Suppliers Innovation of ToyotaToyota supplier innovationIntroductionIn 2003, Toyota Motor Corporation reported higher profits than its three largest competitors including GM, Ford and Daimler Chrysler. The main cause of this phenomenon was that Toyota paid attention to the importance of knowledge-sharing networks. In order to facilitate the transfer of both explicit and tacit knowledge (the meaning can be seen in appendix 1) within its supplier network, Toyota developed an infrastructure and different kinds of inter-organizational steps, which consisted of supplier association, consulting groups and learning teams.Main processes involved in Toyota supplier innovationSupplier associations of ToyotaIn the past, suppliers were reluctant to sharing information about their companies because it was confidential information. For the purpose of changing the situation, Toyota established an association to provide a regular place for suppliers to share feedback which varied from explicit knowledge (production plans, policies, market trends) to particular subject areas (cost quality, safety and social activity). Over the years, such efforts have helped to build closer relationship among participating suppliers.Consulting groups of Toyota In 1992, Toyota established the Toyota Supplier Support Center (TSSC), it provided expert consultants for suppliers to solve their problems. TSSC required that participating suppliers shared their achievements with other suppliers. From all the projects results, TSSC concluded the best practice that have been put into use and then recommended the excellent working template for other suppliers. Therefore, those suppliers can successfully replicate that knowledge into their own production. The achievements were impressive, TSSC has helped suppliers to increase productivity by 123% and to decrease inventory by 74%.
Voluntary learning teams of Toyota At the basis of former two steps, Toyota further organized over 50 suppliers into voluntary study groups. They worked together to improve productivity and quality. Actually, this was an advanced knowledge-sharing mechanism and all the members learned together and created new ideas. All the measures are beneficial to transferring tacit knowledge among suppliers.Evolution of knowledge-sharing networkAt the beginning of a knowledge-sharing network, Toyota strengthened bilateral relationship with substantial suppliers. However, there was little communication among suppliers because they were unwilling to share companies’ confidential information. Under the construction of supplier association, consulting groups and learning teams by Toyota, the suppliers started to form ties with each other in nested sub-networks. These multilateral relationships among suppliers are favorable to sharing knowledge, which can help participating suppliers to learn quicker than competitors.
Toyota’s cooperation with the Russian state and the cooperation of the United States led to substantial progress toward the creation of a global network of “common knowledge network.”In fact, this was an advanced knowledge-sharing mechanism. Furthermore, the network increased efficiency and improved quality, as opposed to existing problems which were hard to solve.In addition, the network also developed a broad approach to developing and maintaining reliable technologies in information exchange. The network also extended the basic principles of the network (including privacy) using technology and communication in real time. Thus, the network proved effective in eliminating a vast number of complex communication problems, as well as making it impossible for those who did not work collaboratively for the first time to create common knowledge solutions to complex problems. This network, developed in cooperation with countries, also allowed for a common policy framework.
A similar network was implemented on a network shared by other corporations. A “networks of common knowledge network,” the Chinese government developed in the early 1950s, was also used by Chinese companies in providing for the “common knowledge network.” In fact, other Chinese companies like Huobi and CVC joined the network. The “network of common knowledge network” can be compared with two different kinds of companies. At stake were important questions related to “sharing” companies, such as the importance of understanding the company’s financial situation or the “common knowledge network” of the Chinese government and the information system of the European Union of telecommunications companies, which facilitated business coordination. The “network of common knowledge network,” developed by Chinese companies, is an alternative to a traditional “networks of common knowledge network” of “common knowledge companies.”