Using Supplier Networks to Learn Faster Harvard Case Solution & Analysis

Many companies keep their suppliers and partners at arm's length, jealous of inner knowing. Toyota Motor Corp, however, covers its suppliers and encourages the sharing of knowledge through the established networks. Toyota has developed a cross-organizational processes that facilitate the transfer of both explicit and implicit knowledge. Three key processes revolve around supplier associations (for the general exchange of information), consulting groups (seminars, and on-site assistance from Toyota), and training teams (on the site of the exchange of know-how in small groups). With Toyota, suppliers are required to put the operation as long as compared to their competitors work for Toyota, they have a 14% higher output per worker, 25% lower than stocks, and 50% fewer defects. Improving the quality of Toyota can charge a premium to the price of their products. Toyota experience suggests that competitive advantage can be created and supported by superior knowledge of processes within the supply chain. According to the authors, these principles have application in other unions, too, including joint ventures. In fact, they argue that the creation of effective inter-organizational knowledge sharing processes with suppliers and partners can be crucial for any company. The authors argue that knowledge sharing with suppliers is the basis for the possibility of a dynamic learning Toyota and may be one of a truly sustainable competitive advantage. "Hide
by Jeffrey H. Dyer, Neil W. Hatch Source: MIT Sloan Management Review 9 pages. Publication Date: April 1, 2004. Prod. #: SMR137-PDF-ENG

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