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Having the supplier store them still uses the same distribution network as if they were shipped directly. If Toyota stored them, they'd need to develop an equal
by goodoldneon 5y ago
Having the supplier store them still uses the same distribution network as if they were shipped directly. If Toyota stored them, they'd need to develop an equally robust network from their warehouses to their factories. It's more expensive to maintain your own distribution network and warehouses than to just pay the supplier to store stuff
- lifeisstillgood 5y agoThat's ... brilliant. I genuinely had never thought of that
- imtringued 5y agoTo be more specific, it is cheaper to maintain warehouses for the products your company produces and more expensive for products your suppliers are producing. 1 chip warehouse per supplier vs 1 chip warehouse for each customer. Toyota is an expert in storing cars, it is not an expert in storing thousands of different car parts.