1) Where should plants be located, what degree of flexibility
should each have, and what capacity should each have?
Plants should be located at places where it is easy to distribute the
products ie automobiles. As Toyota uses just in time methodology it is very important that the automobiles be delivered with in permissible time ie as son as possible. For that the plants have to be near cities so that the logistics time can be reduced and products can reach consumers as soon as possible in order to retain customer confidence.
2) Should plants be able to produce for all markets?
Yes, as the market for automobiles is growing every year by a
significant amount it is very important that the plant should be able to produce all kinds of vehicles be it 2 wheeler or 3 wheeler or 4 wheeler or commercial heavy vehicles. If this not done then the company may loose out customers
Case 4 Toyota
3) How should markets be allocated to plants?
Standard allocation should be optimized during planning phase
Adjusted when reviewed either yearly or every two year
4) What kind of flexibility should be built into the distribution
system?
Optimized between regionally factories and their suppliers.
It will be necessary for cost effective distribution to occur between plants and factories to non local markets.
Operations Management in Automotive Industries: From Industrial Strategies to Production Resources Management, Through the Industrialization Process and Supply Chain to Pursue Value Creation