This document discusses Toyota's approach to developing strong partnerships with suppliers. It provides examples of how Toyota invests in suppliers to help them improve, such as through the Supplier Improvement Committee that helps "sick" suppliers address issues. The document also contrasts Toyota's approach with Ford's, noting that Toyota takes more responsibility for the supply chain and engages in continual improvement efforts with suppliers, while Ford had higher logistic costs and put more responsibility on weaker vendors. Finally, it discusses how Toyota maintains internal capability while partnering with suppliers through initiatives like joint ventures and working with suppliers on mutual learning of Toyota Production System principles.

1. Respect Your Extended Network
of Partners and Suppliers
by Challenging Them and
Helping Them Improve
Chapter 17: Principle 11:

2. A survey conducted by J.D. Power of automotive
suppliers found that Nissan, Toyota, and BMW
are the best North American automakers in
promoting innovation with their suppliers
(Automotive News, Feb. 24, 2003).
Toyota has been rewarded time and time again for
its serious investment in building a network of
highly capable suppliers that is truly integrated
into Toyota’s extended lean enterprise.

3. February 1, 1997, a fire destroyed an Aisin factory. Aisin
is one of Toyota ‘s biggest and closest suppliers.
P-valve which is an essential
brake part used in all Toyota
vehicles worldwide at that time
32,500 per day.
200 suppliers self-organized to get P-valve production started within
2 days.
63 different firms took responsibility for making the parts piecing
together what existed of engineering documentation, using some of
their own equipment,rigging together temporary lines to make the
parts, and keeping Toyota in business almost seamlessly. The power
of the supply chain is far more than information technology. It is
the power of ingenuity and relationships.

4. Extended familyExtended family
• Without solid partners cannot build a single
vehicle because they do not have enough
quality parts
• New suppliers- must show their sincerity and
commitment to Toyota standard
• Challenging the suppliers

5. •Ford
• Nirvana – logistic cost is very high
• Every part every day – small batch everyday
- great but not for every part
• Put the responsibility to an weak outside
vendor
• The vendor do not know the Ford way –
Different goal- Conflict
Ford vs. Toyota

6. Ford vs. Toyota
•Toyota
• Cross-docking – slowly extended over a 10-year
period
• Joint venture TNT (US) and Mitsui (Toyota family)
• Mixed loads – 12 times per day
−System with several principle: Flow, visual
indicators, mistake-proofing devices
− Hejunka – even flow of parts – Balance
• Reasonable cost – Continually improving and
reducing cost

7. Partnering with Suppliers While
Maintaining Internal Capability
• We act with self-reliance
• The insulated gate bipolar transistor IGBT
• Panasonic EV Energy , NIPPON , DENSO
Working with Suppliers for
Mutual Learning of TPS
• We act with self-reliancIn the U.S., BAMA (Bluegrass
Automotive Manufacturers Association)
• Operations Management Consulting Division(OMCD)
• Toyota Supplier Support Center (TSSC)

8. Developing an Extended Learning Enterprise
Means Enabling Others

9. Saving “Sick” Suppliers Through TPS
• Don Jackson : 1998, Supplier Improvement Committee (SIC)
HR would do the HR investigation./ Quality would do a quality audit./
Production engineering would examine the manufacturing side.
• The Japanese called the “sick supplier club”.
• Case of Trim Masters (TMI) and just-in-time Nicholasville,
Kentucky, Seat plant for Avalon and Camry.
• The computer system went down one day for only 3 hours. (+รูปคอม
เจ๊ง)
• “Fix the problems or we will drop you”
9
a Quality or Production
Problems. created a system of evaluating
and classifying suppliers.