North American Plant Location

North American Plant Location

a) It is evident that decision making process that involves determining where the location of the plant would be is dependent not only on the President but also on the line employees. The Toyota Company is known to implement initiatives which ensure that the employees are involved in all the decision making processes. The location of the company is also key factor which is considered in the decision making process. This ensures that the consumers are given what they require at the right time and place. When determining the correct location it is important to analyze the existence of other plants as well as companies that may be producing the same output. It is important that they penetrate markets which are not already fully occupied. The availability of labor is a core matter since they would play a big role in ensuring that they maintain continuity in the large producing capabilities of the company. This also enables the company to fulfill the requirements of the local labor force that exist at the new location.
Some environmental factors are also considered in this case. For example the Toyota Motor manufacturing Company has taken advantage of the cold weather in the area of Timmins, Ontario which is suitable for conducting some tests on their products. Some of the items which are tested include: starters, heater, alternators as well as heavy-duty batteries. This is because the cold weather if ideal for survival. The winter testing was also appropriate to give an actual test for some areas where their products would go to such as cold starting, tire traction and washer operation.
The sales that the company is expected to make over a certain period of time is also important in the decision making process. Good sales that generate profits are expected so as to ensure that they are able to grow and penetrate the market as compared to the other competitors.
The quality of the product is also important. The facility needs to be in a position whereby they can earn recognition and good reputation because they produce high quality products. High quality can also go hand in hand with factors such as efficiency of the plant and its ability to satisfy the needs of the target clients in that specific area.
Technological advances should also be well considered. The implementation of new methods of technology would be an important factor since it plays a big role in ensuring that high quality products are made by the use of latest technological methods. The use of appropriate technological methods will keep them ahead of their competitors.
Risk factors can also be analyzed. This includes the volatility of the products. The demand of such products are usually dependent on many factors some being social as well as economic. Political factors are also found to be influential to the productions. The main sales from the company are targeted at the European as well as the Asian market hence it is quite important for the company to have the economic and political of these countries being stable so as to ensure that the levels of sales are well maintained. The regulations that may be put by the government of these countries such as the regulations on the important as well as tariff charges can affect the supplies. Another factor is the competition by other manufacturers of automobiles that may penetrate the same markets in which they have interest. Competition has been known to influence some sense of globalization and expansion in the search for a greater market base. Higher competition has the probability of affecting the company by reducing its sales since it influences them to reduce the prices that they charge on the products that are being sold. One way by which they can beat competition is by considering factors such as innovativeness that will capture the attention of the consumer with new products hence making it possible for them to get a higher demand for their demands. Thus they should be in apposition to develop new vehicle models that will suit the needs, tastes and preferences of the consumers so as to ensure that they get what they want. Thus ensures customer satisfaction hence better sales by the company.
b. Come up with two tables a weighted and un-weighted assessment
Factors Quality of products Environmental factors Innovative and Unique ideas Efficiency in production and sales Climatic conditions of the areas Presence of unions Technology Total
Weights 25% 5% 25% 25% 10% 5% 5%
Toyota Motor Manufacturing Canada (TMMC) 100 60 100 100 100 100 100 98
The Lexus RX 330 Line North American plant 100 100 20 40 60 60 0 54
Levels of importance 0.25 0.05 0.25 0.25 0.1 0.05 0/05

Factors Quality of products Environmental factors Innovative and Unique ideas Efficiency in production and sales Climatic conditions of the areas Presence of unions Technology Total
TMCC 100 60 100 100 100 100 100 98
Lexus 100 100 20 40 60 60 0 54
0.25 0.05 0.25 0.25 0.1 0.05 0/05

c. Identify these factors as either exogenous or endogenous, weighting them using your best judgment (stating any relevant assumptions or constraints), and assigning two scores to each factor: one for production of the Lexus RX 330 at TMMC, and one for production at a Toyota factory in the USA.
The grid analysis indicates that although it is possible for a company in the North of America has the chances of actually performing much better due to the available opportunities such as the wide availability of markets, the Toyota Motor Manufacturing Canada (TMMC) has the ability to still match up to the performance of the factory that is based in the United States. It also has the great ability to match up to its ability to deal with the capacity of production as well as the cost efficient methods.
The exogenous factors that can be seen from the above analysis include the location of the plant, the availability of vendors for their products, the laws and regulations that have been implemented by the Government in the area of operation, the availability of cost incentives for their products as well as the presence of unions to handle any issues that may arise during their process of making the necessary productions.
The endogenous factors that can be observed from the analysis includes the availability of latest technological methods for the production process, the wages for the selected labor force, the quality of the products, the ability and avenues for growth of the firm, the overall capacity of the plant to meet the demands which have been initially set forth as well as the competencies that the Plant may have.
These factors are therefore important since Toyota can be able to come up with a final decision in the production of their high quality cars. Thus Toyota can be in control of the internal factors while the external factors are actually beyond their control. Exogenous factors in particular are important since they determine the performance of the domestic market as well as the exporting volumes in particular. Thus higher production volumes have the chance to offer an incentive to the manufacturers so that decide to make an investment in new equipment that enable them to produce goods that meet the needs of the customers hence they can beat their competitors.
Some scores which can be assigned are technology and environmental factors both of which have 5% of weights.

d. Using the scores from your weighted scoring model and working with regard to Ringo Sho and Nemawashi make and support your recommendation for the RX 330 North American plant location – TMMC or a factory in the USA.
It would be recommended that the company be located in North America. This would be very strategic since it would provide a great potential for the company to explore new markets where the demands of their products would be high. Toyota should therefore advance into markets that have been ignored by some manufacturers and even considered to be saturated in some cases. The company should view the opportunity that exists in these areas so as to tap into the definite growth of the United States of America. The Lexus RX 300 is very essential for those people who love luxurious cars as well as those who drive in roads that are unpaved or snow covered. The North America would be more appropriate since they have the latest technological methods in the production of their goods as well as maintenance. From the scores it is possible to get results that enable the making of an important decision. The results can be classified in a simple manner. The grid enables the company to do a proper analysis especially when they are more than one factor to consider. The weight of 5 brings about an understanding of great significance while that of zero is directly related to the lack of significance.
North America also has the potential to provide a large and skilled labor force thus ensuring that better qualities will be produced in the newly established plants. This would ensure that high rates of production are maintained over the years. They would also take advantage of the North American Free Trade Agreement that allows a tax-free trade exchange to be carried out. Thus products in the USA and Canada can move freely unlike those from japan. Toyota has attributes great sales by the introduction of new products to the market such as the Lexus RX3330 as well as the Camry brand. Thus, if the company has the ability and the skills of penetrating to a new market then they have the potential of increasing their sales to millions.
In general it can be said that America has implemented great laws which favor the production of goods in the country hence this would enable them to have better production conditions by the plants in those areas. These conditions place them ahead of the other competing locations hence making it an appropriate spot for most of the companies that are into large scale production.

 

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