Toyota Takes Procurement Into the Future

Japanese car brand Toyota has always ridden in the vanguard of innovative thinking when it comes to the way it operates.

It was Toyota which first introduced and proliferated the concept of lean manufacturing – a concept which has been adopted by hundreds of brands in many different industries since. It also produced the first hybrid car with the Prius and paved the way for the electric vehicle revolution. It should come as no surprise therefore to find the automotive titan turning its innovative eye towards its procurement sector.

After a 9.0 magnitude earthquake hit Japan back in 2011, Toyota had issues sourcing parts which led to a 30% drop in production and knew it had to create a more agile and resilient supply chain in order to survive. To this end, it has created two new sourcing philosophies – Jidoka and JIT.

Jidoka translates roughly to “automation with a human touch” and relies on machinery which is able to detect if defects are present and cease production immediately. Waste can therefore be kept to an absolute minimum and the root cause of the defect can be established and dealt with.

JIT (Just In Time production) makes sure that only the parts which are required are manufactured and supplied. This eliminates waste, enhances productivity, and reduces the response times experienced by both suppliers and customers – benefitting every link in the Toyota supply chain.