Knowledge Network of Toyota

Abstract

Knowledge is a source of firm's competitiveness and is created, diffused, and standardized within a company's knowledge network. The knowledge network of Toyota Motor Corporation in Japan comprises multiple automotive plants, the Operation Management Consulting Division (OMCD), and the Global Production Center (GPC) as nodes on that network. Knowledge is created on a manufacturing plant floor and diffused between multiple automotive plants through a direct interacting network without standardization. The OMCD diffuses both standardized and unstandardized knowledge. The GPC's important function is knowledge standardization. In conclusion, Toyota's domestic knowledge network maintains a balance between the diversification and standardization of knowledge created on the production floor through a mix of nodes at various standardization levels.

How can a buying company develop a Toyota-style supplier network while its lean capabilities are still evolving?

“…Toyota not only sets targets and encourages performance improvements but also develops their suppliers' lean capabilities through unprecedented direct involvement in the suppliers' operations over time (MacDuffie and Helper, 1997;Liker and Choi, 2004;Loh and Lau, 2019;dos Santos et al, 2020). In TSN, suppliers gain access to Toyota's internal lean experts and competence centers that provide arenas for knowledge-sharing (Hines et al, 2004;Suh, 2017;Iwao and Kato, 2019;Powell and Coughlan, 2020); and Early supplier involvement. Japanese firms involve suppliers early in design processes to improve information exchange, minimize design changes, reduce information processing workload and reduce lead times (Lamming, 1993;Fujimoto, 1999;Schoenherr and Wagner, 2016;Morgan and Liker, 2020;Potter and Paulraj, 2020;Potter and Wilhelm, 2020).…”

“…Toyota's suppliers deliver components just-in-time based on lean principles (Cusumano, 1994;Fujimoto, 1999;Lu and Bodek, 2018), which are difficult to codify and transfer because they entail tacit know-how (Langfield-Smith and Greenwood, 1998;Dyer and Nobeoka, 2000;Suh, 2017;Nordin et al, 2019). Therefore, Toyota employs on-the-job activities to teach suppliers the Toyota Production System (Bicheno and Holweg, 2016;Hines, 2016;Suh, 2017). To enable these activities, Toyota established the Operation Management Consulting Division (OMCD) in Japan.…”

“…In addition, the Global Production Centre diffuses standardized and unstandardized knowledge by using videos and animations (Suh, 2017).…”

“…2.3.2.2 Stage II: creating strong dyadic relationships. In the mid-1960s, Toyota Japan inaugurated its consulting division, OMCD (Dyer and Nobeoka, 2000;Suh, 2017). Thirty years later, the Toyota Supplier Support Center (TSSC) was established in the USA (Sako, 2004;Liker and Wu, 2006;Marksberry, 2012) to enhance the capabilities of single suppliers through on-site consultancy involving deep buyer-supplier interaction.…”

Factory strategy

“…In addition, the study set three factors as strategic reasons for location: access to low-cost production (locations with cheap labor and material costs), market access, and access to skills and knowledge. 2 There have been many studies on the role of mother plants with discussions on global plant networks in international management theory, and even studies of Japanese firms (Amano, 2005;Hamamatsu, 2017;Oki, 2012Oki, , 2014Oki, , 2015Oki, , 2016Suh, 2016Suh, , 2017aSuh, , 2017b. and a measurement scale for choosing the top three "reasons for locating and using a plant" from among supplier proximity, labor availability, usability of skills and know-how, market proximity, sociopolitical reasons, competition, energy, and other factors.…”