Procurement Policy of Toyota

Toyota Industries Corporation is involved in a wide range of business fields from textile machinery to automotive related fields such as engines, car air-compressors, and vehicles, to materials handling equipment such as forklift trucks, and the electronics that go into these products, and even to foundry parts.

The company procures the necessary parts, materials, and equipment for these many different business fields from suppliers all over the world. Along with requiring their suppliers to provide quality items at a low price and in a timely manner, Toyota cooperates with them to promote environmental preservation and meet the other demands of society.

In addition Toyota takes a long term view toward their relationships with suppliers with an aim to realize an amicable relationship of mutual prosperity based on fair business practices.

Fair Competition Based on an Open Door Policy

Toyota has an open and fair entry process that allows all potential suppliers, regardless of nationality, size, and experience, the same chance to offer us their products or services. Toyota selects their business partners based on economic reasons such as the quality, price, and volume of their products, as well as on their adherence to delivery times. In addition, Toyota also considers comprehensively things like environmental awareness, company stability, and technological development ability.

Amicable Relationship of Mutual Benefit Based on Mutual Trust

At Toyota Industries Corporation employees work hard to realize an amicable relation of mutual benefit with their suppliers based on mutual trust.

Toyota also believes that it is important to promote friendly communication with their suppliers by means of their procurement activities.

Environmentally-Friendly Products Based on "Green Procurement"

In order to create environmentally-friendly products Toyota aims to procure parts, materials, and equipment that have low environmental impact from suppliers that always give sufficient consideration to the environment.

Localization of Business Based on Good Corporate Citizenship

As a company that undertakes local production overseas, Toyota promotes procurement from local suppliers in order to contribute to the local community.

Obeying the Law

It is Toyota Industries' policy to strictly abide by both the letter and spirit of laws and regulations and to also carefully handle and protect their partner's secret corporate information.

Questions:-

a. Examine procurement model of Toyota

b. Critically analyze the procurement strategies of Toyota.

c. How does technology help in strategizing the purchasing function?