high levels of complexity. Our initial approach is to try to understand what that
competitive level is. We have global vehicle programs so we can work with
Europe and Toyota Asia Pacific and understand what is the Toyota competitive
level and challenge people in North American to get to that level.
It’s important to realize that there is no “one size fits all” strategy for devel-
oping these characteristics of partnering. Some companies might start out with
information sharing and some with supplier development. However, they
shouldn’t forget the long-term vision of developing all of these characteristics
as a system. The ultimate goal should be to create a lean learning enterprise.
Case Study: Developing a Lean Supply Chain at Delphi
Delphi is a world leader in mobile electronics and transportation compo-
nents and systems technology with approximately $28 billion in annual
sales, 185,000 employees, and 171 manufacturing sites in 40 countries.
Delphi purchases from over 4,000 direct material suppliers. Since
becoming an independent company in 1999, they immediately start-
ed on a lean journey. It was a top priority to shed the waste and high
costs impacting Delphi’s operations. As Donald L. Runkle, the former
vice chairman, often stated, “Lean enterprise is Plan A! There is no
plan B!”
Delphi’s first step in becoming lean focused on its manufacturing
sites. For several years they had been studying and embracing the
Toyota Production System. Delphi developed and documented its own
system, structure, and processes, and called it the Delphi Manufacturing
System (DMS). It’s a common, global production system that embraces
all functional areas and focuses on creating lean products, lean purchas-
ing, and lean internal and external manufacturing.
Though it was a rocky road, over time Delphi enjoyed considerable
success, with a relatively deep penetration of lean in most of its plants.
Every plant had done a considerable amount of work, and an impressive
20 different plants were awarded the Shingo prize for excellence in
manufacturing. Applying for the award has been encouraged by Delphi
to provide a stretch target and provide recognition for achievements,
along with external visibility. The Delphi Manufacturing System was
strongly supported up to the level of the chairman and CEO, J. T.
Battenberg III, and the message was clear: DMS is not optional.
In 2002, Delphi hired R. David Nelson as vice president of global supply
management with the charge of spreading lean through the supply base.
A former vice president of purchasing for Honda of America, Nelson
had a deep understanding of the “Honda Way.” He brought that toChapter 12. Develop Suppliers and Partners 297