There is a real good reason for Toyota establishing long-term, strategic relationships with key suppliers; often owning a big part of them and inserting Toyota managers on the boards of their partnered suppliers. It’s the same reason why Henry Ford vertically integrated to extreme levels, owning his own ore boats and building a steel mill at the front end of the big River Rouge plant; and owning rubber plantations in South America. The reason is their keen understanding of the need to optimize the core value streams through their businesses.
Not long ago I was asked to meet with the folks from a big brand company – I won’t mention the name to preserve the confidentiality of the relationship but it is a 100+ year old company that everyone knows and just about everyone buys from (although you buy from them a little less every year, hence their bringing me in).
There is a typical lean fairies and unicorns article in The Economist, titled “Decluttering the company”. It extolls the value of simplification, eliminating meetings, reducing emails – you know – all the usual stuff. Everyone agrees with it; you won’t find a single person out there who thinks that lots of meetings and email is a good thing.
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