Introduction
Over the years, the U. S. auto industry's market has been experiencing fluctuations due to many reasons including: price, quality and foreign competition. General Motors Corporation (GM) which had been the leading car and truck manufacturer had been experiencing declining market share and facing stiff competition from both U.S manufacturers and foreign imports such as the Asian auto producers that included Toyota, Honda and Nissan. The main reason for increased foreign competition was that foreign cars were more fuel efficient, smaller, less expensive, and often more reliable than their American counterparts.
In an effort to eliminate waste and maintain competitive advantages, GM introduced lean manufacturing by incorporating elements of the Toyota Total Quality Production System that had been adopted by several Japanese auto manufacturers to increase production efficiency. The lean implementation effort resulted in both operational and an environment improvement but the company still faced challenges inherent with the automotive supply chain including: risk, visibility, inventory management, cost containment, customer demands and globalization.
GM currently expects its suppliers to adopt a lean philosophy to ensure it becomes the low-cost producer of quality products. It employs Just-in-Time (JIT) manufacturing and utilizes distribution strategies including maintenance of regional distribution facilities and third party management of logistics. [1] An efficient supply chain is no longer capable of handling the complexities of changing global trends hence it is therefore necessary to incorporate a smarter supply chain.
Background and Current Situation
In November 18, 2010, GM completed the world’s largest in...
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...February 2014. http://www.gm.com/company/aboutGM/our_company.html
[2] “General Motors Company: 2012 Annual Report.” General Motors Company. December 2013. http://www.gmannualreport.com/downloads.html
[3] “The U.S. Automotive Industry Needs Updated Finished Goods Benchmarks: Automotive supply chain.” Supply Chain matters. January 17, 2014. http://www.theferrarigroup.com/supply-chain-matters/2014/01/17/the-u-s-automotive-industry-needs-updated-finished-goods-benchmarks/
[4] “Interactive chart: General Motors Company.” money.msn.com. February 27, 2014. http://investing.money.msn.com/investments/key-ratios?symbol=US%3aGM&page=ManagementEfficiency
[5] “The Smarter Supply Chain of the Future: IBM Global Chief Supply Chain Officer Study.” IBM Institute for Business Value. January 2009. http://www-07.ibm.com/sg/manufacturing/pdf/manufacturing/Auto-industry.pdf
Gulfstream Aerospace is one of leading corporate jet manufacturers in the world. They have been building jets since the late 50’s and continue to create top of the line aircraft which have become the status symbol of success. With their success comes an extensive company infrastructure and supply chain. First, we will discuss how Gulfstream uses the location to maximize the effectiveness of its supply chain. Then we will look at the business case for Gulfstream’s approach to its supply chain, and in particular, does it make sense to have a car follow supplies while it is on the rail system. Finally, we will look at Gulfstream’s to the “just in time” manufacturing and its strategic approach to choosing locations.
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer. In order to succeed, managers have to realize that they cannot do it alone and they must work together on a daily basis with the whole organizations in their supply chains. Because supply chain management involves all functions within an organization, managers need to know what a supply chain is, why it is important, and the impact of supply chain management on the success and profitability of their organization. Today, Wal-Mart topped the list of the America’s biggest companies on the Fortune 500 list, “with sales of almost $345 billion — more than a quarter of a trillion dollars” (Forbs). Wal-Mart’s supply chain management is becoming recognized as a core competitive strategy.
One of several aspects of the Toyota production system that differ from The GM system is that Toyota puts a flow into the manufacturing process, while GM has lathes located in the lathe area, milling machines in the milling area Toyota places a lathe, milling machine and a drilling machine in the actual sequence of the manufacturing process.
By 1954, GM had produced its 50 millionth vehicle in the US market and it controls 54% of the US auto market (“GM: History”, 2009. When the 1970s’s hit GM was forced to adapt to new regulations regarding fuel economy and emissions. This marked the peak of General Motors employment and is slow decline due to increasing competition from European and Asian companies entering the US market. Over the course of the 80’s and early 90’s GM acquires portions of Suzuki, 100% of Lotus and 50% of Saab. They also launch an entirely new auto line branded Saturn (Reuters Staff, 2009).
Ferdows, K., Lewis, M., & Machuca, J. A.D., 2003. Zara. Supply Chain Forum: International Journal, 4(2), 62-66.
(5) Liker, Jeffrey K. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. New York: McGraw-Hill, 2004. Print.
Lee, H. L. (2004, October). The Triple-A Supply Chain. Retrieved April 29, 2014, from ftp.software.ibm.com website: ftp://ftp.software.ibm.com/software/emea/dk/frontlines/Tripple_supply_chain_Havard.pdf
After Second World War, Eiji Toyoda and Taiichi Ohno at the Toyota motor company in Japan pioneered the concept of Toyota Production System. The rise of Japan to its current economic pre-eminence quickly followed, as other companies and industries copied this remarkable system. Manufacturers around the world are now trying to embrace this innovative system, but they are finding the going rough. The companies that first mastered this system were all head-quartered in one country-Japan. However, many Western companies now understand Toyota Production System, and at least one is well along the path of introducing it. Superimposing this method on the existing mass-production systems causes great pain and dislocation.
Toyota is a pioneer of the LEAN manufacturing principle. Lean, as a process, is a way to add value to customers while minimizing waste (LEI, 2011). It can also be thought of in terms of flow, which is how Toyota likes to think of it. It is simply a process of decision making where the problems tend to be thought of in terms of flow, reducing starts and stops or unnecessary motion increases flow, reducing waste.
...dge and are better prepared when the situations happen. Also, this article helps with the understanding of needs of the stakeholders that are affected by the supply chain management. When we have a better understanding about a specific topic, it’s easier to come up with solutions to the specific targets or operating departments.
In 1950s, Toyota has developed lean thinking. The Toyota Production System aspires to minimize waste and increase efficiency while at the same time enhances its product quality. From this initiative, Toyota managed to widen its competitive edge by employed fewer employees in the car production with a small number of flaw products.
• While making a methodology is challenging, executing it is considerably more troublesome. Numerous organizations comprehend Toyota Production System now, yet at the same time think that it is troublesome to execute and implement.
...dustry gains by the linkage of it and supply chain management(being supply chain led) as more collaborative approach is provided,knowing no boundaries across firms,including various parties in the supply chain that contribute significantly to improved product quality,shorter lead times,highly responsive supply chain,at lower cost and with increased customer satisfaction levels,and by so doing reveals the significance of the automotive industry.The importance of the automotive industry is largely due to the impact it has on the economy of a country.In terms of South Africa the automotive industry is one of the most influential in terms of its contribution towards of South Africa’s GDP, contributing 6%,accounting for approximately 12% of South Africa’s manufacturing exports, making it an all Important factor in the economy.In 2010,271 000 vehicles were exported.
In brief, Kellogg’s is the world’s leading breakfast cereal manufacturer (The Times 100, 2010). Kellogg’s has manufacturing plants in the UK, Canada, Australia, Latin America and Asia (The Times 100, 2010), thus Levy (2007) settles Kellogg’s must have established an international supply chain as a response to the globalisation in which needs to act responsibly. Furthermore, this essay will also demonstrate Kellogg’s lean production system, and how exploits that. Interestingly, Krajewski et al. (2009) has drawn attention to the fact that lean production is an operations system, which assists to exploit the value of the company, in this case, Kellogg’s activities by eliminating waste. Referencing to Paton et al. (2011) agrees lean production is based on a series of practices which mostly seen at Kellogg’s as a management approach, namely; just in time (JIT) which will be included in this essay. The rationale behind the choice is, The Times 100 (2010) highlights; Kellogg’s lean production enables the rearrangement of processes and removes waste. As it is known that in the supply chain, there are parts where waste can be found (Paton et...
To further accommodate the everyday consumer while boosting efficiency, supply chains are learning to balance the concept of lean versus agile. A lean supply chain makes an effort to remove any non-value added portion or waste to increase production and profit. Lean is a relatively new standard across most industries. With an ever-increasing demand in consumer wants, many supply chains are shifting their focus towards an agile strategy. This will allow more flexibility within an organization to adjust to market demands and to do so in a timelier