truth. The role suppliers play is too vital for Toyota to take a hands-off approach—
they do not want to leave parts reliability and product quality to chance. To
Toyota, the flip side of the same coin called trust is an effective control system.
Toyota has elaborate systems of measurement, target setting, and monitoring of
performance.
Toyota’s command central for supplied parts is a bit like the control tower
at a well-run airport. They know the status in real time of all parts suppliers.
Ask for any key delivery performance indicator for any supplier, and it is at the
fingertips of production control. Ask purchasing for charts and graphs of per-
formance over time on quality, cost, and delivery, and it is there.
If there is a near missed shipment, a quality problem, incorrect labeling, or
any glitch, it will surface immediately. Then Toyota is on the phone and
demands the supplier come to see them and explain the cause of the problem
and their planned countermeasures. They expect immediate responses to any con-
cerns about quality, cost, or delivery, when indicators are off target, and before
there are any serious performance threats to production. But these cannot be
just entry-level engineers talking. They expect the highest executive levels of the
supplier to get personally involved. These instances of problems are taken as an
opportunity to educate the supplier.
For example, a Toyota vice president of product development relayed an
example of a supplier that had a quality problem that was design related. The
vice president of the supplier was asked to come to the Toyota Technical Center
to discuss his countermeasures. When the VP showed up for the meeting, it was
obvious that he did not have a detailed understanding of the problem, its cause,
and the countermeasures. With a wink and a nod he assured the Toyota execu-
tives that he would take care of the problem immediately. The Toyota vice pres-
ident was stunned that this VP would come to the meeting so poorly prepared,
without seeing for himself what the real problem was. He asked him to go back
and find out what the real problem was and return for another meeting.
What the Toyota vice president was doing was educating. He was not inter-
ested in this particular case. He could have had a lower-level engineer talk to a
lower-level engineer at the supplier. He took the opportunity to create an object
lesson in the appropriate role of an executive of a Toyota’s supplier. They must
take responsibility and lead by example.
Control also extends to aggressive cost reduction initiatives. Toyota not only
gives the supplier a target, but carefully monitors progress in reducing costs to
achieve the targets. As an example, Toyota’s supplier, Trim Master, Inc., bids on
every new model (about every four or five years) and is expected to decrease
prices about 3 to 4 percent every year after the initial model introduction year.
The cost-cutting initiative by Toyota around 2000 was so aggressive it seemed
scary. The goal was to bring suppliers in America to the levels of global sources
singke
(singke)
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