Procurement System

TOYOTA Industries
[Type the author name]

Procurement system of Toyota

At Toyota Industries Corporation, procurement activities are based on fair business practices in order to realize amicable relationships and mutual benefit. 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. Company procures the parts, materials, and equipment for these many different businesses from suppliers all over the world. Along with requiring its suppliers to provide quality items at a low price and in a timely manner, it cooperates with them to promote environmental preservation and meet the other demands of society. In addition it takes a long term view toward relationships with suppliers with an aim to realize an amicable relationship of mutual benefit based on fair business practices.

Procurement Policy

Fair Competition Based on an Open Door Policy

Toyota have an open and fair entry process that allows all potential suppliers, regardless of nationality, size, and experience, the same chance to offer Toyota their products or services. Toyota selects its 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 work hard to realize an amicable relation of mutual benefit with our suppliers based on mutual trust. Toyota also believes that it is important to promote friendly communication with our suppliers by means of our 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 our partner's secret corporate information.

Outlines the Procurement process

Toyota has organized Outlines the Procurement process for suppliers in order to ensure fair procurement for both parties. If Toyota Industries Corporation decides that the products are not acceptable at some point after the quality assessment stage, we will inform the company at that time.

Flow Chart of the Purchasing ProcessProcess What Toyota Industries does Looks for and investigates What does Promotes Toyota will be product to business partner

Selling

potential business partners (Selects company that

asked to give estimate) Estimate Requests an estimate Makes and sends estimate *If (Selects company that will be to Toyota business is sending partner,

diagrams privacy contract must be signed.

asked to send sample)

If accepted

If not accepted

Sends

non-acceptance

Receives notification

non-acceptance

notification Send sample Requests sample

Sends sample

Quality assessment

Assesses quality

Surveys process

Negotiation conditions

of

Negotiates business conditions

Contract signing

Signs contract

Purchasing Items
Business Segment Main Items Purchased Automobile press parts, Supplier Selection 1.Suppliers that possess the know-how and technology to provide us with low cost molded resin parts in small quantities

resin molding parts Vehicle Division

Engine vehicles

parts (aluminium

for cast

1. Suppliers that can provide competitive, low cost, high quality industrial strictly to automobile vehicle and engine and

automobiles and industrial items, die cast items, cast and forged items, sintered Automobile Segment Engine Division items, seal parts, rubber hoses, resin metal parts, bushing, pumps, electrical equipment, pipes, combustion system devices, press items, core forming parts, etc.) Car air-conditioning

parts, and can also adhere volume delivery date requirements. 2. Suppliers that can utilize unconventional materials and methods to reduce the weight and cost of parts.

1. Suppliers that can provide pressure-resistant, airtight, aluminum die cast parts, ductile cast iron products, resin parts (insert mould parts), press parts, bolts, springs, and bearings, etc.

compressor parts Compressor Division

Functional Drive wheels, Materials Handling Equipment Segment TOYOTA Material Handling Company Electrical (batteries, electronic parts, train

parts parts etc.) components motors, etc.)

1. Suppliers that can provide low cost large resin parts from large molds (450 ton class and above). 2. Suppliers that can make low cost resin molds. 3. Suppliers that can make low cost high-pressure hoses (rubber, resin) 4. Suppliers that can cost effectively process develop for and

(transmission, brakes, tires,

Hydraulic parts (cylinders, oil pumps, oil control valves, etc.) Auxiliary (lights, harness) components switches, wire

manufacture an assembly electronic

Rubber, resin parts, highpressure hoses, etc. Process parts

components.

1. Suppliers that can do cutting and processing work for various products in small quantities. 2. Suppliers that can do steel sheet pressing and processing for various products in small quantities 3. Suppliers that can do pipe processing for various products in small quantities

Foundry parts, forging parts (weights, forks, fabrication materials, bolts, processing parts etc.) gears) Cutting parts (shafts, pins, Steel sheet press parts, pipe

Parts

for

logistics

and

1. Manufacturers that can provide motorized reduction gears 2. Manufacturers capable of completing all the processes in can manufacture and large 3. scale cutting and panel that that can can processing. Control manufacturers volume and

transportation equipment

purchase electrical parts in develop software. Cutting and processing items for textile machinery parts (lathes, milling machines), cast and forged Textile Machinery Segment Textile Machinery Division items, etc. Can manufacturing equipment 1. Suppliers that can

machine

process

various

products in small quantities at low cost and then deliver them quickly. 2. Suppliers that can machine process finished, ready-to-use, individual service parts at low cost and then deliver them quickly. 3. Suppliers that can do small lot SUS box welding

Electronic Electronics Segment Electronics Division PCBs, etc.

components,

1. Suppliers that can provide electronic components and PCBs at low cost and in small quantities, and also have experience with in-

vehicle systems. Can Mechatronics Engineering Sub-Division etc. making equipment, 1. Suppliers that can provide (high precision processed) individual parts for machine tools at a low cost and in a short delivery period (within 10 days). Machinery & Tools SubDivision Steel, recycled aluminum Others Segment bullion, new bullion, low pressure items, oil, paint, industrial chemicals, etc. Machinery, jigs, processed items, etc Head Office Cast materials (corks, Ferro silicon, silicon manganese, etc.), recycled aluminum accessories blocks, for work factories Parts for press dies 1. Suppliers that can provide small cutting parts for press dies at a low cost and in a short delivery time. 1. Suppliers that can provide steel, other non-ferrous, general and secondary

machine processed parts,

materials at a low cost and in a short delivery period. 2. Manufacturers that can provide jigs, tools, and other single items at a low cost and in a short delivery period. 3. Foreign suppliers that can steadily materials, aluminium provide blocks, cast recycled and

(work gloves, stretch film, ear plugs, etc.)

factory parts at a low price.

Policies on Environmentally Preferable Purchasing

Purchasing Policies
Along with offering customers clean and safe products that are good for the global environment, Toyota Industries is also promoting environmental conservation activities that extend throughout the companys business operations. Therefore, it is the basic policy of Toyota Industries to conduct what is termed Environmentally Preferable Purchasing and purchase from suppliers who are conscious of the global environment. Toyota requests that suppliers implement individual environmental measures based on their industrial classification. Toyota Industries gives top priority to procurement from suppliers who establish environmental management systems and conduct environmental impact reduction activities such as reduction of greenhouse gas emissions, resources recycling, reduction of environmental risks, and conservation of biodiversity, in addition to conventional quality, cost, and delivery (QCD).

References1. http://www.toyota-industries.com/