Toyota Motor Corporation is Japan’s top auto manufacturer and has experienced significant growth in global sales over the past two decades. A key issue facing Toyota is the design 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 can be equipped only for local production. At the other extreme, each plant is capable of supplying every market. Before 1996, Toyota used specialized local factories for each market. After the Asian financial crisis in 1996–97, Toyota redesigned its plants so it could also export to markets that remain strong when the local market weakens. Toyota calls this strategy “global complementation.”
Provide your detailed thoughts on the following questions:
(1) What are the benefits of specialized facility/equipment? What are the downsides?
(2) Describe a process at your company that suffers from complexity. How could this process be redesigned to be simpler and more straightforward? What are the drawbacks to pursuing simplification? What are the potential advantages?