Good Vendor Relations Keep the Wheels Turning
Toyota has recently moved up in position to become the second largest automaker in the United States. Much of that success, according to the company, comes down to the relationships it has developed with its vendors.
Seventy percent of Toyota’s car parts are made by outside vendors and the company prides itself on friendly and cooperative relations with suppliers.
Taiichi Ohno, the production chief at Toyota, told the Milwaukee Journal Sentinel, “Achievement of business performance by the parent company through bullying suppliers is totally alien to the spirit of the Toyota production system.”
Jeffrey Liker, author of The Toyota Way, said the automaker is very demanding of its suppliers, pushing them to continually seek improvements in manufacturing and to create supply chain efficiencies.
While it may be demanding, said Mr. Liker, it is also very supportive. He likened the relationship of Toyota and its vendors to that of an extended family.
The Journal Sentinel article says The Toyota Way stands in sharp contrast to the American Way. Most American companies it contends use “the big club to force price reductions, quality improvements or just-in-time deliveries. Threats of moving the business and intimidation are the major tools.”
Discussion Question: How would you describe the current state of relations between retailers in the U.S. and the vendors (manufacturers, wholesalers,
sales agents) that supply them with goods and services?
- Toyota’s relationship with vendors is an important link in its success – Milwaukee Journal
Sentinel (free reg. required)