2 Rather than having vendors compete against one another, Toyota is interested in treating suppliers as partners.

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2 Rather than having vendors compete against one another, Toyota is interested in treating suppliers as partners. Is Toyota just being old-fashioned in its views? It is interesting to see how the large automobile man- ufacturers differ in their opinions about working with suppliers and standardization of parts. Consider the following. WORKING WITH SUPPLIERS Tadaaki Jagawa, a Toyota executive vice president, said the number one Japanese automaker "received an invitation" from Ford to join the Ford Internet-based marketplace, tentatively called AutoXchange, where automakers and their suppliers hope to do business more efficiently and cut costs. Ford and GM are in a race to build the largest online marketplace to achieve greater economies of scale, and both are trying to woo other automakers. The two com- panies have argued that creating a marketplace in which hundreds of billions of dollars in goods and services are traded would give their suppliers access to more business globally, allowing suppliers and manufacturers to slash costs. Toyota considers the Internet marketplace only a means to effi- ciency and not an end in itself, Jagawa said. Because the procure- ment process involves not only the price but also the quality, lead time, and delivery of components, Jagawa said Toyota doesn't want to put competitive components on an open market, such as GM TradeXchange; it would go against Toyota's philosophy of treating suppliers as partners. "We help suppliers cut costs through a guarantee of a long-term contract; putting those parts on the open market pits us against suppliers in an adversary relationship."

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Operations Management For Competitive Advantage

ISBN: 1572

11th Edition

Authors: Richard B. Chase, F. Robert Jacobs

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