GRP2_CASE8_TOYOTA SUPPLIER RELATIONS, FRANCISCO DYAN NICOLE.docx

Toyota Supplier Relations
Operations Management
MBA 703
FEU-Manila
Submitted by:
 Reporting Group  Reacting Group
De Guzman, Alino Elcir D.
Francisco, Dyan Nicole M.
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FAR EASTERN
MASTER OF BUSINESS

I. Case Background
Toyota faced a challenge related to the poor visibility and low quality of a supplier for
the Suprima model. The Japanese brand, being related to a top-quality product and a
Just in Time manufacturing scheme could not afford to have stock-out problems nor not
meeting consumers' demand for quality.
One of the main errors leading to this situation was the fact that ChassisCo didn't follow
the Toyota principle of giving the bad news upfront. Toyota stated with every supplier
that they expected a swift alert in case any risks were to arise, to tackle root causes, and
diminish the problems right away.
On the same line, Toyota knew that the manufacturing process for the suspension
cradles required substantial dedication in both effort and resources. Nevertheless, they
miscalculated the actual capacity of the supplier to meet Toyota's demand.
When ChassisCo first manufactured the parts for the Suprima in 1997, a great part of the
risk was decreased since Toyota made several simplifications, resulting in an overall
quality increase, hence eliminating the need for quality inspections when the parts first
arrived at ChassisCo.
This didn't happen in the latest model. Toyota actively collaborated with suppliers to
attack potential quality risks before they happen. However, for the 2003 launch,
ChassisCo didn't take the initiative of performing such a business practice.
This time, Toyota let the supplier take full accountability for the sourcing part when in
the past it had been made all through Toyota, incorporating this highly preventing
scheme. Besides, this new early was much more complex.
Furthermore, another mistake was assuming that ChassisCo had the project management
skills necessary.
Walt Bernstein, the director of production control for Toyota Motor Manufacturing's
Macon, Georgia operation, was notably frustrated with the plant manager for ChassisCo,
a Toyota supplier. There were quality and conformance issues with the rear suspension
cradle that ChassisCo was manufacturing for Toyota's new Suprima crossover.
ChassisCo had made several operational improvements since production started 14
months earlier, but problems continued to surface. Bernstein, an expert in Toyota's
production principles, needed to figure out what to do
.
2 | P a g e
FAR EASTERN
MASTER OF BUSINESS

II. Statement of the Problem