Executive Summary
This report was based on the case study “supply chain challenge in post-earthquake Japan” found in Bozarth and Handfields’s introduction to operations and supply chain management. Further expansion and thorough explanation have been carried on with the fundamental issue of foolproof supply chain proposed by Toyota. It mainly included three dimensions of enterprise sense, production and management appended by other detailed recommendations. At last, conclusion was made that supply should be in accordance with the request and all activities in a business should rely on the rules of market and public needs. The foolproof means a lot of things ranging from the abstract concept to specific deeds and operations at any time in any detailed behaviors. At the end of the report, necessary evaluations and forecasting of the proposed project have been reflected so that more reasonable and effective outcomes and great success can be achieved.
Contents
1.1 Significance of the report 2
2.1 The disaster in March 2011. 3
2.2 The analysis of the main factors 3
3.1 The brief introduction of foolproof supply chain. 3
3.2 The evaluation of the project 4
4.1 overall thinking patterns 4
5.1 Material supply—multi-channel and diversification. 5
5.2 Inventory—flexibility between understocking and overstocking. 6
5.3 Sale—combination of domestic and transnational market 6
6.2 Reform of the management model 7
1. Introduction
1.1 Significance of the report
after reading the case study “supply chain challenge in post-earthquake Japan” found in Bozarth and Handfields’ introduction as well as learning and exploring the lectures of chapter 9 to chapter 13, this report will present overall analysis of the status quo of the automotive industry in Japan so as to conclude the main factors resulting into the decreasing and ineffectiveness with the ultimate purpose of proposing some insightful and practical recommendations for the industry. For this target, this report will emphasize on three fields of recommendations, namely the concepts, production and management.
under the guideline and requirements of the report, all contents will be arranged systematically and specifically as the followings: the first chapter is introduction to show the background, method and significance of the report; the second chapter occupies the description of the current condition especially projecting troubles the industry is facing and deducing main factors; then from the third chapter to the seventh chapter general and specific recommendations will be worked out for the industry; and the next chapter concentrates on assessment of the recommendations and the conclusion of the last chapter will be given to make a summary of the main content and highlight the crucial issue once again.
2. Status quo of the automotive industry after earthquake
2.1 The disaster in March 2011
It was reported that severe destroy has been triggered by the unexpected natural disaster in May in 2011 in Japan. The earthquake and tsunami wreaked havoc on the automotive supply chain. Toyota, Honda and Nissan lost many thousands of units to the natural disaster, which meant that car buyers here in the U.S. sometimes had a difficult time finding and buying certain vehicles. We know how these disruptions hurt sales, production and expansion of market. .
2.2 The analysis of the main factors
Of course, the falling and failure of the industrial market result from various factors covering from the general direction to detailed tiny act. After profound exploration and analysis of the different phenomenon of the disaster, the main factors can be concluded and extracted gradually. The most projecting and fundamental factor is the lack of philosophical and business concepts which take the center court in the formulation and implementation of any policy and proposal. Among those concepts, what the industry severely lack are the overall thinking sense, out-of-date production model and inefficient management system. The following parts will deal with this more detailed and specifically.
3. Recommendations
3.1 The brief introduction of foolproof supply chain
Extracted from the lecture, a general and instructive project has been mentioned and introduced at large, with name of foolproof supply chain. Since the basic meaning of foolproof is equivalent to the all-side, well-designed plan so that it is easy to be used and carried out without any misunderstanding or mistakes. Thus, the foolproof supply chain refers to a well-established system of organizations, people, activity and resources involved in moving a product or service from supplier to consumer. According to Toyota, the main characteristics of his foolproof supply chain includes four parts, namely Standardisation of parts for other cars in a relatively united system with multiple sourcing, More plants to manufacture rather than specialised management, certain operating independence should be given to Each region and the weakening of the absolute authority of the leaders and the acceptance of diverse risk from other completers and sections and the last inventory renovation based on the real market.
3.2 The evaluation of the project
The new project, proposed by the famous Toyota must have taken all elements and into considerations including its specific operation in different stages and its functions of course. The advantages are the most prominent proved from its involving three main fields’ renovation of concept, production and management and even other additional merits can be seen from it. More specifically, it has considered the supplier of material, labor, the financial support and the transportation of the product, the sub-industry and the request of the market, the consumer and the global mainstream.
4. Recommendations on concepts
Even though it is impossible for any people or institution to simultaneously all aspects of a problem, changing and renovating sense should be kept in mind at first all the way because it is the mind or concept that take control of people’s behaviors and decisions. If the project is formed and carried out under the logical mind and sophisticated think, more satisfied and favorable outcomes and success will be attained in a short time, and vice versa. In the field of automotive Toyota, philosophical concepts it desperately need are overall thought, consciousness of competition and constant renovation.
Overall mind is one of the most important philosophies for any issue. It asks for many specific rules such as the system continuum of integrity and part, the link of the past and the future, the order sense of priority and the last indifference and the changing and developing mind and thinking pattern to deal with and assess a phenomena whether of the natural or the man-made.
Seen from the evolution of the humans in the long history, the existence and advancement of the humans rely on to a large extent humans’ willing adaptation to the environment and unyielding competition and continuous harmony with the nature. The competition is the nature of all creatures but with the development and entrenchment of high-tech facilities, people’s competition has been weakened and even disappeared since their basic needs has been meet by the advantages of high-techs.
We often say that the strong of a nation depends on the talent and elites and the boom of a nation relies on the technology which is renovated at an astonishingly fast speed. Therefore, the prosperity of Toyota also originates from unstopping and multi-side renovation ranging from the top level to the bottom level, from the inner management to the exterior, from the supplier to the request, from the pre-production to the after-sale.
5. Recommendations on producing
Production is the heart in a series of a chain. Also it is the most complicated sector involving large amount of detailed tiny areas such as the import, the check and the reprocess of raw material, the production of different parts of the car, the production of different types of the car, the storage of the finished car the sale of the car.
5.1 Material supply—multi-channel and diversification
Restrictively restrained by the small territory with limited resources, inadequate labor, and narrow market, expanding international market and cooperating with other nations has been emergently appealed and required. From the deep analysis, it is not its policy of ushering in international market that results into the disaster but its quality has been suspected and found to be substandard. According to experts’ explanation and the company’s sincere admission, the source actually resides in the inferior and the mono-channel of the material for supply. Therefore, the priority should be put on the more restrictive requirements of the export, thorough quality security of the material and the great efforts should be made to search for and appeal to more regions and nations to cooperate to maintain standard and sufficient supply.
5.2 Inventory—flexibility between under stocking and overstocking
Speaking to Inside Line, Chuck Schifsky (2011), an American Honda Motor Co. spokesman, said: “Civic sales are down for one simple reason: Low dealer inventory as a result of a shortage of small parts caused by the Great East Japan Earthquake earlier this year, which nearly halted production of the 2012 Civic… This is a supply problem, not a demand problem. There just isn’t any Civics on dealer lots.” Although the inventory is indispensible for the sustainability of Toyota, too much or too less storage will inevitably do harm to the smooth operation of the whole industry. Overstocking can put much burden on the capital turnover resulting into the slow or the stagnation of the following links while the under stocking doesn’t contribute to exploit the market to set a positive image of the product. Nether could benefit the industry. The degree between them could fluctuate and decision-makers and leaders should guarantee the inventory agree with the tendency of the public need and policy change to make a flexible inventory.
5.3 Sale—combination of domestic and transnational market
The overall thinking mind tells people to link the inner with the outer so as to keep the balance. For Toyota, it has devoted too much time and energy to the outer sale marketing for earning international recognition and set his international reputation for the ultimate lust for hegemony of the world in terms of his automotive industry. Being anxious to achieve quick success and get instant benefits usually goes against its original will and does the opposite. Therefore, the stability and flourish of domestic market is the priority for Toyota.
6. Recommendations on management
To some extent, where there is a rational and effective management, there is a successful company. A good management not only rests with the written regulations established before, but largely lies on the appropriate and feasible management model with a whole participation of all groups of the industry.
Regulations functions well in regularizing faculty’s deeds and mind in some way so as to all unify and devote to the development of the industry. While the fact that it is often overlooked by most people signifies some problems such as the old fashionable style and content, it’s obscure and unsuitable appearance, and some unjust regulations for some certain faculty. For managers, what they should do on regulations are to design more novel and attractive coverage and pattern, to rewrite the regulations based on all faculty’s proposals and preference or other industries’ effective content after comprehensive consultation of different people and exports.
6.2 Reform of the management model
It has been proved that a united and restrictive top-down management doesn’t work well in the changeable globalization and cross-communication. Mutual respect and mutual progress has been the key point and it requires the reform of traditional management model to further divide the power of leaders and return certain basic rights to different sectors so as to stimulate their interest and ambition in their position. Be sure the relative independence and certain link with other sectors. Only in this way will the efficiency of the management model be reached so as to all employee think it is just and rational to be conscious to comply with it.
7. Other recommendations
Profoundly analyzing the foolproof chain supply, we can deduce other detailed recommendations such as the advertisement strategy and after-sale service strategy. The overall thinking pattern also can be used to the advertisement. Particularly in information times, information is valuable and the quicker and more reliable of the information is achieved, the more successful the industry will be. We can imagine what would happen if the advertisement strategy can not defeat others, all efforts before will be in vain or be underestimated. So the full use of the mass media to propagate the business concept, the quality of the product, the policy and advantages of the service will benefit the industry a lot. In addition, it doesn’t stop when the products have been successfully sold and the after-service is necessary and high-weighted because we live in a service-style society.
8. Conclusion
Under the guidance of the contents, the status quo of the automotive industry after-earthquake in Japan presents many problems in different sectors and links of the chain. The deep analysis reveals the fundamental factors of the inefficiency and shortage of business concepts, the weakness of the production and the stagnation of the sale.
Surrounded by the general project of foolproof chain supply, three specific recommendations have been illustrated. The concept level stimulates the consciousness and awareness of setting up a right mind and concept before creating and implanting a project; the production reform tells the industry to balance the pre-production, while-production and after-production and do any thing with an eye of integration and priority; the management level shows the eager reform of the regulation to be in agreement with the mainstream of the society and the characteristics of people’s psychology.
To a conclusion, the report firstly presents the troubles that the automotive industry is confronting and then analyzes what lead to the bad outcomes. Only on the basis of the projecting phenomena and staring with the problems, can specific and useful recommendations be produced and put into effect. With this mental schedule, the next chapters concentrate on the general project of foolproof chain supply with specific explanation from three perspectives of the philosophical concept of overall thinking pattern, competition and innovation, of the production of its material import and check, its inventory and sale, and of the management of its regulation reform and the model reform. Then the following part is about the more detailed advice from the advertising strategy and the after-sale strategy. The last conclusion exposes the main contents and the significance of the report.
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