Page 89 - Toyota Under Fire

TOYOT A UNDER FIRE

During the recession, Toyota’s on-site purchasing group
communicated with the suppliers intensively and encouraged
them to follow Toyota’s lead in keeping their employees on. The
TMMTX team invited suppliers to participate in its kaizen train-
ing and workshops so that they could all “level up” together.
Each supplier had its own approach to dealing with employ-
ment security, but all of them diverted some workers to kaizen,
thus strengthening their operation and their workforce. One of
the largest suppliers on site explained: “The kaizen projects saved
us on tool changes and process steps. It improved ergonomics
and increased the productivity and morale of our people.”
Some suppliers, without the resources of Toyota, had to find cre-
ative approaches to stay in business while also preparing for the future.
For example, one company asked for volunteers to go on unemploy-
ment while the company continued to pay their full benefits. Enough
people took that option that involuntary layoffs were not necessary.
When volumes picked back up again, the employees were rehired.

NEVER BULLY SUPPLIERS, YOUR PA R TNERS
Taiichi Ohno said, “Bullying suppliers is totally alien to the spirit
of the Toyota Production System.” In a major downturn, there
is a natural tendency to use suppliers as a buffer through tac-
tics like delaying payments, renegotiating contracts, or shifting
business to lower-cost sources. Principle 11 in The Toyota Way,
though, states: “Respect your extended network of partners
and suppliers by challenging them and helping them improve.”*
That principle is clear in the steps that Toyota took to deal
with suppliers during the recession, including offering them

* Jeffrey K. Liker, The Toyota Way (New York: McGraw-Hill, 2004).

58