AN CONGRESS: Toyota Europe focuses on small supply chain to drive efficiency
Toyota says it is concentrating on a relatively small base of suppliers to control costs in Europe rather than widening its relationships with many component makers.
And speaking at Automotive News Europe's Congress in Cologne, Toyota president purchasing Europe Mark Adams said the majority of its suppliers who were there in the 1990s were still in place today.
"That is testament to the way we have organised our supply chain," he said, adding: "[Some] 70% of our manufacturing cost is outsourced and 90% of that spend is in Europe.
"The clamour seems to be developing new relationships with new supplier partners, but my major concern is improving the quality with known suppliers of existing components. Cars will still require seats, carpets [and] steering systems - all our car plants need to maintain the local competitive supply base."
Toyota has established its 'Team' association of suppliers to drive quality improvement with monthly shop floor input, while it has challenged members to work together.
"We are succeeding where shop floor quality and safety underpins financial success," said Adams. "I feel our suppliers support us because they want to not because they have to. Lean development of suppliers equates to supplier self-reliance."
Noting "mother industry rudely awakened us" in the events of this year's Japanese earthquake, Adams said collaboration with suppliers was key to improving efficiency.
"Today we are facing a combination of previously unprecedented factors," he said. "We are all impacted in a technological race to low carbon solutions.
"At the same there [is] rising wage inflation [and] increasing logistics costs just at the same time when we need to lower our costs. The need to find real factory improvements...this is my fundamental belief."