‘Global complementation’ refers to a process that restructures production plants from being local producers of a good into being able to create the same product for export. This concept was first seen during a crisis situation occurring in a Toyota manufacturing plant in Thailand. Sales of Toyota cars dropped by fifty percent within a month in terms of local sales. Toyota made the decision to refurbish this plant into an export-focused facility. It took time but resulted in a beneficial outcome, with the Thailand plant being able to manufacture products for non-local sales. Toyota representatives stated that if the plant was initially designed to switch between local and international sales, the loss would be minimal.
The phrase ‘global complementation’ was coined by Toyota themselves and essentially can be summarized as a strategy that transforms old manufacturing plants to be able to shift between producing cars for local markets and manufacturing for export. It prioritizes flexibility and adaptability while minimizing the loss and time cost of restructuring plants only after observing market fluctuation. Toyota themselves described the strategy as a crisis that was turned into an opportunity.
The strategy has a number of advantages and disadvantages. The strategy is an expensive and time-consuming process as Toyota will have to restructure every plant they have in the world to be prepared for their losses in any market. If they continue to observe market failures, their transformation of the plants will have no value as there will be no demand for their products. However, this strategy also allows for plants to continue working instead of simply being shut down and thereby continue to provide jobs and profit. Additionally, the initial flexibility of new plants can be beneficial in the long term.