Toyota Multinational Corporation was founded in 1937 by Kiichiro Toyoda to create the automobiles. It is a multinational Corporation, and its headquarters is located in Japan. The corporation has employed about 320,000 people worldwide, and it is among the largest carmakers by sale.
Toyota Multinational Corporation is a leading automobile firm, and it operates in more than 170 nations in the world. The company operates in many parts of the world, and its major markets include Japan, North America, Asia, and Europe.
Its main objective and aim are to provide high quality and good customer service to its customer. Toyota is one of the most profitable and successful companies and the world's leading automobile corporations in producing car models. It ranks as building some of the most reliable automobiles according to analysis and surveys.
Outsourcing is the process of hiring another company or individual, either internationally or domestically, to handle business activities for you. It allows a corporation to focus on core competences, cut costs and improve efficiency as well as focusing on other business issues while other details are taken care by outside experts. Outsourcing is achieved when employees and assets are transferred from one firm to another, but not always (Williamson 90)
Toyota Multinational Corporation largely outsource to U.S suppliers since it has a lot of market in the U.S. Therefore, it enjoys tremendous goodwill in the country because they have employed several native employees and learn how to bridge cultural differences that adversely affects other firms in the industry in their relationship with the foreign suppliers.
The firm also outsources in the neighborhood of about 70% of vehicle production, but it controls engineering and design, using suppliers who have proven their ability to maintain quality, continue to innovate, deliver on time and control cost. There a high level of mutual trust that promotes this network with various rewards for timely delivery and not just penalties for delay.
Support staff from Nova, Halifax and service center provides support for the firm during the outsourcing process. The internal system management of Toyota was replaced to enhance efficiency and influence the employees' performance. The outsourcing on more affordable geographic regions such as Nova has a positive impact on the company's general performance (Andreff 21)
Moreover, the company outsources its services to Thailand due to the excellent infrastructure in the country. This enables the firm to import and export transport personnel and products with groups of subsidiaries throughout the region. Thailand offers a wide variety of shipments and air flights to enable efficiency (Kotabe 8)
Toyota Company has changed its business strategies to welcome outsourcing to compete in the market. The firm receives competent staff from other companies who efficiently perform the tasks assigned. It often occurs on occurrences of such disasters as Tsunamis and earthquakes, which affects the firm's operations, especially in Japan.
Toyota Company has diverse suppliers to maintain its business processes. In Japan, the firm buys straight from 200 suppliers who are a major part of the market. The company uses $32 billion annually on suppliers' services and goods in North American market. It receives large part of its parts from the local market, favoring a long-term contract to enable a smooth supply of materials from windshields to tires. Toyota Company selects suppliers whose plants are within a 56-mile range of its processes (Williamson 85)
Toyota has several range of suppliers that include Samsung Electronics, which made a car mode app connecting Toyota radios to Samsung smartphones, Bridgestone Americas to supply the tires for Toyota car models, and Cypress Semiconductor to provide the touchscreen for the Toyota Avalon. Its major supplier is Samsung as it offers a large market for its electronic products that are then supplied to its consumers in the market place.
Subcontracting is a process where a business or individual signs a contract to perform part or all the obligations of another party's contract. It occurs when the main contractor hires a subcontractor to perform a given task as part of the overall task and is often paid for the services rendered by the main contractor. The main concepts are found in civil engineering and building works although the greatest number now operate in information sector and information technology business (Andreff 9)
Supply contracts cannot be casted in stone and thus, sustaining strong links with its top suppliers remains a core priority for Toyota Multinational Corporation. It hands out annual awards to suppliers that surpass performance goals to maintain its good relations with suppliers. In March last year, it awarded its top recognition to TAIHO Manufacturing, OTICS USA, and Fuel Total System Corp as well as an additional 32 supplier firms received an award of excellence. Preceding recipients of the highest citations are TAC Manufacturing as a supplier of shift level knobs, KEIPER for rear seats assembly locks and Tenneco because of exhaust products (Kotabe 10)
The company's subcontractors are short-term of between 5 months and one year. The firm hires the individuals or business over a variety of services to the general contractor who in turn provides such services to Toyota Company. Therefore, the company often hires short-term subcontractors due to the low cost of services (Buckley 88)
Toyota's reliance on U.S suppliers is based on not just saving money but on the quality benefits that occur when the suppliers are close to manufacturers. North American market has 500 major suppliers and thus, the company built its vehicles where they are sold. It rolls out the assembly faster than any other competitor and the supply chain builds for quality as Toyota reaps bountiful cost savings daily.
Toyota Company produces vehicles near where the customers are available and near the supplier where they can get parts easily. The automobile industry is very competitive, and it is important to select suppliers who deliver individual or assembled parts to the customers. Therefore, to maintain a good quality of services, Toyota Company needs to have better communication with their suppliers.
A strong focus at Toyota is the relationship to accommodate the local suppliers. In the U.S, there was no enough volume for Japanese supplier to enter the market, yet their supplier's employed different engineering approach. This has promoted the company's services to its consumers since a supplier can deal with the firm at any place irrespective of the nationality (Andreff 5)
Conclusion
Toyota Multinational Corporation is a leading automobile company in the world. The aim and objective are to provide good customer services, high-quality service, and customer satisfaction. Therefore, it requires outsourcing and subcontracting services from other parties to satisfy their consumers (Buckley 81)
Suppliers are a major component of the firm and hence, good relationships need to be enhanced to promote its growth and efficiency in its operations. The firm has a good reputation with its suppliers as seen by its high levels of sales promoted by the suppliers who have rewarded annually for being the best suppliers in various categories.
Toyota Company majorly outsources in U.S due to its large market size and readily available customers. The availability of infrastructure makes it outsource in such countries as Thailand who exhibits a large market of Toyota goods and services.
Works Cited
Andreff, Wladimir. "OUTSOURCING IN THE NEW STRATEGY OF MULTINATIONAL COMPANIES: FOREIGN INVESTMENT, INTERNATIONAL SUBCONTRACTING AND PRODUCTION RELOCATION*." Papeles de Europa 18 (2009): 5.
Buckley, Peter J., and Pervez N. Ghauri. "Globalisation, economic geography and the strategy of multinational enterprises." Journal of International Business Studies 35.2 (2004): 81-98.
Kotabe, Masaaki, and Janet Y. Murray. "Global sourcing strategy and sustainable competitive advantage." Industrial Marketing Management 33.1 (2004): 7-14.
Williamson, Peter J., and Ming Zeng. "Chinese multinationals: Emerging through new global gateways." Emerging multinationals in emerging markets (2009): 81-109.
