Question 1

Read the following case study based on Apple and answer the questions that follow, not all the answers can be found in the case study, you may be required to conduct additional research.

An insight into procurement at Apple Inc.

With leading technology giants, Apple Inc. currently holding its Special Event, Supply Chain Digital takes a look at the companys supplier standards and diversity programme.

Over the lifespan of Apple, the company has developed an entire eco-system of suppliers supporting its business. Apple is proud of its strong relationships with its suppliers.

Apple requires its suppliers to follow in the companys footsteps, meeting the highest standards for all goods and services and be as committed as possible to social responsibilities. Apples ideal supplier is one that understands its culture, fast-paced environment and expectations as well as those who look to adding value. Above all else, Apple values innovation.

First steps to become an Apple supplier

Suppliers looking to work with Apple should first create a MyAccess account to register its services. Once completed, Apple procurement professionals will look for relevant products and services required by the company and contact individual suppliers to discuss potential opportunities.

However, if there is no immediate need for new suppliers providing all information is updated regularly Apple will retain the relevant information on its Confidential Supplier Information Database for six months.

Q.1.1. The concepts purchasing and procurement are often used interchangeably, in your own words, explain the concept of purchasing.

Q.1.2. Examine the strategic importance of procurement for an organisation like Apple.

Note: you are required to paraphrase your understanding of the strategic importance before you relate at least 3 key points to the context of Apple.

Q.1.3. Analyse components and finished goods as examples of nature of goods purchased in relation to Apple.

Note: you are required to paraphrase your understanding of each type of purchase before relating each to the context of Apple.

Question 2

Read the following case study based on Toyota and answer the questions that follow, not all the answers can be found in the case study, you may be required to conduct additional research.

Toyota Production System

A production system based on the philosophy of achieving the complete elimination of all waste in pursuit of the most efficient methods.

Toyota Motor Corporation's vehicle production system is a way of making things that is sometimes referred to as a "lean manufacturing system," or a "Just-in-Time (JIT) system," and has come to be well known and studied worldwide.

This production control system was established based on many years of continuous improvements, with the objective of 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 (TPS) was established based on two concepts: "jidoka" (which can be loosely translated as "automation with a human touch"), as when a problem occurs, the equipment stops immediately, preventing defective products from being produced; and the "Just-in-Time" concept, in which each process produces only what is needed for the next process in a continuous flow.

Based on the basic philosophies of jidoka and Just-in-Time, TPS can efficiently and quickly produce vehicles of sound quality, one at a time, that fully satisfy customer requirements.

Just-in-Time

Making only "what is needed, when it is needed, and in the amount needed"

Producing quality products efficiently through the complete elimination of waste, inconsistencies, and unreasonable requirements on the production line (known respectively in Japanese as muda, mura, muri). In order to fulfill an order from a customer as quickly as possible, the vehicle is efficiently built within the shortest possible period of time by adhering to the following:

When a vehicle order is received, production instructions must be issued to the beginning of the vehicle production line as soon as possible. The assembly line must be stocked with the required number of all necessary parts so that any kind of ordered vehicle can be assembled. The assembly line must replace the parts used by retrieving the same number of parts from the parts-producing process (the preceding process).

The preceding process must be stocked with small numbers of all types of parts and produce only the numbers of parts that were retrieved by an operator from the next process.

Origin of the Toyota Production System A production system fine-tuned over generations

Roots of the Toyota Production System

The Toyota Production System (TPS), which is based on the philosophy of the complete elimination of all waste in pursuit of the most efficient methods, has roots tracing back to Sakichi Toyoda's automatic loom. TPS has evolved through many years of trial and error to improve efficiency based on the Just-in-Time concept developed by Kiichiro Toyoda, the founder (and second president) of

Toyota Motor Corporation.

Waste can manifest as excess inventory, extraneous processing steps, and defective products, among other instances. All these "waste" elements intertwine with each other to create more waste, eventually impacting the management of the corporation itself.

Kiichiro Toyoda, who inherited this philosophy, set out to realize his belief that "the ideal conditions for making things are created when machines, facilities, and people work together to add value without generating any waste." He conceived methodologies and techniques for eliminating waste between operations, between both lines and processes. The result was the Just-in-Time method.

MRP is a system for planning and controlling inventory, production and scheduling by focussing on two key areas of the business - customers and resources. Customer forecasts and orders are used to create a Master Production Schedule (MSP). The MRP system converts the MSP into a detailed schedule from which accurate and timely orders for raw materials and components can be placed. MRP enables businesses to order materials or products to arrive in a timely fashion and in accurate quantities, rather than keeping large inventories, thereby improving cash flow. Companies of almost any size can benefit from an MRP system, for example by reducing human error, improving production times and reducing human input. For very small businesses however, this investment may be wasteful and actually cost the company more time.

Q.2.1. The just-in-time principle is key to the success of the Toyota Production System, in your own words, explain the concept of the just-in-time system.

Q.2.2. Explain any 3 benefits and any 3 weaknesses of using the just-in-time principle in relation to Toyota.

Note: you are required to paraphrase your understanding of the concept before you apply it to the context of Toyota. (18 marks).

Q.2.3 Durban, KwaZulu-Natal has one of the largest Toyota manufacturing plants. Considering the recent looting, floods and increased inflation, analyse the future price increases and uncertainty of supply as a role of inventory in the supply chain in relation to Toyota.

Note: you are required to paraphrase your understanding of the concept before you apply it to the context of Toyota