Toyota exec touts supply chain benefits of staff moves to Mich.

Simon Nagata: "We don't know yet how many people could come." Photo credit: Greg Horvath

TRAVERSE CITY, Mich. -- Toyota’s plan to move supplier development and purchasing staffs to its technical center in Ann Arbor, Mich., will improve suppliers relations, a top executive said today.

Simon Nagata, CEO of Toyota Engineering and Manufacturing, North America, said the automaker:

• Must do a better job earning suppliers’ trust so that they will share with Toyota their latest innovations.

• Issues too many design changes late in the procurement process.

• Needs to demonstrate a more open-minded attitude towards new ideas presented by suppliers.

“When we combine resources in Michigan, I hope we can do this,” Nagata said at the 2014 Management Briefing Seminars

The move to Ann Arbor is part of Toyota’s reorganization that includes the upcoming shift of North American headquarters from Torrance, Calif., to Plano, Texas.

Nagata said Toyota plans to add 250 supplier purchasing jobs from its Elanger, Ky., office to its technical center. Many of the jobs will be filled by Toyota employees who relocate from Kentucky.

“We don't know yet how many people could come. If we lose some people, we will need to hire new people,” he said.

Better supplier relations, Nagata said, are key to helping Toyota develop vehicles that are safer and more fuel efficient.

“Innovation requires good business relations based on trust,” he said. “We must use fair business practices. If an OEM is open-minded and has the trust of suppliers, it will benefit by getting the best new ideas from supplier partners.”

Nagata said the fast pace of technology changes is bringing some new suppliers to Toyota. But he said some are not working with Toyota because they perceive the company to be too difficult to deal with, requiring too much time to evaluate and accept new ideas.



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