and Purchasing Strategy13

6. International Challenges and Risks13

6.1 Toyota14

6.2 Wal-Mart14

7. Sustainable Strategies15

7.1 Conception of Sustainable Strategy15

7.2 Wal-Mart’s Sustainable Supply Chain Management16

7.3 Toyota’s Sustainable Supply Chain Management 18

8. Conclusion19

9. Bibliography20

1. Executive Summary

This report is designed to focus on the supply chain management of Wal-Mart and Toyota, specific on the aspects of strategic alliances, strategic technologies, global challenges and risks and sustainable development, which is analyzed according to the contents from textbooks, journals, reports etc. Many kinds of methods are used to analyze, measure and compare, such as the famous SWOT (Strength, Weakness, Opportunity, Threat), comparative analyzing and summarizing. Conclusions are drawn from the materials listed in the last chapter.

The results of the comparing and analyzing show that the good use of the method of supply chain management and the good application of thinking in a sustainable way can result in not only the reduction of costs but the increase of efficiency and satisfactory level of suppliers and customers. Using different ways to treat different situations and products is considered to be wise and clever. Since there are two many contents relating to the whole process of supply chain management, this report only takes a narrow aspect to analyze the main characteristics of the supply chains of Wal-Mart and Toyota.

It is highly recommended:

• that applying proper methods to manage different kinds of products and deal with various supply chain partners.

• that learning from other successful companies’ cases so as to minimize the negative effects and maximize the positive ones.

• that not only focus on company’s own development but take a responsibility of the whole industry and society.

Though having made a lot of efforts to cover information as much as possible, there stills are some limitations in the analyses because that the supply chain itself is so huge and complex that the details and implications are not available for the private reasons.

1. Introduction

The world itself has stepped into a fast-developing stage these days, thus making the business environment turbulent accordingly. Facing the pressure from both the Internet and the E-business, companies have to not only focus on the traditional aspects such as cost, profit, customer satisfaction as they have always been doing but turn to keep flexible and responsive so as to survive the tough economic situation. As the British statesman Disraeli said, “There can be no economy where there is no efficiency.” People gradually become aware that the coordination and management of all the parts in the supply chain (as shown in figure 1.1) are essential elements to improve the efficiency.

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Figure 1 A simple supply chain (Sanders, 2012)

Recently, all walks of life have been practicing the strategy of supply chain management, and some of them have gained a few certain accomplishments. Wal-Mart, one of the giants in the retail industry, have benefited from the state-of-the-art technology and network of its most efficient supply chain. (Ireland& Crum, 2005) With accurate forecast, efficient transportation and high-quality customer service, Wal-Mart started to boom: within the first 25 years since established in 1962, Wal-Mart has become the largest retailer in the United States (Lichtenstein, 2006). Fortune magazine even said that Wal-Mart was on the top place as the nation’s admired company, as there was no rival in selling general merchandise (Stein, 2003).  

At the meanwhile, the manufacturing industry develops fast in terms of logistics as well. One representative company is Toyota, which has been aiming at creating a high-efficient supply chain. The well-applied methods of the Toyota Way, and the Toyota Production System (TPS) are the key factors for its success. Similar to Wal-Mart, with 344109 employers (as of March 31, 2015), Toyota is also a big enterprise. (Toyota-global.com, 2016) However, the limitation of resources and different levels of transparency in terms of core technology make Toyota a very different mode of supply chain management.

The application of Supply Chain Management has been proven in many ways to be the key role for society’s foundation and infrastructure. However, it is far beyond simple management. It requires professional strategies, methods and technologies to be applied in some sophisticated systems to reduce costs, shorten lead-time, balance risks and so on. Based on typical and successful cases such as Walt-Mart and Toyota, both of which have impressive results in managing their supply chains, we can learn a lot of experiences in practice. So, from the analysis and comparison between them, not only can we have a deeper understanding of the theory of Supply Chain Management, but develop the ability of thinking broadly and sustainably.