SCH4801 Assignment 2 (DETAILED ANSWERS) 2025 - DISTINCTION GUARANTEED

SCH4801 Assignment 2 (DETAILED ANSWERS) 2025 - DISTINCTION GUARANTEED - DISTINCTION GUARANTEED - DISTINCTION GUARANTEED Answers, guidelines, workings and references ,.... SECTION A: QUESTION 1 CASE STUDY Please read the case study below before answering any questions. Toyota South Africa's Supply Chain Challenges: A Case Study in Disruption and Resilience Toyota South Africa is a leading automobile manufacturer in the region, with its supply chain serving as a critical part of the company's value chain by ensuring vehicles are produced to the highest quality standards based on incoming orders. This supply chain involves sourcing raw materials and top-notch quality components from global (Japan, North America, Europe and Asia) and local suppliers, assembling vehicles, storing them in warehouses, and distributing them to customers through various logistical channels. Toyota believes in close long-term supplier relationships and yearly hands out awards to suppliers that exceed the performance targets, such as Keiper for their rear seat assembly locks, TAC Manufacturing for their shift lever knobs, Tenneco for exhaust components and Samsung Electronics for the Car Mode App that connecting Samsung smartphones to Toyota radios. Moreover, Toyota focuses on eliminating waste and maintaining high efficiency by applying 'The Toyota Production System' (TPS) as its manufacturing philosophy. TPS enables Toyota South Africa to produce vehicles at a pace aligned with market demand, giving it a competitive advantage over its competitors. However, the complexity of modern supply chains makes them vulnerable to disruptions, which can severely impact operations. Component Shortage Disruption (2019) In 2019, Toyota South Africa faced a significant disruption due to a shortage of key manufacturing components. The issue arose from the company's over-reliance on a single supplier, Auto Parts South Africa (ASA), based in Durban. A large-scale strike by ASA's employees halted the production of essential parts, such as brake pedals, catalytic converters, and fuel tanks, affecting critical models like the Corolla, Fortuner, and Hilux—the latter being the company's best-seller. This resulted in the loss of approximately 6,000 vehicles, as production of 500 vehicles per day stopped, with sales of the Hilux being particularly affected. To address the shortage, Toyota reduced production capacity, temporarily laid off workers, and sought new suppliers. This process required significant resources from the purchasing department and took time, as onboarding new suppliers involved logistical challenges. Impact of Flooding on Operations (2022) In 2022, severe flooding in the KwaZulu-Natal region, particularly in Durban, further disrupted Toyota's operations. Toyota's competitors saw this as an opportunity to enhance their market share, as various Toyota customers, such as Hertz, Avis (rental companies), Toyota dealers, commercial fleet organisations and government entities might need to wait for their special orders. The Prospecton plant suffered extensive damage, with approximately 88% of the vehicles on-site destroyed and production lines SCH4801 ASSIGNMENT 2 2025 Page 8 of 15 severely impacted. Beyond the plant, the floods disrupted the movement of automotive parts and finished vehicles, as the port of Durban, a key logistical hub, experienced delays due to congestion. Toyota reported losses of about 45,000 vehicles, with many new cars rendered unusable due to flood damage. Although port operations resumed quickly, supply chain delays persisted, affecting import and export schedules. Climate change impact Climate change has a major impact on the environment, which leads to unpredictable weather patterns such as flooding. Organisations need to consider their environmental impact and find ways to reduce greenhouse gases. Environmental issues are becoming increasingly important to Toyota. Therefore, Toyota expects its suppliers to be ISO 14001 compliant. Being ISO 14001 compliant requires that suppliers adhere to specific predetermined standards to manage their impact on the environment, mainly caused by the materials they use, the production processes they deploy, and the waste, scrap, packaging, and disposal of the end product. Toyota communicates its global requirements for producing clean and safe products to its suppliers, among others, through its “Green Purchasing Guidelines”. In addition to the “Green Purchasing Guidelines”, Toyota provides suppliers with a list of substances they should avoid using in their production process. The way forward The impact of climate change and the disruptions highlighted are critical vulnerabilities in Toyota South Africa's supply chain, such as the importance of effective communication and collaboration with suppliers. According to Toyota's CEO, "The decision we take over the next three to four years is going to affect what the future manufacturing footprint looks like in SA, its economic value, jobs, skills creation and the profile of vehicles sold". He also mentioned that the industry needs to consider where vehicles will be sourced from and the mix of imports versus locally produced vehicles. Therefore, Toyota South Africa needs to prepare for future uncertainties that can safeguard its operations and remain competitive. Sources: Branquinho, L. 2022. How badly will KZN damage impact Toyota SA? 17 May 2022, Bizcommunity [Online] Available from: Dropa, D. 2023. These were South Africa's most popular cars of 2022. 26 January 2023. TimesLive. [Online] Available from: Du Toit, A. Toyota South Africa recovering after factory flood – 88% of cars written off. 12 May 2022, Top Auto. [Online] Available from: Mpyane, P. 2024. SA car industry going through one of its biggest disruptions, says Toyota CEO, 27 October 2024, Business Live. [Online] Available from: Perry, N. 2024. Toyota's Approach to lean procurement and production. 16 January 2024, Procurement magazine [Online] Available from: Von Hold, K. 2019. Toyota – striking for co-determination. 19 November 2019, South African Labour Bulletin. [Online] Available from: Source: Badenhorst-Weiss, van Biljon & Ambe, 2017:222 END OF CASE STUDY SCH4801 ASSIGNMENT 2 2025 Page 9 of 15 SECTION A: QUESTION 1 QUESTIONS 31 MARKS Section A (question 1) consists of short essay-type questions. Please note that the questions are based on the case study – Toyota South Africa's Supply Chain Challenges: A Case Study in Disruption and Resilience. Please use the underlined words for each of your report's three (3) questions as sub-headings. Also, number your answers, for example, 1.1, 1.2, up to 1.3. Also, remember to link your answer to Toyota South Africa's Supply Chain Challenges: A Case Study in Disruption and Resilience. Very important: When referring to Toyota, please note that you cannot just provide the sentences from the case study. Your answers should not contain replication from the case study but rather demonstrate your own insight, analysing the information and explaining its relevance to the discussion. This applies to all the questions. Also, all answers should be based on the prescribed book's content and no other sources. 1.1 Inventory-related decisions: Procurement managers at Toyota might, in future, only source 40% from local suppliers and 60% from global suppliers, which might impact their inventory decisions. To balance efficiency and responsiveness, evaluate any three key inventory categories relevant to Toyota with possible trade-offs for each. [9] 1.2 Production strategies: As a postgraduate student, you want to know from the production manager why Toyota only focuses on the Toyota Production System (TPS) as its manufacturing philosophy. You are convinced that the three production strategies can be used along with TPS, resulting in cost savings that enhance it’s competitiveness. Critically evaluate each production strategy's relevance to Toyota. [6] 1.3 Toyota supply chain: Answer the following sub-questions: [16] a) Draw a supply chain for Toyota South Africa. Be sure to include the three key supply chain flows, at least one first-tier supplier, and a first-tier and second-tier customer. No marks for a generic supply chain. The supply chain should apply to Toyota SA. No marks will be allocated to Googled images of Toyota’s supply chain. (10) b) Based on Toyota’s supply chain presented in 1.3a, distinguish between each role player by providing a relevant example from the case study.(6) END OF SECTION A (QUESTION 1) SECTION B: QUESTION 2 6 MARKS Section B (question 2) questions are based on the case study – Toyota South Africa's Supply Chain Challenges: A Case Study in Disruption and Resilience.A question was posted to an AI Tool. You will need to evaluate the answers provided by the AI tool by comparing them to the relevant section of the prescribed book. SCH4801 ASSIGNMENT 2 2025 Page 10 of 15 The following question was posted to an AI Tool: Assuming you have recently been appointed Procurement Manager for Toyota South Africa. Your first task is to describe the four most probable key supplier-evaluation criteria for Toyota that might mitigate risks associated with current suppliers, with relevant examples from the case study. The following answer has been copied and pasted directly from the AI Tool for this exercise. Answer by the AI Tool: Quality Management Toyota’s global success is built on delivering vehicles of exceptional quality. Suppliers must maintain high-quality standards to avoid defects and ensure product reliability.