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Toyota European Sustainability Report 2010 I Social Performance 76 Protecting the Supply Chain A European cross-functional taskforce, led by the Purchasing Risk Management team, ensures the continuation of business and production within the supply chain. Its effectiveness relies on the Toyota Way principles of transparency, clarity, honesty, mutual trust and speed of Predict Data gathering through multi-stakeholder network Risk Assessment PROACTIVE PLANNING Monitor Risk monitoring (tracking) Develop Contingency plan Competitiveness and Sustainability We aim to develop long-term partnerships with our suppliers to ensure mutual growth for ultimate customer benefit. The market context today sets a challenging framework for development and growth. We are therefore focusing on sharing our core in-house knowledge and experience by assigning Toyota Production System specialists to our Quality in our Supply Chain In partnership with our collective supply base, we continuously look to improve the quality of our suppliers’ products and processes. This principle is applied to both the development of new vehicles and to existing production and has led to significant quality improvements in the order of 90% since FY06. We introduced a number of activities to support our suppliers. These include: Quality information system : Just-in-time quality performance information with multiple dimension data ensures maximum visibility for enhanced quality improvement activities. Remedial quality communication : Building on the successes made in FY08, our top management work with information sharing when managing relationships with all suppliers and other stakeholders in the business. The following diagram outlines our process to protect the business from any type of risk in the supply chain (financial, social or natural disasters). Cure (if risk occurs) Deploy Contingency plan Solve the problem Manage back to normal suppliers’ production teams. Their mission is two-fold: to conduct a thorough production process assessment and to apply the Toyota Production System and tools, with the aim of constantly improving supplier competitiveness. In FY10 we will continue to work with our suppliers to share our knowledge and further strengthen our supply base. their counterparts in our supply chain on quality issues. Built-in quality at suppliers: Transferring our manufacturing knowledge and experience to achieve zero defects in the manufacturing processes of our suppliers. In addition, we improved our processes by examining quality considerations at the design stage. Engineers from Toyota and our suppliers work together to study and identify opportunities to eliminate risks in the development and design phase and allocate resources appropriately to ensure the highest-quality output. Despite our core principles of quality and continuous improvement, recent warranty incidents have demonstrated an opportunity to identify further areas for improvement in the production preparation stages of new vehicles and existing production to ensure ultimate customer safety and satisfaction.
Expanding TEAM in Europe The Toyota in Europe Association of Manufacturers (TEAM) is an association of strategic European Toyota business partners who come together to improve their individual and collective performance through networking, mutual assistance and through the sharing of ideas and techniques. We bring the suppliers together, who meet regularly to exchange best practice ideas from the shop floor. In the reporting period, we also made our internal training facility available to TEAM members and shared the latest techniques used in our assembly plants. In FY09, the quality performance of TEAM members showed a near 90% improvement compared to FY06. We plan to expand TEAM membership over the next three years to more accurately reflect the geographic distribution of our supply base. This will double the membership numbers and these suppliers will represent 75% of our annual purchasing spend. Sustainable Purchasing Practices across the Supply Chain Annual Business Meeting 2010 Around 350 suppliers and senior management from Toyota Motor Europe attended the Annual Business Meeting in March 2010 at the Toyota Technical Centre in Zaventem, Belgium. The annual meeting enables suppliers and Toyota representatives to meet each other face to face and exchange ideas regarding business targets and achievements. Highly sought after awards are presented to suppliers who In 2002, we issued our first Environmental Purchasing Guidelines. Addressing the increased expectations towards sustainable development, we revised the guidelines in 2007 to become the Green Purchasing Guidelines, which included ‘Contribution towards Sustainable Development’, focusing on good corporate citizenship. In the 2010 edition, named Sustainability Purchasing Guidelines, the Corporate Social Responsibility (CSR) Policy and Guidelines were added, along with a separate chapter on chemical substance management, REACH, substances of concern and recycling. The new guidelines include : Human rights : No child labour or forced labour to be used Labour : The right of employees to freely associate, or not to associate Legal compliance : Comply with applicable laws and regulations of each country and region as well as the spirit thereof Disclosure of information to stakeholders : Strive to disclose to stakeholders such information as is pertinent to them. Our culture of Genchi Genbutsu (‘going to the source to find the facts’) means that we regularly visit the workplace of our suppliers. This gives us the opportunity to witness first hand, the implementation of our SPG guidelines in the supply chain. have demonstrated outstanding achievements, with 29 awards being handed out in 2010. The focus of the meeting was on Toyota’s commitment to sustainable growth based on the Toyota Way and the Purchasing Policy. The meeting concluded with the agreement that in times where new challenges are constantly emerging, we need to remain focused on maintaining and continuously improving our supplier relationships towards recovery. Toyota European Sustainability Report 2010 I Social Performance 77
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