issue 1 - Roland Berger

p industry report oems will reduce in-house production from 35 percent today to 20 percent in 2015
(From left to right) Tony Brown (Ford), Wendelin Wiedeking
(Porsche), and Bill Fluharty (Johnson Controls):
“The traditional role of car manufacturers is changing.”
Toyota’s US branch chalked up higher profits
than General Motors, Ford and Daimler-
Chrysler (its three biggest competitors)
combined, despite the fact that Toyota
builds fewer cars in the US than its domestic
competitors. According to Dyer and
Hatch, the key to the company’s success has
been a consistent exchange of knowledge
between the group and its suppliers. “Toyota
provides its US partners with a tremendous
amount of expertise and technology geared
toward increasing productivity, particularly
with respect to manufacturing processes
specific to the production of its own vehicles,”
concluded the researchers.
Alliances with suppliers and learning teams
are the two pillars on which Toyota’s prominence
rests. In particular, Toyota is more
physically present than its competitors. For
example, the company sent its in-house consultants
to suppliers an average of 13 days a
year during the research period, which
spanned 1990 to 1996. In this way not only
did the various parties reduce the number
of production errors by a seventh, but
they also decreased the inventory level of
COMPARED WITH ITS COMPETITORS,
TOYOTA IS CONSIDERABLY MORE
PRESENT AT ITS SUPPLIERS’ FACILITIES
Toyota-specific parts by a third. At the same
time, supplier productivity in the manufacture
of these components increased by a
hefty 36 percent.
In comparison, General Motors, Ford and
DaimlerChrysler each invested only six
consultant-days per year and performed
worse in all key areas, even though their
parts are manufactured in the same plants
as Toyota’s. “We would not be where we
are today if we had not collaborated with
Toyota,” says George Hommel, former chairman
of Continental Metal Specialty Inc., a
supplier based in Stanton, Kentucky. He
adds, “We owe 75 to 80 percent of the insight
we gained from our customers to Toyota.”
This observation is all the more surprising
because most top managers still preach that
it takes a strong negotiating position to
achieve low unit prices. For example, Bernd
Bohr, head of motor vehicle engineering at
Robert Bosch GmbH, which, like Porsche, is
also based in Stuttgart, cannot echo Hommel’s
praise. “Although car manufacturers
worldwide are touting partner relations
with suppliers, the proposition varies widely
depending on region and brand.” Guenter
Baumann, chief operating officer of
J. Eberspaecher GmbH & Co. KG in
Esslingen, Germany, is even more critical.
He believes that because of sinking margins,
the increased load ultimately needs to be
fairly remunerated. However, auto industry
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think: act