Toyota cozies up with suppliers

ANN ARBOR, Mich. — As part of consolidating its U.S. operations, Toyota is launching an entirely new approach to product development by bringing suppliers into planning as much as two years earlier.

Toyota expects the closer working relations to cut project costs and cycle times while improving vehicle quality.

The difference, in a nutshell, can be seen in the development here of the next-generation Avalon sedan, which launches next year.

On previous North American development projects, Toyota engineers might interact with a supplier monthly — often by phone. On the Avalon project, suppliers work inside Toyota’s expanded North American research and development center, its largest outside of Japan.

“Now that we’re here, they’re talking daily,” said Robert Young, Toyota Motor North America group vice president for purchasing, supplier engineering development and cost planning, during a tour of the expanded center.

“Now we give them a desk and they are part of the team,” he said. “Everybody’s getting real-time feedback. This allows us to plan out more deeply in advance so we can overcome barriers.

“The whole idea is true cost reduction.”

This is the new direction at Toyota, set forth by Toyota Motor Corp. CEO Akio Toyoda. The company wants to develop vehicles faster at less expense, with more flexibility, simplified manufacturing, more flexible factories and clearer communication between consumers and Toyota, and between Toyota and its suppliers.

A key piece of all that is involving parts companies earlier in the creation of new vehicles.

“It’s a very big change to enable quicker action,” said Shinichi Yasui, president of Toyota Motor Engineering & Manufacturing for North America and the company’s regional r&d chief.

The streamlining was introduced in Japan with the arrival of Toyota Motor Corp.’s new modular platform, known internally as Toyota New Global Architecture, or TNGA.

For a glimpse of its early results, look at the redesigned 2018 Camry. Development was led out of Japan, where the advanced coordination with suppliers has already taken root.

Relying on advanced involvement with suppliers, Toyota designed a new Camry shift lever with 30 percent fewer components. The resulting manufacturing process for it requires just one worker, compared with four on the previous-generation lever. The new lever takes up 60 percent less manufacturing floor space and needs 40 percent less time to build. The redesigned component also required 25 percent less investment, according to Toyota.

“The point of this is to change the way we work,” said Kristen Tabar, vice president of the technical strategy planning office at the Toyota Technical Center.


To make room for suppliers in North America, Toyota needed a bigger house, according to Yasui.

The Ann Arbor, Mich., center received a new wing to improve coordination with suppliers, as well as a new mini manufacturing center that allows Toyota to bang out prototypes.

The expansion will continue this fall with the build-out of a powertrain engineering unit.

The new Ann Arbor Supplier Center houses Toyota purchasing teams that relocated to Michigan from Erlanger, Ky. The group’s head count climbed to 400 from around 340, while the size of the supplier collaboration space more than quadrupled.

The $154 million investment is part of the One Toyota restructuring centered around this year’s migration to the company’s new regional headquarters in Plano, Texas.

Toyota previously brought its suppliers into a project during the prototype stage. The new approach gives suppliers a seat at the table during the advanced development phase of product development.

Advanced development is the first of four stages for a project. The next are prototype concept development, tooling and milestone checks and, finally, building the production vehicle.

Suppliers now start coordinating with Toyota one to two years earlier, Young said, with about 80 suppliers now participating.

The shift speeds up development time, helps shave costs and improves quality by spotting potential problems before they become embedded in a vehicle’s design and harder to fix.

Coming to America

The Ann Arbor expansion also includes a new Prototype Development Center, a miniature assembly plant that can churn out six vehicles a day. Toyota’s previous setup — two smaller prototype workshops in suburban Detroit — could manufacture only four. The new facility also has a rapid prototype with a bank of 3D printers that can crank out components for instant verification.

Examples of joint breakthroughs are sometimes mundane, but every bit helps. In one case, early coordination led to repositioning labels to a flat surface on a component, instead of on a curved surface, making them easier to affix.

The upgrade also includes a cavernous collaborative benchmark center, an airy warehouse where suppliers and Toyota engineers can tear down rival vehicles together. Before opening the facility this year, Toyota rarely invited suppliers for such joint teardowns, Young said.

The process will spread to other U.S. development projects. The practice will cover work on a new TNGA platform for trucks. Dubbed the F platform, it underpins such nameplates as the Tacoma and Tundra pickups, as well as the Sequoia, 4Runner and Land Cruiser SUVs.