Dita

Case study: Toyota-Denso

Introduction

In today’s competitive environment, a company’s performance does not depend upon its capabilities alone. In the past decades, what had increased was: outsourcing, supply base reduction and consolidation. This has increased the reliance of buyers on their suppliers and has become the popular manufacturing strategy for companies. It is because of the increased dependence, that how main suppliers perform once in terms of quality, delivery, costs and services, affects the buying company’s performance. As the fourth-largest automaker in the world, “Toyota is committed to continuous improvement, looking forward to new tomorrows. Built-in car navigation system is getting more popular all around the world since it can provide a more convenient and safer environment for drivers. The aggregation of mapping data, for the navigation systems from Denso, is now available in almost every Toyota model in the UK.” (www.toyota.co.uk) Toyota’s navigation system supplier: “Denso, a $16.2 billion Japanese corporation, is the fourth largest independent automotive component supplier in the world. Denso’s vehicle navigation systems perform complex spatial data processing and were used by car manufacturers such as Toyota, Jaguar and Cadillac.” (www.denso.co.uk) Moreover, Toyota is not the only buyer of Denso; but Denso is the only navigation supplier to Toyota.

Poor quality components, for instance, can delay delivery of the finished product. As a result, costs will be increased by quality failures. Supplying the right quality of products and services will have a significant effect on whether the operation itself can provide a quality advantage. Also, quality will affect the delivery speed and reliability. (Slack, 1995) Not only Toyota but also Denso will raise their costs if the Denso’s products quality is not reliable. In order to ensure the quality, Denso is encouraged to ensure that they take the responsibility themselves to provide a...