Supplier Development Mexico
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Supplier Development Mexico



Presentation for Oct 6 Saltillo, Mexico manufactureres conference

Presentation for Oct 6 Saltillo, Mexico manufactureres conference



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Supplier Development Mexico Supplier Development Mexico Presentation Transcript

  • Supplier Development
    A company’s undertaking to improve its supplier capability.
  • Two Concerns
    Companies’ organizational capabilities to develop their suppliers
    Organizational capability as a subject taught to suppliers
  • Key questions
    What factors facilitate and a constrain a company’s attempt to replicate its organizational capabilities at suppliers?
    How to prevent leakage to competitors?
  • 3 Levels of Capability
    Improvement capability
    Evolutionary capability
  • Scope of activity
    Model-specific components
    Whole factory
    Whole company
  • Evolutionary
    Key suppliers
    Consistent set of incentives to learn
    Suppliers benefit
  • Long term relationship
    Joint problem-solving in developing “Black Box”
    Clear rule for sharing gains between customer and supplier
    Customer requirements
    Organizational support structure
  • Obstacles
    3 obstacles to the replication of organizational capability by suppliers
    Tacit nature of knowledge
    Class room training
    “We know more than we can tell.”
    It may take other groups than Supplier Development
    Supplier corporate governance
  • Toyota Case Study
    Toyota’s Production System and Toyota Quality Control are taught by two groups
    Capability for capability building
    Lower level of capability
    Jishuken (Self study groups)
    Lateral learning between suppliers
  • Origen of Supplier Development
    Toyota 1939 Purchasing rules
    “once nominated as Toyota suppliers, they should be treated as part of Toyota (as branch plants); Toyota shall carry out business with these suppliers without switching to others and shall make every effort to raise the performance of these suppliers.”
  • Keiretsu Shindan
    Post WWII
    Suppliers evaluated by:
    Existence of management policy
    Productivity improvement
    Quality Improvement
    Fulfillment of production plans
  • Supplier Development Structure
    Diffuse Total Quality thru:
    • Toyota QC Award
    • Management Kaizen plan
    • Supplier association
    Diffuse Toyota Production System thru:
    • Individual Assistance
    • Jishuken
  • TPS
    Relentlessly focused on the elimination of waste, exposes quality problems through line stoppages and forces management to fix the root cause of the problem.
    Teaching of TPS to suppliers
    Maintenance capability
    Improvement capability
  • TQC
    Quality control techniques
    HoshinKanri (policy deployment)
    Links shopfloorprocesses to policies of higher level management
    Evolutionary capability
  • Operations Management Consulting Division (OMCD)
    Charged to implement TPS
    Within Toyota
    Core suppliers
    Same training
    Same procedures
    Same engineers
  • KojoJishuken
    Autonomous study group
    Culmination of education and training
    Middle Managers
    First-Line Supervisors
    Most important repository of Kaizen
  • Jishuken Groups
    Helping suppliers improve their shopfloors
    Refining applications of TPS
    56 factories apart of 52 enterprises
    80% of Toyota’s spend
    Suppliers are cascading TPS to their sub tiers
    Annual supplier selection
    2 month critical focus
  • If and When Necessary
    Individual assistance given
    Quick results
    Suppliers profits plummet rapidly
    Not meeting launch targets
  • TQC
    Purchasing depart diffuses
    Responsible for Kyuohokai (Supplier Association)
    Forum for sharing information
    Regular seminars
    Study group meetings
    Training courses
    Member achievement
    Cost, quality, delivery and development
  • Toyota QC Award
    Motivate suppliers to adopt TQC
    Purchasing Dept. offers hands-on quidance
    Quality Assurance
    Cost Control
    Delivery management
  • TaishitsuKyuoka
    “Strengthening of one’s constitution”
    Cost and investment planning
    Cost control
    Process improvements
    Quality improvements
  • Kaizen
    To address major suppliers declining revenues and profits.
    Major task to help suppliers secure profits in the short term
    Short term recovery of loss making suppliers
    Longer term capability enhancement
  • Removing fear
    OMCD does share with Purchasing Planning Department
    All productivity gains between OMCD and Suppliers is kept confidential
    Suppliers would not participate in Kaizen
    Suppliers keep all gains
    Toyota expect benefits from improved supplier performance
  • Summary
    OMCD separate existence from Purchasing
    Facilitate know-how between internal factories and supplier factories
    Suppliers have incentive to enhance their evolutionary capability
    Short term fixing of problem and long term capability enhancement
    Suppliers taught TPS & TQC at the same time.