Toyota motor corporation is japan's

Toyota motor corporation is japan's top auto manufacturer and has experienced significant growth in global sales over the last two decades. A key issue facing toyota is the desing of its global production and distribution network. Part of toyota's global strategy is to open factories in every market it serves. Toyota must decide what the production capability of each of the factories will be,as this has a significant impact on the desired distribution system. At one extreme, each plant would be equipped only for local production. At the other extreme, each plan would be capable of supplying every market. Prior to 1996,toyota used specialized local factories for each market. After the Asian financial crisis in 1996/1997, Toyota focused on redesigning its plants so that they could be shifted quickly to exporting to markets that remain strong. Toyota calls this strategy " global complementation."

Whether to be global or local is also an issue for Toyota's parts plants. Should they be designed for local consumption or should there be few parts plants globally that supply multiple assembly plants ?

For any global manufacturer like Toyota, several questions arise regarding the configuration and capability of the supply chain :

1. Where should the plants be located and what degree of flexibility should be built into each? What capacity should each plant have?
2. Should plants be able to produce for all markets or only specific contingency markets?
3. How should markets be allocated to plants and how frequently should this allocation be revised?
4. What kind of flexibility should be built into the distribution system?
5. How should this flexible investment be valued?
6. What actions may be taken during product design to facilitate this flexibility?