Based on this article please help answer the three questions listed after the article:

The second concept that we'll discuss is how inventory is bad and must be reduced. Inventory is a company's accounting of items of the raw materials that are used to produce a firm's products. It can also be the work in progress goods that are being transport by the company in its production facilities. And inventory can also be in the form of the units of goods that are ready to sell or finished goods. Why do companies see inventory as bad? Large inventories for raw materials or even work in progress goods are not valuable to a company until it is in finished goods form, which can be sold to customers at a profit. But even large inventories of finished goods may carry risk as the goods may become unsellable if not sold within a period of time. So, how do we see problematic inventory, especially those that we deem would be unsellable? Let's take a look at a couple of examples. First, for example, is food. Food that is past expiration date or spoiled food can no longer be sold to customers. Electronics can become unsellable if it risks the obsolescence as technology may become irrelevant when newer products or models are launched. Fashion indicated by fashion trends may have low customer demand after a certain period of time. Some unsellable items can be discounted to increase customer interest. For example, in fashion and electronics, past models or even collections are usually discounted to quickly move them out of stores as newer models and collections arrive. For items that cannot be sold anymore, the firm needs to spend even for its proper disposal. So, unsellable inventory leads to low profit for the firm or even increase in costs. Now, let's talk about lean manufacturing and just-in-time inventory systems. Toyota, one of the world's largest car manufacturers, is also a pioneer in some supply chain strategies adopted by other companies. Toyota introduced the concept of lean manufacturing and just-in-time inventory system through their Toyota production system philosophy. Over the past 15 years of Toyota production systems, lean and just-in-time manufacturing, supply chain managers have worked under the assumptions that inventory is bad and must be reduced at all costs. What is the Toyota production system? The Toyota production system is a production system based on the philosophy of achieving complete elimination of always in pursuit of the most efficient methods. The objective here is making the vehicles ordered by customers in the quickest and most efficient way in order to deliver the vehicles as swiftly as possible. The Toyota production system is established on two basic concepts. First is jidoka. Jidoka highlights the causes of problems because work stops when a problem occurs. This leads to improvements in the processes by eliminating the root causes of defects to build quality. Jidoka, sometimes, is called autonomation, meaning automation with human intelligence. The second concept here is just-in-time. Just-in-time is when each process produces only what is needed for the next process in a continuous flow. Kiichiro Toyota, who inherited this philosophy of complete elimination of all waste, set out to realise his belief that the ideal conditions for making things are when machines, facilities and people work together to add value without generating any waste, and waste can manifest as excess inventory, extraneous processing steps and defective products among other instances. Therefore, in just-in-time systems or in JIT systems, inventory is reduced or even eliminated as manufacturers design a system where suppliers deliver just in time for it to be manufactured or processed. When inventory is eliminated, costs and risks tied to inventory is also eliminated. The JIT system involves high level of coordination and trust with suppliers to really reduce the inventory of raw materials. JIT systems also mean designing your manufacturing process to be on the same cadence. So, buildup of inventory in between processes or what we call the work in progress inventory can also be eliminated. JIT systems also mean high degree of accuracy of forecasts to ensure that inventory of goods are covered just enough to cover the customer demand. This eliminates the need to mark down obsolete models of products but also ensuring minimal out of stocks or losses in sales. So, what are the pitfalls of TPS or the Toyota production system and lean manufacturing? First of all the TPS and lean manufacturing operates with low margin for error. For JIT to work, you need a low margin of error. JIT principles work best with stable system components. Being overly aggressive with JIT scheduling leaves the organisation vulnerable to production interruption due to supplier delivery issues or problems with raw materials. In a world where disruptions are becoming more frequent and have higher impact, can we still consider today's market as stable? Is JIT system still fit for a business? So, let's investigate why JIT systems does not fit into a resilient supply chain strategy. JIT systems again, while having the best intentions to reduce costs and increase efficiencies would fail in most situations where calamities, such as snowstorms or even port congestions cause unexpected supplier transportation delays of days, weeks and maybe even months. In extreme situations like COVID-19 disruptions, the delays are not just caused by one supplier but may impact even several components in your supply chain, even your manufacturing. So, we can see now that inventory in strategic locations can be good in managing risks and building resilience.

1. How does Toyota manage its global supply chain? What are the various kinds of risks that may cause serious disruptions in the supply chain? Refer to both the upstream and downstream supply chains.
2. How does Toyota manage the balance between variety and cost? How is the trade-off done?
3. "Toyota puts 50% weightage on the process and the rest on the final product." Explain.