PLANNIG FOR LOGISTIC
ASSIGNMENT: 01
ARTICLE REVIEW
SHARATH M N
20222MLS0036
SECTION 16
SUBMITTED TO:
RAMESH MUTHUSWAMI
KEIRETSU
Introduction About Keiretsu
The phrase "keiretsu" is native to Japan and is very common in the
corporate world there. It refers to a type of alliance network or business
conglomerate that is defined by close-knit partnerships between a
number of businesses, frequently with mutually reinforcing ownership
shares and shareholdings.
These alliances usually cover a wide range of corporate collaboration
activities, including knowledge sharing, cooperative research and
development, and mutual investment, going beyond simple supplier-
customer partnerships.
Keiretsu arrangements emphasize long-term cooperation, trust, and
loyalty among member enterprises. They have their roots in Japanese
culture and customs.
The ability of keiretsu to facilitate vertical integration within connected
industries is one of its main characteristics. Member businesses
frequently operate in several economic sectors, fostering synergies and
efficiencies in marketing, distribution, and production.
Among the collaborating enterprises, this integration promotes a sense
of mutual dependency and collaborative progress.
Additionally, by spreading out corporate interests across several
industries, keiretsu arrangements promote resilience against economic
downturns and risk-sharing.
Types of keiretsu:
Horizontal keiretsu: Led by a bank that provides financial services
to member companies. (e.g., Mitsubishi UFJ Financial Group keiretsu)
Horizontal keiretsu involves businesses operating within the same
industry or supply chain, whereas horizontal keiretsu consists of
businesses operating in separate industries but sharing ownership
connections. Prominent horizontal keiretsu organizations that engage
in a variety of industries, including banking, manufacturing, trading,
and real estate, are Mitsubishi and Sumitomo.
Vertical keiretsu: Focuses on cooperation between manufacturers,
suppliers, and distributors within a specific industry. (e.g., Toyota
keiretsu)
On the other hand, Toyota's relationships with its suppliers and
subcontractors represent a well-known vertical keiretsu arrangement,
aimed at ensuring quality control, cost efficiency, and just-in-time
production.
Keiretsu have been instrumental in driving Japan's economic growth
and competitiveness, particularly during the post-war period of
rapid industrialization. By fostering collaboration, knowledge
exchange, and resource pooling among member companies, keiretsu
have helped fuel innovation, streamlined operations, and enhanced
overall productivity.
Impact of keiretsu:
Positives:
➢ Promote cooperation and long-term planning
➢ Facilitate technology transfer and knowledge sharing
➢ Reduce transaction costs
Negatives:
➢ Can hinder competition and innovation
➢ Make it difficult for foreign companies to enter the Japanese
market
Current state of keiretsu:
➢ Keiretsu are still present in the Japanese economy, but
their structure and influence have changed.
➢ They are less hierarchical and more market-oriented than in the
past.
➢ The importance of cross-shareholding has declined.
ADVANTAGES
➢ Better coordination
➢ Increased efficiency
Disadvantages
➢ Complacency & inefficiency.
➢ Funds availability may result in risky activities.
Toyota Keiretsu
In Japan's business environment, the Toyota keiretsu, sometimes
referred to as the Toyota Group, is a classic illustration of a vertical
keiretsu. The history and present-day position of the Toyota Group,
which started out small, provide insights into the development and
importance of keiretsu structures.
The history of Toyota begins with Kiichiro Toyoda's 1937 foundation
of the company, which was then a branch of the textile machinery
business Toyoda Automatic Loom Works. Toyota began producing cars
under Kiichiro Toyoda's direction, and this was the beginning of what
would grow to be one of the biggest automakers in the world.
Toyota grew rapidly after World War II thanks to the adoption of lean
manufacturing techniques and the creation of the well-known Toyota
Production System (TPS).
Central to Toyota's success has been the establishment of close-knit
relationships with its suppliers and subcontractors, forming the core of
the Toyota keiretsu. These relationships are characterized by mutual
trust, long-term partnerships, and shared goals such as quality
enhancement and cost reduction.
The Toyota Group encompasses a network of companies involved in
supplying parts, components, and services vital to Toyota's automotive
manufacturing operations.
Suppliers within the keiretsu often collaborate closely with Toyota,
with some even embedding their engineers within Toyota's facilities to
facilitate seamless integration into the production process.
Toyota's keiretsu has changed over time in response to shifting market
conditions and globalization. Toyota had difficulties as it extended its
operations throughout the world due to variations in legislative
frameworks, cultural standards, and business practices.
The Toyota Group's essential values of mutual trust, cooperation, and
continual progress have not changed despite these modifications.
Toyota has been integrating digitalization, automation, and cutting-
edge technology in its supply chain in recent years as part of its ongoing
innovation and adaptation efforts.
Electrification, autonomous driving, and mobility services are just a
few of the initiatives that demonstrate Toyota's dedication to leading
the industry in innovation while upholding its reputation for
dependability and quality.
Presently, the Toyota Group maintains its prominent position in the
worldwide automotive sector, widely recognized for its tenacity,
flexibility, and progressive outlook.
Toyota's supply chain management and commercial connections are
still shaped by the fundamental ideas of cooperation and partnership,
even if the original keiretsu structure has undergone changes.
Keiretsu At Maersk India
Maersk India does not have a keiretsu. A keiretsu is a group of Japanese
companies that are linked together by cross-shareholdings and other
business relationships. Maersk is a Danish company, and it does not
have any keiretsu relationships with any Indian companies.
Maersk India is a subsidiary of Maersk Line, which is the world's
largest container shipping company. Maersk India has been operating
in India since 1995, and it offers a wide range of shipping and logistics
services. The company has a strong presence in India, with offices in
Mumbai, Chennai, Delhi, and Bangalore.
Maersk India is committed to providing its customers with the best
possible service. The company has a team of experienced and dedicated
professionals who are committed to meeting the needs of its customers.
Maersk India is also committed to sustainability, and it is working to
reduce its environmental impact.
Here are some additional information about Maersk India:
➢ Maersk has been operating in India for over 100 years.
➢ Maersk is the largest container shipping company in India.
➢ Maersk employs over 7,000 people in India.
➢ Maersk has a network of over 50 offices and warehouses in
India.
Here are some of the services offered by Maersk India:
➢ Ocean freight
➢ Air freight
➢ LCL (less than container load)
➢ FCL (full container load)
➢ Project cargo
➢ Warehousing and distribution
➢ Customs clearance
➢ Supply chain management
Maersk India is a reliable and trusted partner for businesses of all sizes.
The company has a proven track record of providing high-quality
service at competitive prices. If you are looking for a shipping and
logistics company that can meet your needs, Maersk India is the perfect
choice.
Maersk does have a number of partnerships with Indian companies.
These partnerships include:
➢ A joint venture with APM Terminals to operate a container
terminal in Mundra, Gujarat
➢ A joint venture with Snowman Logistics to provide cold chain
logistics services
➢ A partnership with the Adani Group to develop a logistics park
in Navi Mumbai
Here are some additional information about Maersk India:
➢ Maersk has been operating in India for over 100 years.
➢ Maersk is the largest container shipping company in India.
➢ Maersk employs over 7,000 people in India.
➢ Maersk has a network of over 50 offices and warehouses in
India.
THANK YOU
