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Demand Fluctuation and Supply Chain Integration: Case Studies of Japanese Firms

In: Perspectives on Global Development and Technology
Authors:
Mizuki Kobayashi College of Economics, Ritsumeikan University Japan

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Takahiro Tomino School of Commerce, Meiji University Japan

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Junjiro Shintaku Manufacturing Management Research Center, Faculty of Economics, The University of Tokyo Japan

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YoungWon Park Graduate School of Humanities and Social Sciences, Saitama University and Manufacturing Management Research Center, Faculty of Economics, The University of Tokyo Japan

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Abstract

Current Japanese oems utilize both make-to-stock (mts) and make-to-order (mto) to cope with demand fluctuation. In this article, we study how leading manufacturing firms utilize mts and mto by observing two case studies, Toyota’s and Omron’s operations in China. Production and delivery of component suppliers are based on the advance notification from their manufacturers. For this, most automotive firms integrate marketing channels internally, however, most healthcare firms do not. Consequently, it is difficult to forecast and control demand accurately like automotive firms. In this sense, for healthcare firms, it is a tremendous challenge to respond to demand fluctuation through integration with external marketing agencies. We show both companies strategies to mix mts and mto along with integrating internal and external parties.

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