Page 321 - The Toyota Way Fieldbook

296 THE TOYOTA WAY FIELDBOOK

Philosophy
Eliminate waste in supply
chain

Principle
Performance measures
Suppliers are extensions of
Total system cost, quality,
learning enterprise
delivery

Strategy
Selectively outsource with
strategic partners

Tools
Results
Cost management Method
Flexibility,
system, VA/VE, lean Develop 2-4 partners
reliability, waste
supplier development. per component
reduction
Supplier association
Reason
Optimize total vehicle
as a system for high
customer value

Effect
Controls
Best cost, best quality,
Cost, quality, delivery
minimum inventory
metrics

Figure 12-3. Lean supply chain process

Is Toyota actively seeking to replace American supplier partners with low-
cost suppliers in China and other low-wage countries? They may purchase an
occasional commodity part in these regions, but this is not a core part of their
strategy. A Toyota North American purchasing executive explained:
We get some savings from tier-two and tier-three suppliers sourcing overseas that
are passed through, but it is pretty rare for us to consider it directly because of the
supply chain complexity and risk. Distance and the political environment create