CASE: building deep supplier relationships

compare how American car manufacturers and Japanese car manufacturers used to read their suppliers

Japanese make more of a connection and try to understand how their suppliers operate.

what is Kieretsu?

means close-knit networks of vendors that continuously improve or prosper alone with their parent company

what did the American companies do to copy the Japanese partnering model?

tried to build relationships with suppliers but was unsuccessful, as well as slashing the number of suppliers they did business with, awarded survivors with long-term contracts, and encouraged top-tier vendors to manage lower tiers.

which two factors drove American car companies to once again choose cost a the top criteria in choosing suppliers?

1) companies were more easily able to source globally, notably from china which was cheaper.
2) the development and spread of internet-based technology which allowed suppliers to compare costs more efficiently and brutally than they used to.

what are 6 elements of the supplier partnering hierarchy?

1) they understand how their suppliers work
2) they turn supplier rivalry into an opportunity
3) they supervise their vendors
4) they develop their supplier's technical capabilities
5) they share information intensively but selectively
6) they conduct joint improvement activities

In terms of Toyota what does the term Genchi Genbutsu mean?

the actual location and actual parts or materials, to describe the practice of sending executives to see and understand for themselves how suppliers work

how did the relationship between Honda and Atlantic tool & die develop?

Honda wanted Atlantic to be a source for stamping and welding jobs, it sent one of its engineers to spend a year with it sent one of its engineers to spend a year with the company. for 12 months managers studied the way the organization worked, collected data and facts and formally stated his findings w/ his counterparts. overtime they agreed on w/ Hondas engineer's conclusion and implemented many of his suggestions, let to improvement. after 6 months the top manager shared him the company's books and he left knowing almost everything about the company.

how did Johnson controls benefit from its relationship with Toyota?

the experience helped them understand that it was not enough to deliver seats on time, it had to use a system that would continually reduce its costs and improve quality.

what's the difference between how American car companies share data VS Japanese?

Japanese companies feel that sharing a lot of information with everyone will ensure no one will have the right information when its needed. Americans think if we inundate vendors w/ information and keep talking to them intently they will feel like partners.

what is the name of the program that Toyota teachers to its suppliers?

Kaizen= continuous improvement or BAMA