Answer 1: Toyota should apply its global complementation strategy to its part (component) plants.

By global compensation we mean Toyota motor corporations are Japan top auto manufacturer and have experiences significant growth in global sales over the last 2 decades. A key issue facing Toyota is the design of its global production and distribution network. Part of Toyota global strategy is to open factories in every market it serves. Toyota must decide what the production capability of each of the factories will be, as this has a significant impact on the desired distribution system. At one extreme each plant can be equipped only for local production. At the other extreme, each plant is capable of supplying every market. Toyota used specialized local factories for each market. Toyota redesigned its plant so that it can also export to market that remain strong when the local market weakens. Toyota calls this strategy global complementation Toyotas global strategy is to open factories in every market it serves. Additionally, Toyota has adopted a strategy of global complementation which allows its specialized local factories to export to non-local markets in times of local economic downturn. This allows Toyota the flexibility of capturing the demand of non-local markets to remain profitable. As far as capacity goes, each plant should be designed with the capacity to supply its regional factories, because that is the major role of the component plants Toyota sets up.

Answer 2: Depending upon the location and production capacity of each plant the decision can be made as to produce for all markets or only specific contingency market. Furthermore, By applying the strategy of global complementation to Toyotas part plants, it will have developed parts plants with the flexibility to supply other markets when their local market demand is weakened. For this reason parts plants must be able to supply at least one more market/region than its normally responsible for supplying. Depending on the requirements of global parts, it may be appropriate for parts plants to be able to supply to all markets. But in the case that markets are so differentiated that the ability for a parts plant to provide global supply is cost prohibitive, then a specific contingency market should be designated for each regional parts plant. A component plant in a certain region should only serve markets in that specific region; otherwise costs will inevitably go up. Since Toyota makes different cars in different regions, it is difficult to have for EVERY parts plant to carry parts for EVERY market.