The Toyota Company has been able to make its procurement and production process efficient by employing pull strategy along with just in time production. With the pull strategy the resources like tyre, headlights, small components, fixtures and fittings as well as other smaller parts and raw materials that are sourced by third parties are made available to the assembly line as and when needed in the production process. The supply side of the production process is managed by manufacturing at a pace which enables only enough resources to be made available for the next production stage as required. Any excess or wastage is avoided as it tends to create bottlenecks and idle time lost in waiting. The supply chain of the Toyota Company is handled by a similar method whereby the company ensures that only as many automobiles are manufactured, as are needed in the market. Any excess would affect the pricing mechanism of the car due to the change in the supply and demand side economic. Aside form this the company also encourages its vendors to keep the inventory if automobiles with them, therefore reducing the costs associated with handling of inventory and the depreciating value if the held up inventory as finished goods at the plants and warehouses for Toyota.
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