Toyota and Gm Supplier Relationship Manangement & Kristeen's Cookie Company,
Business Case Analysis: #1
Toyota, Ford, GM and Volkswagen-Some Differing Opinions about working with Suppliers.
CASE SUMMARY:
Toyota Motor Corporation is one of the world’s leading auto manufacturers. Toyota has been approached by two large US automakers, GM and Ford, to join their Internet-based marketplaces where the automakers and their suppliers hope to do business more efficiently and drastically reduce costs by giving the suppliers access to more business and by trading billions of dollars worth of goods and services in the marketplace. Both Ford and GM have embraced the concept of an electronic marketplace for motor vehicle parts and are in fierce competition to enroll large non-US automakers to their camps.
Toyota’s issues with the US automakers proposals to join the Internet marketplace are twofold. One is that Toyota considers Internet marketplace to be only an efficiency road, and not a destination to do the business at. Second issue Toyota has with such proposal is that by joining the Internet marketplace, where virtual “bidding” would occur, Toyota would violate it’s own philosophy on treating suppliers as partners and developing long term relationships, thereby reducing costs and maintaining high quality of parts. The unwritten issue in this case is that Toyota has with the Internet Marketplace is that by acquiring goods and services through this marketplace, quality of the purchased products may be questionable, and although costs per product may be lover, overall, the waste of parts, and overall higher costs, unfit to be used in production, or, used in production and failed during customer operation may be greater than the saving form joining such marketplace.
A separate Issue Toyota has been struggling with is partnership with VW in Europe in attempt to standardize auto parts for cars sold in Europe to reduce production costs, mainly due to almost limited sales volumes. The main point of difference between Toyota and VW is what parts
Toyota, Ford, GM and Volkswagen-Some Differing Opinions about working with Suppliers.
CASE SUMMARY:
Toyota Motor Corporation is one of the world’s leading auto manufacturers. Toyota has been approached by two large US automakers, GM and Ford, to join their Internet-based marketplaces where the automakers and their suppliers hope to do business more efficiently and drastically reduce costs by giving the suppliers access to more business and by trading billions of dollars worth of goods and services in the marketplace. Both Ford and GM have embraced the concept of an electronic marketplace for motor vehicle parts and are in fierce competition to enroll large non-US automakers to their camps.
Toyota’s issues with the US automakers proposals to join the Internet marketplace are twofold. One is that Toyota considers Internet marketplace to be only an efficiency road, and not a destination to do the business at. Second issue Toyota has with such proposal is that by joining the Internet marketplace, where virtual “bidding” would occur, Toyota would violate it’s own philosophy on treating suppliers as partners and developing long term relationships, thereby reducing costs and maintaining high quality of parts. The unwritten issue in this case is that Toyota has with the Internet Marketplace is that by acquiring goods and services through this marketplace, quality of the purchased products may be questionable, and although costs per product may be lover, overall, the waste of parts, and overall higher costs, unfit to be used in production, or, used in production and failed during customer operation may be greater than the saving form joining such marketplace.
A separate Issue Toyota has been struggling with is partnership with VW in Europe in attempt to standardize auto parts for cars sold in Europe to reduce production costs, mainly due to almost limited sales volumes. The main point of difference between Toyota and VW is what parts
Bibliography: 1. Chase, Jacob, et al. (2008), Operations Management for Competitive Advantage, 11th edition. McGraw-Hill, 2