Toyota Purchasing Strategy

The traditionally conservative carmaker has found global expansion a real challenge

Toyota’s purchasing strategy has been traditionally conservative, having relied for years on the partnership model with a close-knitted Japanese supplier network backing the carmaker’s growth inside and outside Japan as well as its technology and quality demands. As its scope became more global, with operations in North America and Europe, the carmaker started enriching its supplier panels with leading suppliers from these regions such as Johnson Controls, Autoliv and Continental. This process did not start overnight and certainly did not revolutionise the way Toyota chose and awarded business to suppliers. Toyota’s approach towards the supply base spread among suppliers trying to get business from the carmaker, even though there were few real opportunities to do so due to a quite strict supplier selection process Toyota maintained and in some cases by the scarce number of programs available (e.g. in Europe).