In the automobile industry catering to the global markets, the problem is more aggravated for supply management as the parties who may have established relationships with each other for just in time based operations and lean operations might be geographically far apart. Essentially the companies need to be close in order to take advantage of the Toyota Production System as depicted by the development of the Toyota City, but even if representative or subsidiary offices are present in regional locations, it is possible for the management to be residing in far off regions.
It also has to be highlighted that in the supply chain management models employed in the automobile industry which are based on the just in time oriented relational model., the relationship between the parties is complex and crucial as compared to the contractual agreement whereby the relationship between the parties is formal and limited to the amount of benefit the two parties can attain form their agreement with each other. “Using general typologies developed by Harland, it is clear that the automotive industry does not lend itself to being fully and easily analyzed with the traditional pipeline view. This approach uses the tier-type and linear relationship classification method and fails to adequately cater for the complexity of the chains. Many of the component manufacturers supply to other fellow suppliers, the vehicle manufacturers and the after-market secto
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