E-Business - Online Auction
.0 Introduction
This assignment that I will be doing is about Foreign Direct Investment (FDI) and the financial benefits that Toyota has brought to Malaysia. So what do you understand about FDI and about Toyota Company as well as the lean manufacturing? I will be discussing them in details in the following sections in my assignment.
2.0 Foreign Direct Investment (FDI)
2.0 What is FDI?
Foreign investment can be divided into two components which are the foreign direct investment (FDI) and foreign portfolio investment (FPI).
Foreign direct investment is defined as a long term investment by a foreign direct investor in fixed assets located abroad for operating distribution or production facilities. FDI plays an extraordinary and growing role in global business. It can provide a firm with new markets and marketing channels, cheaper production facilities, access to new technology, products, skills and financing.
In the years after the Second World War global, FDI was dominated by the United States, as much of the world recovered from the destruction wrought by the conflict. The U.S. accounted for around three-quarters of new FDI (including reinvested profits) between 1945 and 1960. Since that time FDI has spread to become a truly global phenomenon, no longer the exclusive preserve of OECD countries.
FDI has grown in importance in the global economy with FDI stocks now constituting over 20% of global GDP. In the last few years, the emerging market countries such as China and India have become the most favored destinations for FDI and investor confidence in these countries has soared.
Please refer to Appendix 1 (Page 26) for the FDI Confidence Index 2005.
Foreign portfolio investment is the purchase of stocks and bonds to obtain a return on the funds invested. Although portfolio investors are not directly concerned with the control of a firm, they invest immense amounts in stocks and bonds from other countries too. The relative ease with which portfolio investment can enter and exit countries has been a major contributing factor to the increasing volatility and instability of the global financing system.
There is an important distinction between FDI and FPI. FPI is investment by individuals, firms, or public bodies in foreign financial instruments. FPI does not involve taking a significant equity stake in a foreign business entity. FPI is determined by different factors than FDI and raises different issues.
2.1 Forms of FDI
FDI exists in many forms. The most common classification is based on the investment type in the foreign economy. The two most important entry modes are Greenfield investment and Mergers & Acquisition.
2.1.1 Greenfield investment
This is the direct investment in new facilities or the expansion of existing facilities. It is the primary target of a host nation's promotional efforts because they create new jobs and production capacity, transfer technology and know how. It can also lead to linkages to the global marketplace.
The Organization for International Investment cites the benefits of Greenfield investment including increased employment (often at higher wages than domestic firms), investment in research and development, and additional capital investment.
However, this does not always result in positive influences on the local economy. It can crowd out local industry as the investing multinational can produce more cheaply and uses local resources. Besides, the profits from production do not feed back into the local economy but instead to the multinational's home economy.
2.1.2
Mergers & Acquisition (M&A)
Mergers & Acquisition (M&A) is the primary type of FDI, it occurs when a transfer of existing assets from local firms to foreign firms takes place. Cross-border mergers occur when the assets and operations of firms from different countries are combined to establish a new legal entity. Cross-border acquisitions occur when the control of assets and operations is transferred from a local to a foreign company, with the local company being an affiliate of the foreign company.
Compared to a Greenfield investment, a cross-border acquisition is clearly much quicker entry and can also be a cost effective way to obtain technology and/or brand names. However, some firms often pay too high price or utilize expensive financing to compete a transaction.
2.2 Matters of FDI
2.2.1 Exporting
Exporting is a traditional and well established method of reaching foreign markets. No investment in foreign production facilities is required because exporting does not require the goods to be produced in the target country. This also reduces the risk if the project fails. Exporting is usually seen as a low key method of entering a foreign market as it avoids the substantial cost of establishing manufacturing operations in the host country such as factories, machineries and employees.
There are 2 types of exporting: indirect and direct exporting.
(i) Indirect exporting
Indirect exporting is the exporting of goods and services through various types of home-based exporters. The main advantage of indirect marketing for small businesses is that it provides a way to penetrate foreign markets without the complexities and risks of direct exporting. Many of the options involve the use of intermediaries. Export intermediaries may include commissioned agents, export management companies, export trading companies and foreign trading companies.
However, there are also disadvantages of indirect exporting: foreign business can be lost if exporters decided to change their source of supply, potentially lower sales and inadequate market feedback.
(ii) Direct exporting
Direct exporting is the exporting of goods and services by the firm that produces them. Direct exporting usually achieves greater sales than indirect exporting. It is good in a way that can have more control over the export process, potentially higher profits and a closer relationship with the overseas buyers and marketplace. However, it requires greater initial outlays of funds and personnel, and they are generally regarded as riskier than indirect exporting options.
There are several different approaches to direct exporting. The first approach is using domestic sales representatives or agents to introduce a product to potential buyers. Another approach is the use of foreign distributors who are merchants that purchase merchandise from exporter and resell it at a profit. The third approach is the direct sales to end users whereby a business sells its products or services directly to end users in foreign countries. The last approach is locating foreign representatives and buyers.
2.2.2 Franchising
Franchising is a form of licensing in which one firm contracts with another to operate a certain type of business under an established name according to specific rules. It is a business relationship in which the franchisor (the owner of the business providing the product or service) assigns to independent people (the franchisees) the right to market and distribute the franchisor's goods or service, and to use the business name for a fixed period of time.
There are 2 types of franchising; industrial franchising and commercial franchising. Commercial franchising can be divided into goods franchising, service franchising and mixed franchising.
There are many benefits to becoming a franchisee. The franchisor provides detailed training, advices and help in identifying suitable trading locations for the franchisee. The support and benefits provided by a franchisee system greatly reduce a franchisee's business risks too.
However, there are also some disadvantages of franchising. The franchisee will have to pay the franchisor for the services provided for the use of the system and there are also several policies that may affect the franchisees' profitability. Other than that, the good name of the franchised business and its brand image may become less reputable for the reasons beyond their own control.
Several examples of franchising are McDonalds, 7-11 and Starbucks Coffee. Please refer to Appendix 2 (Page 27) for some examples of some franchised company in different countries
2.2.3 Licensing agreement
Licensing agreement is a contractual arrangement in which one firm (the licensor) will grant to another firm (the licensee) the right to use any kind of expertise such as manufacturing processes, marketing procedures and trademarks for one or more of the licensor's products.
The licensee pays a fixed sum when signing the licensing agreement and pays a royalty of 2 to 5 percent of ...
This is a preview of the whole essay
Several examples of franchising are McDonalds, 7-11 and Starbucks Coffee. Please refer to Appendix 2 (Page 27) for some examples of some franchised company in different countries
2.2.3 Licensing agreement
Licensing agreement is a contractual arrangement in which one firm (the licensor) will grant to another firm (the licensee) the right to use any kind of expertise such as manufacturing processes, marketing procedures and trademarks for one or more of the licensor's products.
The licensee pays a fixed sum when signing the licensing agreement and pays a royalty of 2 to 5 percent of sales over the life of the contract. The contract may be five to seven years with an option for renewal.
There are many types of licensing. The five most important segments of the merchandise licensing industry are the corporate trademark or brand, character or entertainment, fashion, sports and art licensing.
Fashion licensing is the licensing of the name of a kind of clothing or a product designer on a designer or apparel brand. For an example, Calvin Klein licensing income has tripled over the past three years which accounts for more than 90 percent of sales, it has driven the brand's global retail volume from $2.1 billion in 1994 to the $5 billion range in 1997.
Licensing brings advantages as well as disadvantages. It is good as it allows small companies to enter foreign market quickly, easily and with virtually no capital investment. However, the main disadvantage is the loss of control of the marketing of the firm's products.
2.2.4 Joint venture
Joint venture is a strategic alliance where two or more parties, usually businesses, form a partnership to share markets, intellectual property, assets, knowledge, and profits. It is different from a merger in the sense that there is no transfer of ownership in the deal.
There are many reasons of forming a joint venture: build on company's strength, spreading costs and risks, improving access to financial resources, access to new technologies and innovative managerial practices.
For an example, Sony Ericsson is a joint venture established in 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunication company Ericsson to make mobile phones. The reason for this venture is to combine Sony's consumer electronics expertise with Ericsson's technological leadership in the communication sector.
2.2.5
Strategic Alliances
Equity alliance is an alliance in which each partner owns a percentage of the equity in a venture that the firms have jointly formed. Non-equity alliance is a contractual relationship between two or more firms in which each partner agrees to share some of its resources or capabilities.
There are many reasons for strategic alliances, including to gain access to a restricted market, develop new goods or services, facilitate new market entry, share significant R&D investments, share risks, develop market power, build economies of scale, meet competitive challenges, learn new skills and outsource for low costs and high quality output.
For an example, in late 1997, Intel, Motorola, and Advanced Micro Devices, three of the most prominent names in the computer chip industry announced the formation of a not-for-profit company named EUV (Extreme Ultraviolet).
However, strategic alliances can also lead to competition rather than cooperation, loss of competitive knowledge, conflicts resulting from incompatible cultures and objectives, and reduced management control.
2.3 Why FDI?
FDI is expensive because a firm must bear the cost of establishing production facilities in a foreign country or of acquiring a foreign enterprise. It is also risky because doing business in another culture in another country is very different. However, as for exporting and licensing, a firm does not need to bear the risks of FDI. So, what are the reasons that make many firms choose FDI over either exporting or licensing? The reasons may due to:
2.3.1 Transportation Costs
Transportation costs is a cost that involve in every business. The amount of this cost can be huge or small. When transportation costs are added to the production, it becomes unprofitable to ship some products a long distance.
For example, cement and soft drinks are products that have a low value-to-weight ratio and they can be produced in almost any location. Therefore, the attractiveness of exporting decreases over FDI or licensing.
For products that have a high value-to-weight ratio such as the electronic components, medical equipment and computer software, transportation costs are a very minor component of total landed cost. So, there are little impact on the attractiveness of exporting, licensing and FDI.
2.3.2 To retain strategic control
A firm may want to retain control over their production, marketing and strategy. However, licensing does not give a firm tight control over manufacturing, marketing, and strategy in a foreign country that may be required to profitably exploit its advantage in know-how.
For an example, a firm might want its foreign subsidiary to price and market very aggressively but the licensee may unable to do it.
2.3.3 To protect technological know-how
Although licensing is a good way to earn royalty free, but it is not a good option to be clustered in the high-technology industries. In the high technology industries, firm's specific expertise is an important and valuable asset to them, and licensing is hazardous. So, firms must protect their technological know-how because licensing may result in giving away its know-how to a potential foreign competitor.
An example of giving away its know-how to competitors is the case of RCA in the 1960's. RCA licensed its leading-edge color television technology to Japanese companies (Matsushita and Sony) because RCA saw licensing as a good way to earn good returns without the costs and risks. However, both Japanese companies assimilated RCA's technology and enter the U.S market, competing directly with RCA. Today, Matsushita and Sony are having a much bigger market share than RCA.
2.3.4 Skills and know-how are not amenable to licensing or franchising
Management and marking know-how are not easy to be amended to licensing because licensing a manufacture of product is different from licensing the way a firm does business.
Let's look at Toyota as an example. The real competitive advantage of Toyota comes from its management and process know-how, the products of Toyota can be license but the skills, management and process know-how of Toyota can be very difficult to articulate or codify where they cannot be written down in a simple licensing contract. Thus, Toyota has pursued a strategy of FDI rather than licensing foreign enterprises to produce its car.
Example of industry where the knowledge can be transferred more easily is McDonald's.
2.5 Host country effect on FDI, Government policy on host country
2.5.1 The benefits of FDI to host countries
2.5.1.1 Resource-transfer
Foreign direct investment can make a positive contribution to a host economy by supplying capital, technology, and management resources that will boost the country's economic growth rate.
Capital flows are especially beneficial to countries with limited domestic sources and restricted opportunities to raise funds in the world's capital markets. FDI may also attract local capital to a project for which local capital alone would not be sufficient.
Technology can stimulate economic development and industrialization. FDI is also closely linked to technology transfer, including the introduction of new hardware to the market and the techniques and skills to operate it. Many countries lack of the R&D resources and skills required to develop their own indigenous product and process technology.
Foreign management skills acquired through FDI also produce important benefits for the host country because foreign trainers trained in the latest management techniques can skills that can often help to improve the efficiency of operations in the host country.
2.5.1.2 Employment
FDI also brings jobs to a host country which reduces unemployment level. The benefits of FDI reach beyond employment. Firstly, salaries paid by multinational corporations are usually higher than those paid by domestic firms. Besides, the creation of jobs translates also into the training and development of a skilled workforce.
For an example, the government of South Africa has been encouraging FDI in part to help reduce high unemployment which stands at around 35 percent.
2.5.1.3 Balance of payment
FDI will also bring an effect to the host country's balance of payment. Import substitution, export earnings and subsidized imports of technology and management all assist the host nation on the trade account side of balance of payment. Not only a few production facilities substantially decrease the need to import the type of products manufactured, but it may also start earning export revenue.
2.5.2 The costs of FDI to host countries
2.5.2.1 Adverse effects of balance of payments
Host country benefits from the initial capital inflow but it is a one-time-only effect because foreign subsidiaries will send their earnings to their parent company and this is an outflow of earnings of host country. Such outflows show up as a debit on the capital account. Some governments have responded to such outflow by restricting the amount of earnings that can be repatriated to their home country.
2.5.2.2 Threat to national sovereignty and autonomy
Many host government worry that FDI is accompanied by some loss of economic independence too. The main concern is that the foreign parent which has no real commitment to host country will make decisions that can affect the host country's economy, while the host country's government has no real control on it too.
Several negative impacts of FDI on host countries, includes industrial dominance, technological dependence, disturbance of economic plans, cultural change and interference by home government of multinational corporations.
2.5.3 Government policy instruments and FDI on host countries
Host countries adopt policies designed both to restrict and to encourage inward FDI.
2.5.3.1 Inward FDI encouragement
It is now getting more common for government to offer incentives to foreign firms to invest in their country. The incentives offered including tax concessions, low-interest loans and grants or subsidies. The reason of giving incentives to foreign firms is to gain from their resource-transfer as well as employment effects of FDI.
For an example, Kentucky offered Toyota an incentive package worth $112 million to persuade it to build its U.S. automobile assembly plants there where the package includes tax breaks, new state spending on infrastructure and low-interest loans.
2.5.3.2 Inward FDI restrictions
Host government restricts FDI by using a wide range of controls, including the ownership restraints and performance requirements. In some countries, foreign companies are excluded from specific fields. Foreign ownership may also be permitted although a significant proportion of subsidiary equity must be owned by local investors. Foreign firms may also be excluded from certain sectors on the grounds of national security or competition.
Performance requirements are controls over the behavior of the MNE's local subsidiary. The most common performance requirements are related to local content, exports, technology transfer and local participation in top management. A study found that some 30 percent of the affiliates of U.S. MNE's in less developed countries were subject.
3.0
Economic Benefits Value
Economic benefit is the scale of benefits to the economy of the local community.
(i) Reduced cost
Reducing the unnecessary expenditure or costs that will lead to wastage, for an example cut down the raw material costs and select the most appropriate method of production to avoid extra costs incurred.
(ii) Increase saving
Increase saving means reducing unwanted waste such as reducing inventory and reducing rework process. The reduction in unwanted waste will result in a greater saving, where the accumulated savings can be used for future investments or emergencies.
(iii) Value added
Value added reflects an increase in value gained from using a product. Examples of strategies that can add value to a product are such as create an exclusive and luxurious retail environment, using high quality packaging to differentiate the products from other brands, and lastly promoting the brand of the product so that it becomes a 'must have' brand name that consumers willing to pay for a premium price for it.
(iv) Willingness to pay
The willingness of a consumer to pay for an item or service may be considered as an economic benefit too. For an example, consumer is willing to pay for a product that suits her taste, meets her expectation and requirements compared to other substitute products.
(v) Increase productivity
Productivity can be increased by producing more output using lesser time. This may due to the use of more sophisticated machineries or more efficient labour as well as improved coordination of delivery.
(vi)
Increase income
Improved skills will lead to more innovative practice that increase yield. Advancement in machineries, skills of workers are able to improve productivity and efficiency which will lead to an increase on income. This is also a type of economic benefit.
(vii) Job opportunity
Increase job opportunity to local society is also an economic benefit. This will reduce the unemployment rate and may help in the economy growth. For an example, Toyota provides more job opportunity to the society of the host country.
(viii) Tax benefits
There are taxes imposed on foreign direct investment businesses from the host country. Therefore, it benefits the government of host country as there will be tax revenue collected from foreign businesses.
4.0
Toyota and Lean Manufacturing
4.1 History of Toyota
Toyota Motor Corporation was founded by Kiichiro Toyoda, who in 1933 established an automobile department in his father's loom factory - Toyoda Automatic Loom Works, Ltd., following a trip to tour United States automobile plants. The department concentrated on building fuel-efficient vehicles and completed its first experimental vehicles in 1935. In 1937 Toyoda established Toyota Motor Co., Ltd.
During the global economic downturn of the early 1990s, Toyota's profits declined substantially. Toyota then responded by cutting costs and moving production to overseas market. The company has represented one of the true success stories in the history of manufacturing, its growth and success reflective of Japan's astonishing resurgence following World War II.
Toyota has now grown to a large multinational corporation from where it started and expanded to different worldwide markets and countries by becoming the largest seller of cars in the beginning of 2007, the most profitable automaker ($11 billion in 2006) along with increasing sales in, among other countries, the United States.
Today, Toyota is the world's third largest manufacturer of automobiles in unit sales and in net sales. It is by far the largest Japanese automotive manufacturer, producing more than 5.5 million vehicles per year and equivalent to one every six seconds.
4.2
What is lean manufacturing
Lean means cutting out anything in the production process that adds complexity, cost and time that does not add value to the customer. Lean manufacturing is in direct opposition with traditional manufacturing approaches characterized by the use of economic order quantities, high capacity utilization, and high inventory.
Lean manufacturing is a systematic methodology that identifies and eliminates all types of waste or non-value added activities; not only in production or manufacturing industries but in the service industry as well. Lean concepts are purely about creating more value for customers by eliminating activities that are considered waste. Any activities or process that consumes resources, adds cost or time without creating value becomes the target for elimination.
Lean manufacturing is closely associated with Japanese production methods that are now widely adopted throughout much of the industrialized world. This concept brings together some of the practices such as quality circles, empowerment of workers and Just-In-Time.
Please refer to Appendix 3 (Page 28) for the lean process.
4.3 Elements of lean manufacturing
4.3.1 Eliminate waste
The most significant part of lean manufacturing is its focus on the elimination of all forms of waste. Waste is defined as anything that consumes material or labor that does not add value to the final end customer. Waste most often occurs in the form of overproduction and excess inventory. Waiting and excess motion are activities that increase lead time and also produce a significant amount of waste. Defects are the ultimate waste. They add zero value to everyone involved.
4.3.2
Pull Systems
Pull systems are another important lean manufacturing concept. It is a production system characterized by smaller batches, quick responses to customer demand, and smooth product flow. Traditional manufacturing used the "push" concept, making large batches of products and "pushing" them to each downstream operation whether they are ready for them or not. Push systems also often have products that are not sold out.
Pull system starts at the opposite end. Once the customer signal an order, the last process signals to the upstream process to produce the product. Each upstream process receives the signal from the downstream process that it needs, all the way back to the supplier of raw material.
Please refer to Appendix 4 (Page 29) for the comparison between Pull and Push System.
4.3.3 Continuous Flow/ One-Piece Flow
One-piece flow provides continuous output, improved quality, and enhanced bottom-line profits without the need for enlarging production capacity or staff. It is able to adjust to customer demands and shortened lead times better than large batch production operations. One-piece flow works to reduce not only delay but also the negative impacts on the system such as inventory build-ups, damage or obsolescence, and missed on-time deliveries. The continuous motion of production provided by one-piece flow means that there is no wasted time from start to finish. Processes overlap in one-piece flow whereby products are constantly on the move from one part of the cell to another.
Please refer to Appendix 5 (Page 30) for the comparison between continuous flow processing and batch processing.
4.3.4
Continuous improvement
The Kaizen method of continuous incremental improvements is an original Japanese management concept for continuous changes. It is an approach to operations improvement that assumes many and relatively small incremental improvements in performance. It stresses the momentum of improvement rather than the rate of improvement. Continuous improvement is often contrasted with breakthrough improvement.
Please refer to Appendix 6 (Page 31) for the comparison between continuous improvement and breakthrough improvement.
4.3.5 Add value to all process
Lean manufacturing is used as a tool to focus resources and energies on producing the value-added features while identifying and eliminating non value added activities. Activities that add value are such as providing good quality products or products with unique features that attract and satisfy customers, enabling customers willing to pay more for the satisfaction that they gained from the usage of the product. Activities that do not add value are such as transportation, searching, packing and unpacking. These non value-added activities are eliminated or minimized.
4.3.6 Quality control
Quality control is the process of checking the quality standards of work done or the quality of materials and components. Quality products will help to reduce cost and eliminate waste. This is because when the products are of low quality, there are possibilities of producing defective products and after customers purchased the goods, they will seek for goods return or exchange. These lead to extra waste and costs incurred. Besides, quality is a major influence on customer satisfaction or dissatisfaction. Therefore, quality control is very important for any production.
4.3.7
Improve productivity
Productivity is the measure of the efficiency of production system. One way of improving productivity is to reduce the cost of its inputs while maintaining the level of its output. Productivity can also be improved by making better use of the inputs to the operation, and thus minimizing wastage. By improving productivity of the organization, it will achieve better efficiency.
4.3.8 Short lead time
A lead time is the period of time between the initiation of any process of production and the completion of that process. In the manufacturing environment, lead time reduction is an important part of lean manufacturing, therefore one process waiting for the next is highly inefficient. This creates work in process inventory and is the key reason lead times are much longer than they should be. Manufacturers must think of making products in hours, instead of days or even weeks. Non-value added activities that consumer resources and waste time such as waiting, setup time, loading and reloading material, must be eliminated.
4.3.9 Customer Satisfaction
In any organization, customer satisfaction is the number one priority. Organizations must ensure that customer satisfaction is achieved because customers' satisfaction also means profitability. It can be achieved by providing quality goods at reasonable price, offering prompt delivery and providing good after-sales-service. If customers are dissatisfied with what the organization offered, they will deal with your competitors in the future but not you. This makes the organization lose customers as well as decrease in overall profitability.
4.4
The seven types of waste from Toyota Production System (TPS)
Seen as the leading practitioner and the main originator of the lean approach, the Toyota Motor Company has progressively synchronized all its process simultaneously to give high-quality, fast throughput and exceptional productivity. It has done this by developing a set of practices that has largely shaped what we call lean or just-in-time but which Toyota calls the Toyota Production System (TPS).
Please refer to appendix 7 and 8 (Page 32, 33) for the Toyota Production System and some pictures of Toyota production.
Waste from over production
Producing more than what is required by the customer or marketplace which generate unnecessary inventory
Waiting time
A worker waiting for a machine to finish a cycle, waiting for a supervisor to answer a question, waiting for information or materials reflects an interruption to flow and must be eliminated.
Waste from transportation
Multiple handling or movement of products does not add value to the product.
Processing
Unnecessary processing steps should be eliminated.
Inventory
Work in progress is material between operations as a result of large lot production or processes with long cycle time. This reflects system problems.
Waste of motion
Searching for tools or parts due to the inappropriate location of these items is considered as a waste of motion.
Defectives
Producing defective products is pure waste. Prevent the occurrence of defects instead of scrapping or repairing.
4.5
Benefits that Toyota Gained from Lean Manufacturing
Below are some examples of successfulness that Toyota gained from the lean manufacturing they adopted. Toyota is clearly doing something right. These are the results of the commitment, passion and the pursuit of excellence. For a manufacturer to become lean and follow Toyota's footstep is possible but not easy.
Fact 1
Toyota plant in Kentucky is Toyota's largest plant in the world outside Japan. It has a total throughput time of just 22 hours. In other words, they operate on two 10-hour shifts per day. The coils of steel received first thing on Monday morning will then roll off the assembly line as finished automobiles, sometime at the early of Tuesday morning.
Fact 2
In 2004, the Toyota Motor Company had operating income of 9%. This was 45% higher than its nearest U.S. competitors.
Fact 3
Toyota U.S. market share has grown faster than any other major competitors. Since 1990 to 2005, Toyota's market share has a positive changed as much as 61%.
Fact 4
In 2004, Toyota has less than a dozen of re-calls. Their US competitors have over 100 re-call every year.
Fact 5
In the past 20 years, Toyota has created over 50,000 jobs in the United States, while competitors are forced to lay workers off as more and more plants are closed down.
5.0
Conclusion
Foreign direct investment overall has greater benefits that problems to the host countries. One of the advantages is that it is able to help in the economy growth of the host country. Several methods of foreign direct investment such as licensing and franchising are more common types of methods. For an example, Mc Donald's is a very successful franchising company.
Lean manufacturing is a very popular manufacturing method in these days. Toyota is one of the very successful companies that had successfully adopted lean manufacturing in Toyota production process. This has lead to numerous benefits to Toyota Company itself as well as to the host countries.
Finally, I would like to say that Foreign Direct Investment is very important in these days. Without FDI, there will not be a fast growth of economies of countries. It helps to create more job opportunity which reduces unemployment level, and allowed resource transfer.
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<http://www.bawtc.com/article.asp?PartnerId=&ArticleID=17>
Multinational and Participation Strategies, n.d., viewed on 26th March 2008
<http://www.swlearning.com/management/cullen/mm3e/isc/powerpoint/ch05.ppt>
One Piece Flow manufacturing, n.d., viewed on 29th March 2008
<http://ezinearticles.com/?One-Piece-Flow-Manufacturing&id=914983>
Pull System, n.d., viewed on 29th March 2008
<http://elsmar.com/Pull_Systems/sld009.htm>
Pull System, n.d., viewed on 29th March 2008
<http://www.1stcourses.com/pull.html>
Strategic Alliances, n.d., viewed on 27th March 2008
<http://www.advfn.com/money-words_term_4772_strategic_alliance.html>
Strategic Alliances, n.d., viewed on 27th March 2008
<http://www.ea2000.it/2-04pellicelli.pdf>
Toyota, n.d., viewed on 31st March 2008
<http://www.shmula.com/291/toyota-motor-corporation-company-history>
Toyota, n.d., viewed on 31st March 2008
<http://www.toyota-industries.com>
Value Added, n.d., viewed on 30th March 2008
<http://www.isixsigma.com/dictionary/Value-Added-134.htm>
Appendix 1: Foreign Direct Investment Confidence Index 2005
Source: http://www.atkearney.com/main.taf?p=5,3,1,140,1
Appendix 2: Examples of some franchised company in different countries
Appendix 3: Lean Process
Source: http://www.apwa.net/Images/Publications/Reporter/LeanProcess.jpg
Appendix 4: Pull System vs. Push System
Source: http://elsmar.com/Pull_Systems/sld009.htm
Appendix 5: Batch Processing vs. Continuous Flow Processing
Source: http://www.mamtc.com/lean/images/LEAN_IMG_flowslide.gif
Appendix 6: Continuous Improvement vs. Breakthrough Improvement
Source: http://managementcraft.typepad.com/2weeks2abreakthrough/2005/05/what_is_a_break.html
Appendix 7: Toyota Production System
Appendix 8: Pictures of Toyota Production