The Study Of Toyota’s Zero Inventory Management

With the rapid development of science and technology and the growing trend of economic globalization, China’s automobile manufacturing enterprises are facing more dynamic and competitive market environment. In order to obtain sustainable competitive advantage, inventory management is becoming more and more important than before in any company’s strategy. For a long time, inventory management has always been one of the challenges that troubling many car manufacturers in our country. Many automobile manufacturers in China studied Toyota’s zero inventory management, but there are a lot of misunderstanding when they practiced it, the efficiency of inventory management in most automobile manufacturing enterprises have not yet been greatly enhanced, zero inventory is even more difficult achieved. Then, the study of zero inventory management about manufacturing enterprises is very important to further reduce operating costs, effectively enhance the competitiveness of enterprises.In view of the low level of inventory management and misunderstanding in zero inventory management in China’s automobile manufacturing enterprises, the thesis studied the Toyota’s inventory management deeply. First, the thesis purposed zero inventory management from the Toyota’s production system to make it independent and analyzed the meaning of zero inventories, the benefits and risks to achieve zero inventory and requirements and methods in different directions. Then, the paper selected the South East Motor-the automobile manufacturing enterprise in China that has geography advantages and a higher management level, also has made certain achievements in inventory management, as a case to explain the reason, the possibility and feasibility in China’s car manufacturers to achieve zero inventory management. Based on the above of basis theory and case, the thesis demonstrated inventory management problems in the process of implementation and their causes from both the internal and external environment of automobile manufacturing enterprises. The idea is that for internal problems, companies can improve their management level to resolve those problems, but for external environment, companies should consider the gains and risk to implement zero inventories, that is because of the difficulty to resolve those problems through their own efforts. Considered the current management level and the external environment, China’s auto manufacturer’s enterprises can hold a certain of safety stock. In the thesis, the author also give some suggest about how to determine the number of safety stock. But it does not mean zero inventories is meaningless. We still should learn the spirit of continuous improvement that zero inventory management to pursuit to reduce inventory levels constantly and close to zero infinitely.