Toyota Production System (TPS) is one of the most benchmarked business improvement strategies in modern industry. There are three main approaches applied as the companies try to emulate Toyota’s success which are the copy cat approach, the home-grown approach and Suppliers development as it stand out in the transformation effort. The most replicated activities that Toyota conducts on a routine basis is the suppliers development approach in the achievement of TPS. Based on the survey from Henke in 2010, shows that an annual North American original equipment manufacturer (OEM) has been ranked number one for supplier relations over the last seven years. The study shows that Toyota is superior to the major US and Japanese OEM’s in supplier communication, OEM assistance, and supplier profit and partnering. While Toyota may be ranked as one of the leading OEMs in the automotive industry for supplier working relations, it is not clear what parts of TPS plays a significant part in Toyota’s relations with the supply based. This work will be focus on the aspects of the Toyota Way that is used in supplier development for vehicle operations. The goal of this case is to quantify Toyota’s supplier development activities to better understand the aspects of understanding Toyota’s suppliers. It will be expected to provide new insight and understanding Toyota’s supplier development factors and relationships that lead to successful supplier development.
2.1 Purpose of Study
The primary objective of this case study was to formulate Toyota’s success using a variety of different approaches; most practitioners are not aware how Toyota replicates TPS at suppliers. The secondary objective was to investigate the in-house capabilities that are transferred from Toyota to suppliers as a way to more deeply understand how TPS can spread out.
2.2 Scope of Analysis
The findings in this case are shown that Toyota’s approval process doesn’t necessarily support major kaizen at suppliers yet does encourage minor day-to-day kaizen. End up, the Toyota’s suppliers does not have to be adopted by suppliers, but does represent “A Way” to interact with suppliers to drive both culture and productivity simultaneously. 2.0 LITERATURE REVIEW
Supplier development has long been used by compete globally. Since it used, managing the supply chain is increasingly important as success is tied to the capabilities and performance of suppliers. Suppliers effect on an organization’s quality, technology, delivery, flexibility and profits. The performance of suppliers is often viewed as one of the leading contributors to upgrade an organizations competitive advantage. The first user of supplier development was Leenders in 1966 in a doctoral dissertation to describe efforts by manufactures to increase the number of viable suppliers and to improve supplier’s performance. It is a way to move and imitate an organization’s in-house capability to improve a supplier’s performance. There are two most common imitation approaches which are system transfer and process transfer. System transfer is about something that can be applied to the whole company while process transfer is about a specific practice that can be applied to a model line or product. This approaches might be describes the efforts of a buying firm to increase a supplier’s performance. Based on the performed approaches, in the most traditional terms, supplier development tries to qualify, integrate, and improve supplier capability. Managing supplier relations has historically been the responsibility of an organization’s purchasing department, sometimes referred to as procurement, sourcing or materials management. Purchasing basic function is about to maintain a network of viable and capable suppliers while the purchasing traditionally has supplier sourcing responsibilities supplier integration responsibility and ongoing supplier quality assurance responsibilities. Engaging in...
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