Page 300 - The Toyota Way Fieldbook

Chapter 12. Develop Suppliers and Partners 275

touted as a supply chain solution that would significantly improve quality, cost,
and delivery. Yet in implementing the balanced scorecards, companies often did
it in the context of conflicted, adversarial relations with suppliers. These condi-
tions made the balanced scorecard a punitive measurement system to identify
underperformance. Suppliers would placate the customer through short-term
actions, not to solve the root cause problem, but to make the numbers look good.
In contrast, though Toyota also uses rigorous measurement systems to help
control supplier performance, they do it in an environment of open communi-
cation and trust. In short, jumping up to particular control systems without a
foundation of mutual understanding and a structure that supports cooperative
behavior leads to game playing and short-term responses.
Of course, supplier partnering is not all fun and games. Being a partner to
Toyota is not about Toyota being soft or forgiving. As pointed out in The Toyota
Way, fairness, high expectations, and challenge characterize how Toyota treats
suppliers. This is business, and the goal is to make money, but not at the
expense of suppliers. As Taiichi Ohno, father of the Toyota Production System
(TPS), stated:
Achievement of business performance by the parent company through bullying
suppliers is totally alien to the spirit of the Toyota Production System.
The key word is “parent.” It implies leadership and long-term relationship.
It connotes trust, caring, and mutual well-being, yet also signifies discipline,
being challenged, and improvement.

Seven Characteristics of Supplier Partnering
What follows are the seven characteristics of Toyota’s supplier partnering, as
described in Table 12-1. We’ll look at them from bottom to top and discuss the
steps you would need to follow to bring each element of the partnering rela-
tionship to fruition.

Mutual Understanding
The basis for the relationship starts with understanding, and it does not come
easy. What does it mean for a company to understand its supplier partner? For
Toyota, it’s genchi genbutsu (actual part, actual place), reflecting its core philos-
ophy of going and seeing directly, to deeply understand the situation. The ques-
tion is whether you are willing to hit the road, get your hands dirty, and put in
the effort.
When Toyota first started to work with Metalsa, a frame and body compo-
nents manufacturer headquartered in Monterrey, Mexico, they spent time with
senior management and wanted to understand the company’s philosophy. They
appreciated the fact that Metalsa was originally a family-owned company, one