Delphi plans to convert its worldwide suppliers to manufacturing procedures modeled after Toyota.
The industry's biggest auto parts supplier, which buys about 15 billion annually in outside content, is taking the step after positive results from its efforts with Toyota's system.
Delphi hired former Honda purchasing chief Dave Nelson as vice president of global purchasing to head the effort.
The former General Motors division adopted the so-called Toyota Production System at some of its North American plants in 1996. The conversion to Toyota practices is under way at all 179 Delphi plants worldwide, said Dave Logozzo, director of manufacturing operations.
Delphi employs 1,950 people in purchasing operations in Europe, the USA, Latin America and Asia.
Toyota's widely studied lean-manufacturing system emphasizes minimal inventories, employee involvement in production improvements and the elimination of factory waste and inefficiency.
Nelson, 64, most recently headed worldwide purchasing for Deere & Co., US manufacturer of John Deere agricultural tractors. He is better known in the automotive industry as the purchasing head of Honda's North American operations during the late 1980s and the 1990s. During
his time at Honda, Nelson helped boost annual North American purchasing volume from about $600 million (650 million) to $6 billion.
He set up a Honda department that helped US suppliers learn how to incorporate Honda processes into their North American manufacturing.
Nelson said Delphi already has a supplier development group that helps vendors resolve problems. But he intends to develop a larger supplier department within Delphi's purchasing operations to specifically help other suppliers embrace lean practices.
'The objective here for the past three or four years has focused on lean manufacturing and the implementation of the Toyota Production System,' Nelson said. 'Now we want to get more of Delphi's suppliers onto that. We want to work together and take waste out of our entire supply chain.'
Delphi uses eight to 10 former Toyota managers and a few current Toyota employees as consultants to help guide Delphi's internal evolution, Logozzo said.
Nelson said the details of Delphi's plan will be in a long-range global purchasing strategy due in August.
But he said Delphi contract awards will be influenced by whether a potential supplier practices lean-manufacturing factory methods.
'We will also consider what kind of attitude the supplier might have and whether he's flexible about the Toyota Production System,' he said. 'But if all things are equal, there won't be any question [about which to pick].'