Toyota Case
Expendable versus Returnable Shipping Containers at Toyota Motor Manufacturing, Indiana, Inc.
Logistics 3.4
Malou Nijssen 1510681 February 14, 2008
Laura Oud ….
Teacher: A.R. van Goor
Table of Contents
Introduction
1. Introduction
Toyota Motor Manufacturing, Indiana, Inc. (TMMI) manufactures Toyota’s first full-size truck. In order to make TMMI as profitable as possible there are a couple of fundamental logistical processes that had to be defined. An important decision that had to be made was the use of appropriate shipping containers for the delivery of parts and materials from suppliers.
TMMI has the following three alternatives:
1. Expendable containers with post-use recycling,
2. Expendable containers with post-use disposal,
3. Returnable containers.
The logistical department of TMMI knows that the least cost alternative thus not have to be the best alternative for Toyota on the long run. We were given the assignment of recommending a containerization system for the new truck that will satisfy as many parties as possible. We examined the issue from different point of view and especially considered the consequences for the main suppliers of TMMI, Transfreight, TMMI third-party logistics provider, and the cost for TMMI itself.
To guide the analysis of the three alternatives we made some necessary assumptions. Below you will find a summary of these assumptions:
• Evenly balanced annual production per year is 102,000 Tundra-trucks.
• Daily production volume is 400 Tundra-trucks.
• Production year covers 51 weeks, 5 days p/wk, for a total of 255 days.
• Differences between expendable and returnable containers only appear in weight, durability, damage protection and cost of container.
• Totes owned by a given supplier must be returned to that same supplier.
• Customer pickups are the same for expendable and returnable containers.
For our analysis we examined the prospective usage of four
Logistics 3.4
Malou Nijssen 1510681 February 14, 2008
Laura Oud ….
Teacher: A.R. van Goor
Table of Contents
Introduction
1. Introduction
Toyota Motor Manufacturing, Indiana, Inc. (TMMI) manufactures Toyota’s first full-size truck. In order to make TMMI as profitable as possible there are a couple of fundamental logistical processes that had to be defined. An important decision that had to be made was the use of appropriate shipping containers for the delivery of parts and materials from suppliers.
TMMI has the following three alternatives:
1. Expendable containers with post-use recycling,
2. Expendable containers with post-use disposal,
3. Returnable containers.
The logistical department of TMMI knows that the least cost alternative thus not have to be the best alternative for Toyota on the long run. We were given the assignment of recommending a containerization system for the new truck that will satisfy as many parties as possible. We examined the issue from different point of view and especially considered the consequences for the main suppliers of TMMI, Transfreight, TMMI third-party logistics provider, and the cost for TMMI itself.
To guide the analysis of the three alternatives we made some necessary assumptions. Below you will find a summary of these assumptions:
• Evenly balanced annual production per year is 102,000 Tundra-trucks.
• Daily production volume is 400 Tundra-trucks.
• Production year covers 51 weeks, 5 days p/wk, for a total of 255 days.
• Differences between expendable and returnable containers only appear in weight, durability, damage protection and cost of container.
• Totes owned by a given supplier must be returned to that same supplier.
• Customer pickups are the same for expendable and returnable containers.
For our analysis we examined the prospective usage of four