Tuesday, September 03, 2013

Keiretsu, supplier engagment article in HBR, Sept '13 issue ..

It was an interesting article by Prof Katsuki Aoki and Tomas Taro Leneffors in the Sept '13 issue of HBR.

Benefits of Keiretsu are

1. Keiretsu helps in bringing innovation, reduce product development time and costs of products by allowing the OEMs who work with the suppliers, training suppliers' engineers, bringing suppliers' engineers into new product development teams at the OEM.

Keiretsu helps the suppliers by making their organisation a learning organisation, helping OEMs to be more competitive.

Important points

1. develop trust and good relationship with suppliers
2. do not be specific in what suppliers need to achieve as stated in the terms of engagement. Let there be vagueness which helps the supplier to improvise and come up with startling changes and improvements.
3. Instead of buying individual parts, suppliers are encouraged to supply integrated systems of components.
4. suppliers are encouraged to bring in changes like reducing weight, improving product performance etc voluntarily
5. encourage obeya meetings, (large hall) where all stakeholders are consulted and consensus arrived at before final design is approved
6. suppliers willing to experiment and learn from mistakes and experience are the most promising ones who need o be nourished,.


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