The paper "Toyota׳ s Coordination Mechanism" Is a great example of a Management Annotated Bibliography. Observed supply chain disruptions and production line shutdowns are recognized as symbolic of weaknesses in industrial SCM and this article discusses the impacts of a supply chain disruption. Matsuo has emphasized on Toyota supply chain, which links the supply of the semiconductors that were affected during the earthquake, that is, Renesas Electronics. The author has analyzed why how Toyota coordination mechanism of the supply chain failed due to earthquake disruption because its production system consists of an integrated architecture and customized components.
However, all suppliers are expected to coordinate for Toyota to be productive. In other words, Toyota achieves high quality, control, and delivery performance through a flowing control mechanism. The authors present the argument of the necessity of having direct control of a crucial part of the supply chain. Supply chain disruption has because a serious issue for many organizations (Sodhi andTang, 2012), as the supply chain is where an organization sustains a competitive advantage in the marketplace for their products and services through the integration and management of other organizations (Tomlin 2006).
In other words, if one of the crucial parts in the chain supply of parts that helps in the production processes to ensure customers' need are met. This paper will review the Matsuo argument and will evaluate the quality of Matsuo's argument and focus on any areas of weakness within the argument. The author has applied a case study of Toyota to give a clear picture of the impacts of supply chain disruptions. Matsuo has divided the paper into three sections.
The first section describes the actions the companies took during supply chain management disruption and the reasons why it took Toyota about three months to recover production level before disruption ( Fujimoto 2011). The author has applied the supply chain management hierarchy to analyze the issue in three sections, that is, design, strategy, and sustainability. According to the case study, Toyota controls the whole of its supply chain using a multi-layered network. In other words, Toyota only interacts with the first layer suppliers, who have contacted the next layer suppliers to get materials to make sub-assembled components to Toyota.
This means that high-level coordination is required for Toyota to work, however, it results in high performance in quality, cost, and delivery. This means that a disruption in the supply chain can lead to huge losses. This was the case during the Tohoku earthquake, where Toyota depended on its first-tier suppliers, Denso to purchase the semiconductors (Tokuda 2008). However, between its first tiers suppliers, there were several suppliers between Denso and the semiconductors manufacturing company. But, the MCU was a single source and the plant was affected by the earthquake, and this took about three months to recover. In the second part, the author analyzed the missing functions of the company’ s mechanism of the supply chain, where coordination starts from the company and move upstream to its first-tier suppliers, and so on.
Due to Toyota's multi-layered structure of suppliers' network, the company was not able to know when the affected manufacturers will resume production. Furthermore, there was no enough information to help in handling supply chain disruption upstream of its supply chain to know whether the missing part can be substituted by another or whether another manufacturer could assemble the missing part.
Matsuo proposed how Toyota should modify its coordination mechanisms for its automotive MCUs using risk management and secure supply of quality chips by adding direct control of key parts (Matsuo 2015).
Carvalho, H & Machado, V 2009, Lean, agile, resilient and green supply chain: a review, In Third International Conference on Management Science and Engineering Management. Bangkok, Thailand: World Academic Press, World Academic Union.
Fujimoto, T 1999, The Evolution of a Manufacturing System at Toyota. Oxford University Press, New York, USA.
Hendricks, K, Singhal, V & Zhang, R 2009, 'The effect of operational slack, diversification, and vertical relatedness on the stock market reaction to supply chain disruptions', Journal of Operations Management, vol. 27, no3, p. 233
Kleindorfer, P & Saad, G 2005, 'Managing Disruption Risks in Supply Chains', Production and Operations Management, vol.14, no.1, p. 53-68.
Matsuo, H, 2015, 'Implications of the Tohoku earthquake for Toyota׳ s coordination mechanism: supply chain disruption of automotive semiconductors', International Journal of Production Economics, 161, pp.217-227
Sodhi, MS, Tang, CS 2012, Managing Supply Chain Risk, Springer, New York, USA.
Tokuda, A 2008, Automotive Electronics and its Standardization, Japan.
Tomlin, B 2006, 'On the value of mitigation and contingency strategies for managing supply chain disruption risks', Management Science, vol.52, no.5, pp. 639–657.
Wakolbinger, T & Cruz, J 2011, 'Supply chain disruption risk management through strategic information acquisition and sharing and risk-sharing contracts', International Journal of Production Research, vol. 49, no.13, p. 4063-4084.