Toyota's management system, more formally known as the Toyota production system (TPS) is one of the most benchmarked business improvement strategies in modern industry. While many companies try to emulate Toyota's success using a variety of different approaches, most practitioners are not aware how Toyota replicates TPS at suppliers. The purpose of this paper is to investigate the in‐house capabilities that are transferred from Toyota to suppliers as a way to more deeply understand how TPS can evolve.
This work studies Toyota's supplier development practices by evaluating organizational documents using latent semantic analysis (LSA). LSA is a theory and method for extracting and representing the contextual‐usage and meaning of words and phrases by statistical computation applied to text. LSA is based on singular value decomposition (SVD), which is a mathematical matrix decomposition technique using factor analysis.
This work shows that Toyota targets processes, rather than whole systems, in assisting suppliers to be more effective at abnormality management. Findings also show that Toyota's approval process doesn't necessarily support major kaizen at suppliers yet does encourage minor day‐to‐day kaizen. Finally, this work reports that the Toyota Way for suppliers does not have to be adopted by suppliers, but does represent “A Way” to interact with suppliers to drive both culture and productivity simultaneously.
The paper uses a new method for analyzing Toyota's supplier development practices by mathematically representing and analyzing Toyota's organizational documents. This new method allows various components and features of Toyota's supplier development process to be represented and described in a way that offers many unique insights.
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