ANN ARBOR, MI – Toyota Motor Corp. prides itself on the steady relationships it cultivates with suppliers to minimize disruptions while a vehicle is in production.

But when a vehicle program draws to a close and its replacement nears launch, some of those steady relationships can change dramatically as the Japanese auto maker remains wedded to the notion of kaizen, or continuous improvement.

The all-new ’04 Sienna minivan is a prime example. The vehicle may not be dazzling stylistically, but behind the scenes Toyota and its suppliers were coping with a raft of significant changes from the previous-generation Sienna.

First, Toyota would move minivan assembly from Georgetown, KY, to the Princeton, IN, plant constructed for the 1999 launch of the first-generation Tundra pickup.

Most Sienna suppliers, however, were clustered in the Georgetown area. Those suppliers that did not set up new facilities near Princeton would have to ship their components from Georgetown – a trip that takes more than three hours and might make logistics planners a tad nervous.

And although many suppliers carried over from the previous-generation Sienna, some were new. For instance, Johnson Controls Inc. produced seats for the previous Sienna and shipped them just-in-time and in-sequence from a dedicated plant in Georgetown.

The new contract, however, went to Total Systems Interiors America, a joint venture established in November 2000 between Lear Corp. and Japan's Takashimaya Nippatsu Kogyo Co. Ltd.

The $10 million TISA plant, completed in December 2001, is located in Princeton, just north of Toyota’s Sienna plant, and also manufactures the minivan’s front and rear door panels.

The seat supplier had to cope with a lot of changes on Sienna. The previous model accommodated seven passengers; some versions of the new Sienna would accommodate eight.

The third row would have to fold flat in the floor, like other new minivans. And the second-row seats would be configured in a 60-40 split, rather than the 50-50 arrangement in the past model, and would have to tumble forward to allow easier access to the third-row seats.

Toyota’s Andy Lund configures interior features in new Sienna minivan.

Despite the engineering challenges and its role as a new supplier to Sienna, Andy Lund, program manager-development and planning operations at Toyota Technical Center here, says TISA has performed admirably.

Lund says he likes the functionality of Chrysler Group’s second-row Stow ’n Go minivan seats, which fold flat in the floor, but that Toyota did not want to sacrifice all-wheel drive on the new Sienna. Chrysler dropped the AWD option because the new seating configuration interfered with the drivetrain.

The new Sienna, however, may have yielded a solution: Lund says a hybrid-electric powertrain would make possible the flat-folding second row and AWD combination.

The Lexus RX 440h, due to market later this year, will be powered by Toyota’s Hybrid Synergy Drive system and comes with an optional AWD system that features a rear-drive electric motor. The system eliminates the need for a traditional driveshaft to the rear axle.

Lund says the hybrid fold-flat/AWD configuration is a possibility for the Sienna. (See related story: Toyota Hybrid Could Solve Minivan Dilemma)

Another new supplier to Sienna is Vuteq, of Normal, IL, which assembles the minivan's instrument panel.

On the previous-generation vehicle, Toyota workers built the module on-line at the Georgetown assembly facility.

For the '04 Sienna, Toyota still produces the coverstock for the IP and ships it to Vuteq. The component producers also ship their parts to Vuteq, which acts as an "outsourced assembler" for Toyota, Lund says.

Although cost savings were a factor, Lund says Toyota made the switch on IP sourcing for ergonomic and quality-control reasons. Vuteq devised a more worker-friendly process – by placing the IP on a moving stand – than was employed by Toyota workers at Georgetown.

"When the IP is being assembled and it's on a stand right in front of the operator, the operator can make the connections more securely and we find we have better quality control, better ergonomics," Lund says.

And quality has not been compromised since Vuteq took over IP assembly. "In terms of the IP, one of the big concerns is always squeak and rattle," Lund says. "And certainly the vehicle is doing very well in that respect."

The auto maker also found a better way to handle the headliner assembly for Sienna. Toyota Georgetown employees on the old Sienna had to install several attachments – like they did with the IP – including lighting, grab handles, ventilation ducts and an overhead storage bin. The installations, done overhead, were ergonomically challenging.

For the new Sienna, Toyota outsourced the headliner to JCI, which set up a just-in-time assembly plant nearby. The new headliner is more complex, but the assembly is much simpler because JCI employees add all the attachments – in a much more worker-friendly configuration, with the headliner flipped on its back – and ship the complete module to Toyota.

"By putting this on a table, the (JCI) workers at the factory are working down, installing them. It’s ergonomically much better," Lund says.

He declines to quantify cost savings specifically associated with the outsourced headliner and IP. But he says the cost savings overall for a similar-equipped Sienna vs. the old model amount to about $1,000 on an equalized value basis.

Lund credits suppliers for their valuable contributions to limit cost. "Many little things add up, and some things are bigger than others, but we appreciate every effort that our suppliers give us to reduce cost," he says.

And although the Sienna has a few new suppliers, Toyota generally retains its valued core of parts producers. "We try to utilize the expertise that's already there and the relationship that's already built up," Lund says. "It's always hard to start a new relationship. It's better to work with an existing relationship."

Toyota recently gave its highest quality achievement award, for instance, to Eaton Corp.’s U.S. Engine Valve partnership in Westminster, SC, which has supplied 4-cyl. engine valves to the auto maker for many years. Last year, Eaton shipped 12 million engine valves to Toyota, and only five were defective.

(See related story: Toyota Advances With ‘Onsite’ Suppliers in Texas)

– with Katherine Zachary

tmurphy@primediabusiness.com