Determining the feasibility of utilizing car carriers in the whole logistics operation of Toyota Motor Philippines Corporation

Date

10-2010

Degree

Bachelor of Science in Industrial Engineering

College

College of Engineering and Agro-Industrial Technology (CEAT)

Adviser/Committee Chair

Marc Immanuel G. Isip

Committee Member

Aurelio A. Delos Reyes Jr., Romark O. Cayube

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Abstract

Toyota Motor Philippines Corporation (TMP) is the leading automotive company in the country. Based on its benchmarking, some of its local competitors and all its affiliates in the Asia Pacific Region are using car carriers for delivery of vehicles to their dealerships. Currently, only 11% of Toyota cars are transferred to dealers through car carrier and the other 89% are through self-drive. The study aims to determine the viability of employing car carrier operation in TMP’s entire logistics process. Three alternatives were formulated: Current System; 100% Car Carrier Operation; and Expanded Car Carrier Operation. Criteria for evaluation were devised in consideration of the company’s Vision, Mission, and Values and were given weight by taking into account both TMP’s and franchise dealers’ interests. Weighted-average method and factor-rating method were used in alternative selection and sensitivity analysis was applied to the results. It is recommended that TMP employs 100% car carrier operation to achieve benefits on safety, quality, environment-friendly operation, lead time, efficiency in transaction procedure, brand promotion, adherence to global standards, competitiveness, and minimized effect of upsurges in fuel price, toll fee increase, and fuel inflation. The corresponding cost is PhP1,235.13 or 101.36% average increase in operations expenses per unit which is only to affect the discounting capabilities of the dealers and not their profitability. Dealers may limit the discounts they give to the buyers which are considerably higher than this amount. The increase of PhP1,235.13 represents the cost of the added value of quality preservation of a unit which ultimately leads to enhanced customer service . Dealers can increase their sales by using this added value in promoting Toyota products along with aggressive marketing. For every additional unit sold, the profit will cover the increase in operations cost of 92 units. Car carrier utilization in the whole logistics operation of TMP is established to be feasible and ready for immediate implementation. The expected increase in cost may be lessened through adequate negotiations with the logistics service providers. Benefits to be derived in shifting to 100% car carrier use should be clearly conveyed by TMP to the franchise dealers so that the increase in operations cost will become acceptable to them.

Document Type

Thesis

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