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Building Deep Supplier Relationships
Many experts agree that American firms, like their Japanese rivals, should build supplier keiretsu: networks of vendors that learn, improve, and prosper in sync with their parent companies.
As history has shown, however, that’s easier said than done. Some U.S. corporations created supply chains that superficially resembled those of their Japanese competitors, but they didn’t alter the nature of their relationships with suppliers. As a result, relations between U.S. manufacturers and their suppliers have sunk to the lowest levels in decades.
But reports of keiretsu’s demise are overblown. The Japanese supplier-partnering model is alive and well—in North America as well as Japan. During the past ten years, automakers Toyota and Honda have struck successful partnerships with some of the same suppliers that are at odds with the Big Three and created effective keiretsu across Canada, the United States, and Mexico.
So how do Toyota and Honda do it? The authors, who have studied the American and Japanese automobile industries for more than 20 years, found that Toyota and Honda have built great supplier relationships by following six steps. First, they understand how their suppliers work. Second, they turn supplier rivalry into opportunity. Third, they monitor vendors closely. Fourth, they develop those vendors’ capabilities. Fifth, they share information intensively but selectively. And sixth, they help their vendors continually improve their processes.
https://hbr.org/2004/12/building-deep-supplier-relationships
Supplier Development Toyota
Toyota supplier development:
- Jishuken of OMCD to teach TPS for eliminating waste. Jishuken: self study group, creating people capability for improvement.
- Kyohakai(?), supplier association maintained by Purchasing teaching TQC(?). Kaizen in higher management level, cost control, company wide point of view, and close relation with part pricing.
There are no formal coordination between those two function. This creates no barrier between kaizen learning and fear of price adjustment due to cost benefit resulted from improvement.
