The Toyota Product Development System by James Morgan

Author:James Morgan
Language: eng
Format: epub
Publisher: Taylor and Francis
Published: 2006-04-15T00:00:00+00:00

This does not mean “easy street” for suppliers. The suppliers the authors interviewed consistently rate Toyota as their most demanding customer—demanding in timelineness, innovation, quality, and cost reduction. For example, when Toyota discovered the prices it was paying suppliers for many key parts were above the lowest prices competitors paid globally, it issued a new target for all key suppliers as part of a program designated CCC21. The new program asked suppliers to reduce prices by 30 percent for the next model line; typically this would cover a period of about three years. Instead of rebelling, suppliers agreed to the new terms. Why? Because Toyota agreed to work with them on cost reduction, even offering to help suppliers change the product design through value engineering. Because it responds to supplier concerns with integrity and capability, Toyota has established a great level of professional trust with its suppliers, closely paralleling the trust that Toyota engineers have established with each other.

As the 13 principles of our LPDS model show, Toyota has developed a sophisticated system that encompasses people, processes, and tools and technology and extends to all partners in the lean enterprise. As Toyota partners, suppliers must follow the same or equivalent processes for design and manufacture. Moreover, once accepted into the Toyota family, they are taught to be effective partners. Cost reduction is one outcome of the selection/teaching process. Toyota is a master at cost reduction internally and expects suppliers to master this discipline as well. In a lean PD system, you cannot “bully suppliers” and squeeze the life out of them for a price reduction. The bottom line, though always important, does not drive supplier relations. Developing excellent processes and quality products is the goal, and to achieve this, companies need to extend the learning enterprise and truly partner with their suppliers.

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