In this, there is a brief discussion on the points mentioned in Principle 11 and 12 of The Toyota Way by Jeffrey Liker. The slide contains important points along with the examples.

1. Principle 11:
Respect your Extended Network of Partners
and Suppliers by Challenging them and
Helping them Improve

2. Supplier’s Comments on -
American Auto
 They have inexperienced
engineers
 No mentality of
learning(improving)
 Relationships are
deteriorated, no trust in
them
 Morale of the Supplier is
gone down
Toyota
 They improve their own
system and share the skill
 Takes effort to improve us
 Reward system helps
achieve more success
 More opportunity to make
Profit at Toyota

3. Approach to Supplier Relationships -
American Auto
 Building a Supplier
Development Centre
 Not reaching to the
supplier, but instead
calling them into a fancy
hub
 No understanding of
Supplier’s Process
 Aiming directly for Cost-
reduction
 Focusing on Carrot-and-
stick management
 No patience in building
Relation with the Supplier
Toyota
 Building a Trustful
Relationship with
patience
 Getting involved with the
Supplier for solving
problems
 Learning with the Supplier
 Morale boosting challenges
for them
 Aiming at continuous
improvement of supplier
and itself

4. Find Solid Partners and Grow Together
to Mutual Benefit in Long Term
“Achievement of business performance by parent company through
bullying suppliers is totally alien to the spirit of the Toyota
Production System.”
- Taiichi Ohno
 Respect – Having high expectations from suppliers and
treating them fairly and teaching them
 Suppliers became part of the Toyota family once they
both had trust in each other
 Goals that are to be achieved are made clear to the
Supplier, so they get habitant to follow the Toyota
Production System

5. Toyota’s approach to Logistics Partnership -
 Cross-docking used to achieve efficient pick up from
suppliers and just-in-time delivery to the Assembly
plant
 To get the parts just-in-time in the US and Canada
plants, they developed ‘Transfreight’ for supplying
parts
 They developed it since 10 years and it became a
fully efficient plant
 Continuous flow of parts is achieved due to cross-
docking
 The supplier, cross-docking manager, the driver of
the loaded trucks and the assembly plant are
completely aware of the tight Just-in-time schedule

6. What’s Cross-docking?
Taking
deliveries from
distant
suppliers
Temporarily
store the
pallets of
material
Load the trucks
with mixed
parts as rqd by
the plant

7. Results of this Approach -
Cross-
docking
approach
Just-in-
time in
American
continent
Reduction in
Cost of
transporta-
tion &
inventory
Reduced
the
number of
trucks
Continuous
improveme
-nt of
Transfreigh
-t

8. Working with supplier for mutual
learning of TPS
 Toyota learns by doing processes with the suppliers
 Toyota wants its suppliers to follow TPS just like
Toyota does
 Cost cutting profit is generally taken from the
suppliers by teaching them various techniques
 Jishuken – One of the may tools that allows Toyota
to learn mutually

9. Benefits
of
Jishuken
75% Red.
Inv.
124% rise in
productivity
Space
reduction
Improved
Qlty.
Emergencies
avoided

10. Saving Sick Suppliers
 Toyota jumped in to help its suppliers excel
 They had 5 levels of emergency signals
varying with condition of the supplier
 Toyota nurses out their supplier out of this
sickness
 SIC – Supplier Improvement Committee

11. Developing Extended Learning Enterprise
Maslow's Hierarchy of Needs

12. Developing Extended Learning Enterprise
Supply Chain as
Maslow’s Hierarchy
1. Fundamental issues need to
be addressed
2. Building relations and maintaining them
3. Mentioning clearly what do we want from the
supplier. No confusions.
4. When the first three basic steps are
achieved, we can aim for enabling sys
5. When there is trust and a sense of
belonging, industries can become
learning enterprise
6. Stable growth is necessary in this
hierarchy.
7. Easy to climb up and fall down,
difficult to maintain.

13. Principle 12:
Go and see for Yourself to Thoroughly
Understand the Situation(Genchi
Genbutsu)
“Observe the Production floor without preconception and with a blank
mind. Repeat why five times to every matter.”
- Taiichi Ohno
Genchi – Actual location Genbutsu – Actual Materials
Gemba = Genchi Genbutsu

14. Deeply Understand and Report What you see
Think and speak based on various
proven information and data
Go and confirm the facts
You are responsible for reporting
information
Take adv of Wisdom and experience,
to send gather and discuss info.

15. “Data is of course important I manufacturing, but I place
the greatest emphasis on facts”
- Taiichi Ohno
Ohno
Circle
Deep
Observatio
n
Observe
and as
Why?
Find the
true
meaning of
Statistical
data
Identify
and
Eliminate
MUDA

16. • In the US, most large
companies, the president is
the King
• One cannot have a
discussion with him
directly in case of some
problem
• Different standard of office
spaces can be used to find
out the rank of the person
Whereas in The Toyota Way,
• There is presence of
different standard of
people based on their
qualifications
• But, this doesn’t separate
them from getting their
hands dirty
• They are easily
approachable to all level
of people in the Industry
• They learn along with
the people and share their
insights based on their
hands-on experience

17. Examples
1. 2004 Sienna Minivan model
 Chief Engg Yuji Yokoya made a road trip in the
North America
Results –
 Improved design and version of highly ranked
minivan
 It became the bigger, faster, smoother, quieter, and
about $1000 cheaper