Toyota's Logistics Cost Management

        Abstract: Tong Fang Global (Tianjin) Logistics Co., Ltd. in full control of the Toyota automobile enterprises in China's logistics business, the logistics cost control and management has established a perfect system, has some referential significance.
        Keywords: outsourcing logistics, the original unit management, cost KPI
          
        Since the proposal of the supply chain concept, more and more enterprises will mainly focus on its core business, have the logistics outsourcing. But the outsourcing of logistics enterprises can meet the requirements, will result in the logistics costs? Different businesses have different experiences. In this paper, Toyota's parts logistics as an example for analysis.
        Was established in October 2007 on the same side Global (Tianjin) Logistics Co., Ltd. (hereinafter referred to as TF6L) as the Toyota car company in China, the total package logistics business, the overall management of the Toyota system, the supply chain involved in the production of parts, cars and aftermarket parts outside the factory such as logistics. As a third-party logistics company, TF6L in ensuring the quality of the logistics, helping Toyota to effectively control the logistics costs have a sound management mechanism.
          
        Toyota Logistics Model Features
          
        Vehicle logistics and spare parts logistics operation although there are many different, but Toyota's management point of view, both have the following common characteristics:
        A monthly amount of stabilization within the logistics;
        2 Set the regional centers, as far as possible combination of main and auxiliary routes logistics model, shown in Figure 1;
        3 Monthly and logistics within the logistics point of line stability;
        4 logistics demands punctuality rate is very high.
          
        Logistics Management Principles carriers
          
        TFGL is a third-party logistics company, is mainly responsible for logistics planning, logistics planning, logistics operation monitoring and logistics cost control, the specific logistics operations by outsourcing the implementation of logistics carriers. TFGL carriers, logistics management principles are as follows:
        1 To avoid the impact due to logistic reasons the production and sale happens, the demand logistics carriers to understand the Toyota production system, and has a higher operational management capabilities and service levels. To this end, TFGL has taken the necessary measures:
        (1) TPS evaluation
        TFGL to understand the mode of production first and foremost as a logistics carriage conditions and in accordance with the requirements of the Toyota production system to produce a detailed evaluation form. TPS (Toyota ProductionSystem) Toyota production system evaluation is the most basic requirement of the carriers, including carriers, transport safety, transport quality, environmental protection, personnel training and transportation risk control process management, a comprehensive evaluation. Through evaluation, not only eliminated unqualified carriers, but also to meet the requirements of the carriers a clear grasp of their own shortcomings.
        (2), the necessary risk control
        In the same type of logistics in the region, using two logistics providers, as much as possible to reduce risk.
        2 pairs of logistics carriers for the cultivation of gradual and orderly progress.
        In practice, the logistics operations, carriers will encounter many problems, such as leaking vehicles, quality impairment, frequent collisions, logistics delay. Problem is not a bad thing, need to find the main reason causing the problem. The TFGL the supervision and guidance to develop specific measures, while gradually improving the process, the carriers of the operation and management capacity improved.
        3 to establish long-term cooperation partnership.
        Pairs of short-listed logistics carriers, TFGL adhering to the Toyota system has always been friendly and cooperative thinking, and does not transport accidents or price of another job to replace the logistics carriers, but take a long-term cooperative approach to improve. Main
        (1) carriers, logistics vehicles, large initial investment, require a longer payback period:
        (2) TFGL question as carriers for their own problems, replace the carriers are not fundamentally solve the problem;
        (3) long-term cooperation with the TFGL carriers can better promote the improvement of activities, such as importing GPS, energy-efficient driving.
        Toyota Logistics Cost Control
        To maintain good cooperative relations on the basis of, TFGL scientific system through the following methods to control the logistics costs, specifically in Figure 2 small.
        1 Cost Planning
        Whenever there is a new type of logistics lines or logistics strategy adjustments, early planning is often the key to the future control of logistics costs. Planning programs require a comprehensive understanding of the amount of enterprise logistics, logistics model, packaging, shape, suppliers, distribution, logistics and general information on all aspects of cost, in addition, but also taking into account the business and suppliers, Jia moments, the enterprise's goods and floor loading area such as logistics constraints. TFGL in the early planning to observe the following principles:
        (1) from start to finish with detailed and credible data;
        (2), after a comprehensive analysis and evaluation, respectively, to develop one or more of several possible options and recommend the best program;
        (3) The program ultimately boil down to reflect the cost of data:
        (4) explain to the business pros and cons of various programs and respect the choice of companies.
        As can be seen from the above points. Most of the program data related to Toyota's business strategy, it must be fully TFGL and mutual trust between enterprises, and have a good day to day communication channels.
        2 of the original units of management
        Toyoguchi the original unit management is a major feature of logistics management, but also Toyota's external logistics cost control basis.
        Toyota to constitute a break down of logistics cost factors, and these factors are divided into two categories, one is fixed (such as investment vehicles, artificial), or relatively stable (such as fuel prices) project, Toyota called the original units; The other is as a change in the monthly line adjustments (such as driving distance, the front of the quantity of inputs, the number of drivers, etc.) projects. Called the monthly change in the information.
        In order to make the original unit to maintain a reasonable and competitive edge of the original unit management the following principles:
        (1) All of the original unit be created through public bidding
        In planning the program on the basis of, TFGL logistics carriers to TPS qualified to tender. The logistics volume of stable phase of logistics, vehicle inputs, driving distance, told the monthly basic information carriers, and provide the standard version of the quotations for the original units of inquiry.
        As the tender is a very time-consuming work, so only new types of logistics demand will arise for the original units of the tender, if it is because of the logistics point of increase in the same region due to line regulation, in principle, follow the existing logistics of the original units.
        (2) periodic adjustments
        Taking into account the factors of the original unit cost of fuel unaffected by the market fluctuations, but also in the proportion of the total cost of running a larger, TFGL regularly (4 times / year), according to official announcement of the change in the amount of fuel prices on the be reflected. For the travel tax, road maintenance fees and other 'other fixed costs' items, carriers have two opportunities to make adjustments every year.
        (3) a reasonable profit margin
        The original unit projects 'management fee' is a source of profit for carriers. A reasonable management fee is the basic guarantee quality, transportation, TFGL will ensure that the cost is reasonable, but require carriers to pass operating and management improvements to increase profitability. And digest the wages of rising costs.
        3 monthly adjustments to the optimal state line
        With all the logistics point of change in the amount of the monthly flow of goods within the region the optimal combination of logistics routes are subject to change. TFGL based on enterprises to provide logistics plan, the rate of last month's stowage position and cost KPl points drawn from the analysis to improve, adjust the monthly change in information in order to maintain the lowest logistics costs.
        4 Cost KPI-driven improvement
        For the safety, quality, cost, environmental protection, on-time rate logistics indicators, TFGL established KPI system to monitor, report to the Toyota carried on, but also the cost to carriers outside the public data. Which the cost of KPI include: RMB / Taiwan (Taiwan: refers to the Toyota production vehicles / engine Number of units), RMB / km * m3, RMB / times and other projects. KPI through cost management, not only to facilitate vertical and horizontal comparison, but also for the improvement of logistics provides the most intuitive basis.
        5 synergistic effect to reduce logistics costs
        TFGL as a platform to manage Toyota's logistics enterprises in China, resources in coordination with various companies on the basis, through the integration of resources, make full use of synergies, greatly reduces logistics costs. For example, bulk purchase and transport insurance, lower insurance costs; through joint logistics, the enhancement of vehicle stowage rates and reduce vehicle operating inputs, so as to achieve cost reduction purposes. In the common cost-sharing on the logistics, the logistics enterprise in accordance with the ratio of the amount of logistics costs to pay. In specific logistics operations, TFGL mainly in two ways to achieve common logistics: different enterprises within the region together in the same set of goods, distribution; each other start and end of the convection logistics.
        The above measures show that Toyota's logistics cost control, the basic idea is to make the logistics cost component detail, data-oriented, through the management and to adjust the various details of the changes in the project to control the overall logistics costs. While under the management of Toyota TFGL level of logistics costs in the industry, not done more, but through cost planning, fine original unit management, cost KPI-driven methods such as improvement and synergy, systematic and scientific logistics cost control, on the imminent or ongoing logistics outsourcing business has a certain significance as reference.