How did Toyata create a network 'identity'?

Toyota's network is known (labeled) as the `Toyota

group'.

Toyota creates a shared network identity by

developing multiple groups
The supplier association
Toyota's operations management consulting division
Voluntary small group learning teams (jishuken)
(Interfirm employee transfers)

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Supplier association

Kyohokai: Toyota's supplier association was

established in 1943

Suppliers must be close to each other

Tokai (150 members)
Kanto (65 members)
Kansai (29 members)

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Supplier association

Suppliers association has general (high level)

meetings every other month
Quality committees.
Excellent plant tours allow network members to visit
`best practice' plants
Quality management conference held once a year
lectures from directors, senior managers + six success
ful supplier cases of quality improvement

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Consulting teams

Toyota's Operations Management Consulting

Division (OMCD)
6 senior executives, 50 consultants
Direct free `on-site' assistance for suppliers
periods ranging from one day to many months
on average suppliers are visited about 4 times a
year with an average visit lasting 3 days
emergent problem solving: cross divisional
problems solving teams helping a supplier

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Voluntary learning teams

Jishuken: 60 of the key suppliers `voluntary study

groups'
Each group consists of roughly 5-8 suppliers
geographic proximity
no direct competitors in the same group
level of experience with Toyota
Groups are reorganized every 3 years (Why?)

After determining theme, the group visits each

member to develop suggestions

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Voluntary learning teams (II)

Jishuken are reported to be very valuable

(especially in transmitting tacit knowledge)

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Network rules for knowledge
protection
Creating an identity isn't enough to solve sharing
and free riding problems

Toyota sets a norm/rule by sharing its own

knowledge
eliminating the notion that there is `propriety knowledge'

Suppliers must be willing to open their plants to

other network members to other network members
reciprocal obligations: We will help you, but in return, you
must agree to help the network.
reciprocity norm, is
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77
Network rules for knowledge
protection
Tacit rule about value appropriation
The recipient of knowledge may appropriate 100 percent of
the savings in the short run, but over time will be expected
to share a proportion of those savings with the network
Compare Toyata practice with the GM consultancy teams
(PICOS)

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Creating multiple knowledge sharing processes

How to maximize
efficiency?

Toyota established variety

of bilateral and multilateral
processes, each designed to
facilitate different types of
knowledge

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The creation and evolution of Toyata's US
knowledge sharing network

1988: Toyota begins producing cars in Georgetown,

Kentucky
Suppliers had virtually now contact with each other,
how did Toyota implement its knowledge
management ?
Phase 1: Developing weak ties among suppliers
Phase 2: Developing strong ties with Toyota
Phase 3: Developing strong ties among suppliers

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1. Developing weak ties

1989 Toyota initiates supplier association (BAMA)

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 2: strong ties with Toyota

Free of charge well trained consultants made available

to BAMA members

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3: strong ties among suppliers

Toyota divided suppliers in small learning teams

-no competitors
-rotation
-equal capabilities
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One large network with core firm as hub Large network plus multiple nested networks
Bilateral relationships Multi-lateral relationships
Weak ties/arm's lenght relations
Strong/embedded ties in nested networks
Structural holes with core firm
Explicit knowledge Dense network
Members motivated to demonstrate commitment
Both explicit and tacit knowledge
Power game
reciprocity; benefits of participation
self-interest outweigh isolation
independence
Trust game
closed formal contracts
fairness
interdepence
open informal contracts

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