Toyota Simplifies Supplier Communications

As Toyota Motor Manufacturing North America moves forward with plans to increase manufacturing capacity in the United States, it's counting on its supplier portal to gain more detailed information on parts status, tracking, and quality so that it can more efficiently manage production requirements. A survey in the field now with suppliers is helping the division's North American IT team determine the best Java-based tools to add to the portal to help achieve its goals.

With three major model changes set for 2006--the same year its San Antonio, Texas, plant goes online and production increases to 1.66 million vehicles, up from 1.48 million this year--the company needs to simplify supplier communications. "Imagine trying to manage several vehicles launches at once, sourcing components from many suppliers and locations," says Todd Bridwell, general manager of information services at Toyota Motor Manufacturing North America.

The existing portal, based on IBM's WebSphere Portal Server, supports nearly 20 tools, from purchasing to finance applications. The most recent tool, which Toyota began implementing earlier this year, is an automated "kanban" lean manufacturing system that sends suppliers a signal to replenish inventory. The automated system replaces the traditional paper-based kanban process to create a production environment driven by demand that holds only a small amount of inventory and products at any given time. Less than 1-1/2 shifts worth of inventory exist at any one of Toyota North America's manufacturing sites. "We're tightly integrated with our suppliers on production," Bridwell says, describing how seats from Johnson Controls Inc. are popped into Avalon, Camry, and Solara cars the minute they arrive at Toyota's Georgetown, Ky., manufacturing plant.

The Supplier Key Performance Indicator on Toyota's supplier portal, which was launched last year to alert suppliers of missed shipments or quality issues in their products, likely will be reengineered to step up the frequency of such alerts to suppliers. "The quality process has gaps because it takes too long to report back to suppliers the issues caused by latency," says Kevin Mixer, automotive research director at AMR Research. Toyota already is a leader in collaborative processes with suppliers, he says, but "real-time feedback is the next level of lean quality manufacturing techniques, which eliminates waste. In this case, waste is time."

Other types of tools that may be added to improve business processes during preproduction, based on the survey, may range from systems to make sure suppliers have the materials to support the manufacturing for a specific vehicle design, to verifying that the processes suppliers use to build parts are top notch.