Purchasing

Overview

The mission of purchasing is to 'create a purchasing infrastructure, respected and trusted by the public and equipped with competitive ability, through which maximum quality can be purchased at minimum cost for a timely and steady long-term supply'. To fulfill this mission, purchasing divisions coordinate their operations with suppliers and with the various internal functions, from design and production preparation (production engineering) to manufacturing, at each of the different stages-from vehicle development to production preparation, mass production, and spares supply.

In 2009, Toyota's purchasing divisions formulated the 'Toyota Way in Purchasing', which makes a clear statement of common principles and policies to be followed by staff engaged in purchasing operations at all affiliates worldwide. The basis for this was formed by the practices that have been cultivated in Toyota's relations with suppliers since its foundation.

The Purchasing Staff Handbook issued at the time of Toyota's foundation sets out an approach of always keeping the door open to better quality goods and better suppliers, an approach that has lived on through Toyota's basic principle for fair competition based on an open door policy. Toyota believes that realizing its policy of 'mutual benefit based on mutual trust' means that suppliers must run their operations reliably and requires a united approach of supporting each other through good and bad times and overcoming difficulties together.

Since activities to promote local purchasing*began in earnest with the 1984 start of operations at NUMMI, Toyota has contributed to local communities by actively encouraging purchasing from local suppliers. In this way, through its policy of 'promoting localization and contributing to local economic vitality as a good corporate citizen', Toyota has adhered consistently to the approach of 'contributing to the company and to the overall good' which is laid down in the Five Main Principles of Toyoda.

In recent years, enterprises have been called upon to show awareness of social responsibility and the environment in their activities. Toyota has responded in its purchasing activities by taking account of these fundamentals at the levels of safety, quality, production, and cost.

*
Promotion of local purchasing means switching from a system of exporting parts produced and manufactured in Japan to a system where parts are produced and manufactured locally, i.e. in the country or region of vehicle production, or are purchased from producers and manufacturers based in that country or region.
Year
Month
Toyota events
Kyoryokukai (cooperative association) events
1937
September
Post of purchaser created in Administration Division; responsible for checking the production progress of ordered parts as well as inspecting them and monitoring delivery schedules
 
1938
May
Purchasing and monitoring functions in Administration Division separated and Purchasing Division established
 
1939
June
Purchasing Division established in Tokyo Field Office
 
November
 
Toyota Subcontractors' Round Table Conference held and cooperative association established with 18 participating companies
1940
 
Purchasing staff appointed to Osaka Field Office
 
1943
December
 

Hisayoshi Akai, the first Chairman of the Kyohokai

Kyoryokukai Suppliers' Organization dissolved to form Kyohokai (renamed Tokai Kyohokai in 1947)
1946
July
 

Seishi Kato, the first chairman of the Tokyo Kyohokai

Tokyo Kyohokai established (renamed Kanto Kyohokai in 1957)
1947
January
 

Kazuma Adachi, the first chairman of the Kansai Kyohokai

Kansai Kyohokai established
January
 

Hamakichi Kojima, the first chairman of the Tokai Kyohokai

Kyohokai (established 1943) renamed Tokai Kyohokai
1958
April
Purchasing Division moved to Nagoya Office (to speed up contacts between suppliers and corporate center)
 
1960
August
Purchasing Division moved to Head Office (Toyota City) following completion of Main Building office
 
1962
March
Purchasing Division consolidated at Head Office by moving Mechanical Engineering Section and Facility Purchasing Section from Nagoya Annex
 
April
 
Seihokai established (made up of mold, jig, and gauge manufacturers)
November
 
Eihokai established (made up of facility manufacturers)
 
Cost reduction activity commenced with introduction of value analysis (VA)
 
1963
February
Divisions separated into Purchasing Division 1 and Purchasing Division 2
 
1965
October
1st Suppliers Quality Control Study Meeting held
 
1966
February
Purchasing Management Division established
 
July
 
Seihokai holds Skills and Technology Improvement Convention
1973
 
 
Toyota Related Parts Health Insurance Union established with exceptional authorization from Ministry of Welfare; 43 member companies
1974
May
 
Activities of Materials Committee commenced;
- committee to respond to oil crisis by comprehensively researching conservation of resources, energy, and materials
August
 
Toyota Clean Plaza opened
1975
August
Housing materials staff appointed to Purchasing Division 2 following expansion into housing business
 
1976
May
 
Kanto Kyohokai holds training on Toyota Production System
July
 
Tokai Kyohokai receives award from Minister of Labour
1977
February
Cost control staff in Purchasing Management Division increased to two to strengthen cost planning and control structures
 
1978
 
70% operating rate system implemented (until 1979)
 
 
Study meetings for parts-specific suppliers enhanced
 
1979
December
Overall quality inspection activities commenced
 
 
Activities started for customs bonding of import parts and tax exemption for re-export
 
 
VE/VA suggestion system introduced
 
1980
 
Response to product innovation improved (conversion to FF/new engines/EFI, etc.)
 
 
Award system for outstanding suppliers introduced
 
 
Order placement meeting established
 
1981
 
Initiatives to improve supplier technological capacities strengthened
 
 
Suggestion system for new products and technologies introduced
 
 
Disassembled parts exhibition established
 
1982
February
 
Toyota Co-operation Club (TCC) established in Thailand
 
Purchasing functions for spare parts, accessories, and special-purpose vehicles integrated (suppliers, payment conditions, pricing, systems, etc.)
 
1983
April
 
Eihokai established through integration of former suppliers' organization Eihokai (made up of facility manufacturers) and Seihokai (made up of mold, jig, and gauge manufacturers)
 
Purchasing divisions participate in activities of Committee to Enhance Interior Parts Product Strength
 
 
Purchasing divisions participate in activities of NUMMI Purchasing Subcommittee
 
1984
 
Purchasing divisions participate in activities of Maru-E Project Team
 
 
Spare parts standardization activities commenced
 
 
CCR activities commenced
 
1985
February
Organizational changes implemented including transfer of Tokyo branch Purchasing Division to head office and establishment of Logistics Department
 
 
Initiatives implemented as part of North America project activities
 
 
Activities to improve manufacturing methods for small-lot items commenced
 
1986
April
General Quality Inspections changed to Quality Assurance (QA) Inspections
 
October
Committee for urgent response measures to yen appreciation established
 
 
Energetic promotion of VE/VA and other cost reduction activities
 
 
Internal and external study groups for research and development items established
 
1987
January
 
Joint conventions for Kyohokai and Eihokai commenced
January
Operation of new materials system commenced
 
March
Operational audit to enhance purchasing planning system conducted; globalization of purchasing, etc. considered
 
July
 
Toyota Manufacturers Club (TMC) established in Indonesia
September
JAMA-MEMA Liaison Committee Meetings commenced
 
 
Secondment of employees to Kuozui Motors (Taiwan) and TMCA (Australia) commenced (thereafter, personnel dispatched to major sites)
 
1988
February
Parts Section 3 becomes Overseas Purchasing Department
 
 
Camry parts imported from TMMK
 
1989
August
International Purchasing Division established
Bluegrass Automotive Manufacturers Association (BAMA) established in the U.S.
September
 
K.C.C. Kuozui Co-operation established in Taiwan
October
International coordination program
 
October
Domestic and North American guarantee period extended
 
1990
October
1st North American Import Suppliers' Meeting held (2nd Meeting held in November 1991)
 
 
Creation of logistics systems reaching to Toyota Motor Hokkaido, Inc. and Toyota Motor Kyushu, Inc. completed
 
1991
January
Purchasing policy addresses the issue of six million vehicle production capacity
 
June
Activities to standardize parts categories implemented
 
December
New international coordination program implemented
 
1992
September
Special VA activities commenced
 
June
First Maru I commenced (until September 1992)
 
 
U.S Voluntary Program implemented.
 
1993
February
Urgent VA activities conducted
 
June
Second Maru I commenced (until October 1993)
 
July
First Parts Ordering Mini Conference commenced (until September 1994)
 
September
Improvement Promotion Department established
 
1994
April
 
Toyota Supplier Networks (TSN) established in Australia
September
Suppliers Ordering Mini Conference commenced (until May 1995)
 
 
Groundbreaking cost reduction activities commenced
 
1995
January
China Group established in International Purchasing Division
 
January
Activities commenced for recovery of suppliers following the Great Hanshin-Awaji Earthquake
 
April
Changes made to parts of procedures for setting of quality targets
 
May
Second Parts Ordering Mini Conference commenced
 
 
JAMA-CLEPA Business Conference commenced
 
1996
January
VE activities started to improve product strength
 
June
Suppliers briefing meeting on NBC activities held
 
August
Trial of Global Body Line (GBL) commenced at TMV (Vietnam)
 
 
Acceptance of Intra Company Transferees (ICT) commenced
 
1997
February
 
Toyota In Europe Association Of Manufacturers (TEAM) established in Europe
June
International Purchasing Division abolished
 
August
 
Toyota Suppliers' Club established in Malaysia
 
Overseas affiliates participate in TMC buyer training
 
 
Business dealings commenced with Panasonic EV Energy Co., Ltd. (now Primearth EV Energy Co., Ltd.) and Tamagawa Seiki Co., Ltd. as suppliers of parts for hybrid vehicles
 
1998
January
Production Preparation Support Department established
 
April
Suppliers Center established
 
September
Excellent Quality (EQ) Committee talks held
 
November
Suppliers briefing meeting on fixed cost reduction activities conducted
 
1999
February
Toyota Suppliers Convention held; overseas suppliers invited
 
March
Environmental Purchasing Guidelines presented to suppliers
 
April
 

Yasuhiko Yazaki, first Chairman of the new Kyohokai

New Kyohokai established integrating three regional organizations (Kanto, Tokai and Kansai)
July
Japan Management Standard (JMS) issued
 
2000
February
Global Contribution Awards instituted as supplier awards presented at Toyota Suppliers Convention

June
 
Toyota Suppliers Club (TSC) established in Philippines
July
'Construction of Cost Competitiveness for the 21st Century' (CCC21) activities commenced

October
Urgent quality response briefing meeting held for suppliers
 
October
Global Purchasing System introduced at TMMNA (U.S.)
 
November
Quality Exhibition held
 
 
Activities aimed at shortening development lead?times (AD21) commenced
 
2001
January
'IMV community' established in Thailand
 
January
Organizational changes implemented (3 divisions and 12 departments changed to 2 divisions and 9 departments);
Purchasing Division 1 and Purchasing Division 2 integrated as Purchasing Division; Purchasing Planning Division renamed Global Purchasing Planning Division
 
February
IMV suppliers convention held
Toyota Kirloskar Suppliers Association (TKSA) established in India
February
Chairman of Overseas Supplier Cooperative Association invited to Toyota Suppliers Convention

December
Suppliers meeting held on fixed cost reduction activities
 
December
Suppliers briefing meeting held on Toyota in-house production fixed cost reform initiatives
 
2002
February
Toyota Global Suppliers Convention (former Toyota Suppliers Convention) held;
thereafter, Convention held yearly
 
 
Overseas Trainees Culture Language Business (OT-CLUB), a program for young trainees to study at overseas affiliates, commenced
 
2003
June
Quality ambassador activities begun
 
September
Orders Conference renamed Global Orders Conference
 
 
Special Prize for Reduction of Parts Category launched as part of Supplier Awards System
 
2004
February
Purchasing policy for outstanding process creation explained at Toyota Global Suppliers Convention
 
February
Digital Engineering (DE) Liaison Meeting held
 
April
Hybrid Group established
 
 
Special Prize for Overseas Region Contribution instituted as part of supplier award
 
2005
January
Organizational changes implemented (2 divisions and 9 departments changed to 3 divisions and 8 departments):
Global Purchasing Planning Division, Purchasing Division 1, and Purchasing Division 2
 
February
Request for domestic production expansion presented at Toyota Global Suppliers Convention
 
April
Customer First (CF) Activity Promotion Committee formed
 
May
Value Innovation (VI) activities commenced
 
August
Suppliers CF briefing meeting held
 
October
Briefing meeting held on revision of basic agreements for parts purchase
Toyota South Africa Supplier Association (TSASA) established in South Africa
 
Initiatives for outstanding process creation commenced in coordination with suppliers
 
2006
February

Brazilian Automotive Suppliers Association (TDB) established in Brazil
March
Environmental Purchasing Guidelines revised
 
April
 
Asociacion Proveedores Toyota Argentina (APTA) established in Argentina
May
 
Local study tours commenced by the Kyohokai and Eihokai
June
Hands-on safety experience facilities toured and tested
 
June
Suppliers briefing meeting on concerted CF activities held
 
October
Briefing meeting held on suppliers CF activity development
 
2007
May
Seminar on jikotei kanketsu (building in quality in each process) held

June
CSR related study sessions commenced
 
October
Information session on 'Automobile Industry Fair Transaction Guidelines' held
 
November
Collection of effective earthquake countermeasures compiled
 
December
Presentation on examples of jikotei kanketsu held
 
2008
January
Organizational changes implemented (3 divisions changed to 4 divisions and 1 department):
Purchasing Planning Department, Global Purchasing Promotion Division, Body Parts Purchasing Division, Unit Parts Purchasing Division, and Materials and Facilities Purchasing Division

April

Kyohokai study group on jikotei kanketsu for employees held
May
Urgent value analysis (VA) activities commenced;
briefings held on May 21 and 22 for Kyohokai member companies

August
Cost reduction reforms for compact cars (A-EQ activities) commenced (until November 2009)

2009
February
CSR Guidelines for Toyota Suppliers adopted

March
CSR study session series for suppliers started

May
Toyota Way in Purchasing developed

December
RR-CI activities commenced as cost innovation measures aimed at producing good products at affordable prices

2010
January
Organizational changes implemented (4 divisions and 1 department): Purchasing Administration Department, Body Parts Purchasing Division, Unit Parts Purchasing Division, and Materials and Facilities Purchasing Division

2011
January
Organizational changes implemented (4 divisions and 1 department):
Purchasing Planing Department, Purchasing Project management Division, Body Parts Purchasing Division, Unit Parts Purchasing Division, and Materials and Facilities Purchasing Division

March
Great East Japan Earthquake task force established

Back to Top