Page 313 - The Toyota Way Fieldbook

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wanted this expert housed at corporate headquarters, but Toyota insisted he be
assigned to one division so he could get more deeply involved in supplier
development activities on the floor. The Toyota executive in charge explained:

We dispatched our TPS expert to Delphi to help their supplier support engineers
have more of a Toyota Way of thinking and method, but we needed him back in
two years. They requested to extend that assignment, and we suggested they send
a senior engineer or someone from that group to our OMDD to be developed just
like a Toyota engineer is developed—here is the project company, project, observe
and make improvements. It is a very traditional student-sensei approach.
Complementing the supplier development activities, value engineering typ-
ically takes place in the early product development phase. Before the product is
in production there are many opportunities to cut cost through common parts,
simplification of the product—such as reducing the number of parts—and
designing it to reduce the amount of labor required for assembly. After the
product is in production, value analysis is the analogous process to redesign it
to take cost out. Toyota was able to take literally billions of dollars in cost out of
the Camry over time through product redesign. They do this through their
product development function, and in this case share savings with suppliers.
Clearly, Toyota’s approach to supplier development is distinctive. For one
thing Toyota itself is a lean model, arguably the lean model. So they have some-
thing to teach. But perhaps more important, the context is one of cooperation and
learning, and they make suppliers better in a holistic sense. It is not just about the
individual project and the savings they can extract from the project—Toyota gets
its annual price reductions anyway. The teaching they do is to enable the supplier
to give this price reduction to Toyota while still making money on the business.
Is your company in a position to mentor suppliers? Have you developed the
internal capability so you have something to offer to your suppliers? Are you
willing to make the investment in making your suppliers better so they will
give you better cost, quality, and delivery performance?

Continuous Improvement and Learning
The result of working on the six base levels of the supplier partnering hierarchy
is the foundation for kaizen (continuous improvement) and learning. Typically,
learning is thought to occur at the individual level, and if these individuals
leave the organization or move to another assignment, their learning is lost.
Preserving what is learned at the organizational level is far more challenging,
and learning at the enterprise level seems near impossible. But Toyota has
developed this core competency.
With a solid foundation, the key to enterprise learning is the development
of standardized processes that get refined and improved. Without standards
there can be no learning. Standards go beyond documented procedures to
shared tacit knowledge of the right way to do things.