TRAVERSE CITY, MI – Saying it empathizes with the supercharged pressures U.S. suppliers currently are enduring,Motor Engineering and Mfg. North America Inc. plans to help do something about it.
Sigmund Huber, assistant general manager-purchasing/supplier relations for TEMA, says here at the Center for Automotive Research’s Management Briefing Seminars the auto maker has adopted a new process to reduce the “burden” OEMs often inadvertently place on their suppliers.
Huber says suppliers are dealing with increasing global competition, ever-shorter lead times and current high material costs.
In addition, OEMs often unwittingly place “unnecessary” burdens on their suppliers, he says. It is these pressures that TEMA, with a new component to its supplier-interaction process, hopes to stamp out.
’s “Voice of the Supplier” process was instituted to allow the auto maker’s suppliers to anonymously submit a complaint or issue. From there, Huber says, Toyota presents the matter to the Bluegrass Automotive Manufacturers Assn., its North American suppliers group.
A BAMA subcommittee reviews the problem and generates a survey regarding the matter that is distributed to each supplier in the BAMA network.
Once the survey results are assimilated, Toyota assigns a department head to institute a solution. Finally, the BAMA suppliers grade Toyota on how well the issue was resolved.
For example, Toyota adopted an Internet-based request for estimates process, by which suppliers would submit detailed cost quotes for a component. However, the system did not have the capability to upload figures from Microsoft Excel spreadsheets – a format used almost universally by suppliers submitting bids.
The Toyota system, designed to save time, actually was forcing suppliers to spend inordinate amounts of time transposing figures from their Excel spreadsheets to the Toyota RFQ system. The new Toyota Voice of the Supplier process identified the situation and resolved it.
Huber says the anonymous aspect of problem submission is key. “The only way (to solve problems) is to listen to your supplier,” he says. But “sometimes suppliers are hesitant” to voice concerns to their OEM client.
Huber says the issue of supplier relations was “rediscovered” at Toyota about a year-and-a-half ago, when TEMA created a supplier-relations department within its purchasing department.
The auto maker realized it had employee relations, community relations, public relations, even investor relations, but no supplier-relations function. This despite the fact that many surveys, including Ward's most recent survey of suppliers, indicate Toyota is a coveted customer.
Huber says supplier content on today’s average vehicle accounts for about 70% of the vehicle’s content, so it is critical to foster good relations with suppliers despite the fact the idea seems self-evident.
Only by helping its suppliers with processes such as the Voice of the Supplier, can Toyota improve, he says, noting, “Suppliers’ performance equals Toyota’s performance.”