Toyota Way Fieldbook : A Practical Guide for Implementing Toyota's 4Ps

Is Toyota actively seeking to replace American supplier partners with low-
cost suppliers in China and other low-wage countries? They may purchase an
occasional commodity part in these regions, but this is not a core part of their
strategy. A Toyota North American purchasing executive explained:

We get some savings from tier-two and tier-three suppliers sourcing overseas that

are passed through, but it is pretty rare for us to consider it directly because of the

supply chain complexity and risk. Distance and the political environment create

296 THETOYOTAWAYFIELDBOOK

Figure 12-3. Lean supply chain process

Philosophy

Eliminate waste in supply

chain

Performance measures

Total system cost, quality,

delivery

Principle

Suppliers are extensions of

learning enterprise

Strategy

Selectively outsource with

strategic partners

Reason

Optimize total vehicle

as a system for high

customer value

Effect

Best cost, best quality,

minimum inventory

Controls

Cost, quality, delivery

metrics

Results

Flexibility,

reliability, waste

reduction

Method

Develop 2-4 partners

per component

Tools

Cost management

system, VA/VE, lean

supplier development.

Supplier association