This chapter is divided into three parts: production issues, sourcing, and the Toyota quality management system and the implications of its recalls. It first discusses favorable country, technological, and product factors for centralized or decentralized production. This is followed by an illustration of how decentralization can enhance production flexibility and mitigate currency risk. While production is a value-adding activity, value-added tax (VAT) collection is common among countries. The concept of VAT is introduced, followed by an investigation into its impact on supply chain configuration in China. The second part focuses on sourcing, covering make-or-buy decisions, total landed cost, and dual sourcing. The final part discusses the Toyota quality management system and its 2009 recalls. The purpose is to appreciate its state-of-the-art quality management system and the successful application of continuous improvement to address production problems following its large-scale recalls in 2009.