{"id":7349,"date":"2020-09-04T07:16:02","date_gmt":"2020-09-04T12:16:02","guid":{"rendered":"https:\/\/flevy.com\/blog\/?p=7349"},"modified":"2020-12-18T21:03:01","modified_gmt":"2020-12-19T02:03:01","slug":"learning-organization-gaining-competitive-advantage-through-supplier-networks","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/learning-organization-gaining-competitive-advantage-through-supplier-networks\/","title":{"rendered":"Learning Organization &#8211; Gaining Competitive Advantage through Supplier Networks"},"content":{"rendered":"<p><strong><img decoding=\"async\" class=\"alignright size-medium wp-image-7351\" src=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/09\/LO-Stock-image-1-300x183.jpg\" alt=\"\" width=\"300\" height=\"183\" srcset=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/09\/LO-Stock-image-1-300x183.jpg 300w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/09\/LO-Stock-image-1-768x469.jpg 768w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/09\/LO-Stock-image-1-1024x626.jpg 1024w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/strong>Large manufacturers are often reluctant to share knowledge with suppliers.\u00a0 However, supplier networks are considered a great source of gaining competitive edge by <a href=\"https:\/\/flevy.com\/business-toolkit\/learning-organization\">Learning Organizations<\/a>.<\/p>\n<p>A Learning Organization is founded on innovation, free flow of ideas, and a consistent focus on transforming the ways of doing business in order to achieve the desired results. \u00a0For instance, Toyota out-performed its competitors in the 2000s era by incorporating the principles of Learning Organization in its culture and sharing technology and knowledge with its suppliers.\u00a0 This resulted in less defects, lower inventory levels, and improved labor productivity for its suppliers and higher profits for Toyota.<\/p>\n<p>Specifically, Toyota became a Learning Organization by developing the infrastructure and inter-organizational processes that enabled quick and free flow of explicit and tacit knowledge to its supplier network.\u00a0 The Learning Organization at Toyota features 3 inter-organizational processes, which became foundational to its approach to <a href=\"https:\/\/flevy.com\/browse\/stream\/supply-chain\">Supply Chain Management<\/a>:<\/p>\n<ul>\n<li><strong>Supplier Associations<\/strong><\/li>\n<li><strong>Consulting Groups<\/strong><\/li>\n<li><strong>Learning Teams<\/strong><\/li>\n<\/ul>\n<p>Let\u2019s dive deeper into these processes.<a href=\"https:\/\/flevy.com\/browse\/flevypro\/learning-organization-supplier-networks-5216\"><img decoding=\"async\" class=\"aligncenter size-full wp-image-7350\" src=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/09\/LO-Toyota-LO-image-for-blog.png\" alt=\"\" width=\"1002\" height=\"752\" srcset=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/09\/LO-Toyota-LO-image-for-blog.png 1002w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/09\/LO-Toyota-LO-image-for-blog-300x225.png 300w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2020\/09\/LO-Toyota-LO-image-for-blog-768x576.png 768w\" sizes=\"(max-width: 1002px) 100vw, 1002px\" \/><\/a><\/p>\n<h2><strong>Supplier Associations<\/strong><\/h2>\n<p>Supplier Associations were setup by Toyota, initially, to share information, valuable experience, and to extract feedback. \u00a0The knowledge-sharing mechanisms that Toyota\u2019s Supplier Associations employ include high-level sharing of explicit knowledge within the supply network regarding production plans, policies, and market trends. \u00a0The Supplier Associations hold bimonthly\/monthly meetings to discuss key topics that include cost, quality, safety, best practices, and social activities.<\/p>\n<p>These Supplier Associations enable suppliers to build relationships in Toyota at higher levels which was not a common practice in the industry.\u00a0 This resulted in tremendous improvements in supplier performance due to explicit information and experience-sharing, which ultimately benefited Toyota to achieve excellence.<\/p>\n<h2><strong>Consulting Groups<\/strong><\/h2>\n<p>By establishing Consulting Groups in the 1960s, Toyota started the practice of providing free consultation regarding valuable production knowledge to its suppliers through experts.\u00a0 This was accomplished through the creation of Operations Management Consulting Department (OMCD) in Japan in the 1960s and Toyota Supplier Support Center (TSSC) in the U.S. in 1992.<\/p>\n<p>By developing the Consulting Groups infrastructure, Toyota\u2019 consultants spent significant time at their supplier sites free of charge, helping them resolve problems in the <a href=\"https:\/\/flevy.com\/browse?askeyword=toyota+production+system&amp;submit_assearch=&amp;asdescription=on&amp;asfiletype_ppt=on&amp;asfiletype_xls=on&amp;asfiletype_doc=on&amp;asfiletype_pdf=on&amp;aslibrary_mkt=on&amp;aslibrary_fp=on\">Toyota Production System (TPS)<\/a> implementation. \u00a0Suppliers, in turn, were encouraged to share their project results and open their operations to one another. \u00a0This explicit sharing of results and knowledge enabled other suppliers to replicate best practices and benefited Toyota by negotiating <a href=\"https:\/\/flevy.com\/browse\/flevypro\/target-costing-5201\">Target Pricing<\/a> with its suppliers.<\/p>\n<h2><strong>Learning Teams<\/strong><\/h2>\n<p>Learning Teams\u2014the 3<sup>rd<\/sup> pillar of a Learning Organization\u2014were pioneered by Toyota in 1977 by organizing its suppliers into Voluntary Study Groups in Japan or Plant Development Activity (PDA) groups in the U.S. \u00a0The Learning Team collaborated voluntarily on production and <a href=\"https:\/\/flevy.com\/business-toolkit\/quality-management\">quality management<\/a>.<\/p>\n<p><strong>\u00a0<\/strong>The Learning Teams were\u2014and still are\u2014responsible for determining a theme and spending time addressing each member\u2019s problems related to that theme, making the members learn significantly by having outside pair of eyes look at their problems.\u00a0 This helped Toyota\u2019s suppliers\u2019 network achieve effective tacit knowledge transfer, explore new ideas and applications of Toyota Production System (TPS), transfer valuable lessons learnt to all stakeholders, and enhance production quality.<\/p>\n<p>Toyota follows a deliberate step-wise path to create Knowledge-Sharing Networks.\u00a0 These Knowledge-Sharing Networks are an invaluable resource for enhancing both overt and implicit information and experiences for the organization.<\/p>\n<p>Key dynamics of Toyota\u2019s Knowledge-Sharing Networks involve creating a non-threatening one-on-one relationship with suppliers through the Suppliers Association in the form of financial as well as valuable knowledge-sharing assistance.<\/p>\n<p>Interested in learning more about the dynamics of Toyota\u2019s Knowledge-Sharing Networks, the fundamental barriers to learning, and their implications on the suppliers and the manufacturer?\u00a0 You can download <a href=\"https:\/\/flevy.com\/browse\/flevypro\/learning-organization-supplier-networks-5216\">an editable PowerPoint on <strong>Learning Organization:\u00a0 Supplier Networks<\/strong> here<\/a> on the <a href=\"https:\/\/flevy.com\/browse\">Flevy documents marketplace<\/a>.<\/p>\n<h2>Do You Find Value in This Framework?<\/h2>\n<p>You can download in-depth presentations on this and hundreds of similar business frameworks from the <a href=\"https:\/\/flevy.com\/pro\/library\">FlevyPro Library<\/a>. <a href=\"https:\/\/flevy.com\/pro\">FlevyPro<\/a> is trusted and utilized by 1000s of management consultants and corporate executives. Here&#8217;s what some have to say:<\/p>\n<blockquote><p>&#8220;My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today\u2019s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.&#8221;<\/p>\n<p style=\"text-align: right;\">\u2013 Bill Branson, Founder at Strategic Business Architects<\/p>\n<\/blockquote>\n<blockquote><p>&#8220;As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.&#8221;<\/p>\n<p style=\"text-align: right;\">\u2013 David Coloma, Consulting Area Manager at Cynertia Consulting<\/p>\n<\/blockquote>\n<blockquote><p>&#8220;As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant&#8217;s toolbox.&#8221;<\/p>\n<p style=\"text-align: right;\">\u2013 Michael Duff, Managing Director at Change Strategy (UK)<\/p>\n<\/blockquote>\n<blockquote><p>&#8220;FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight \u2013 it&#8217;s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.&#8221;<\/p>\n<p style=\"text-align: right;\">\u2013 Roderick Cameron, Founding Partner at SGFE Ltd<\/p>\n<\/blockquote>\n<blockquote><p>&#8220;Several times a month, I browse FlevyPro for presentations relevant to the job challenge I have (I am a consultant). When the subject requires it, I explore further and buy from the Flevy Marketplace. On all occasions, I read them, analyze them. I take the most relevant and applicable ideas for my work; and, of course, all this translates to my and my clients&#8217; benefits.&#8221;<\/p>\n<p style=\"text-align: right;\">\u2013 Omar Hern\u00e1n Montes Parra, CEO at Quantum SFE<\/p>\n<\/blockquote>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Large manufacturers are often reluctant to share knowledge with suppliers.\u00a0 However, supplier networks are considered a great source of gaining competitive edge by Learning Organizations. A Learning Organization is founded on innovation, free flow of ideas, and a consistent focus on transforming the ways of doing business in order to achieve the desired results. \u00a0For&hellip;&nbsp;<a href=\"https:\/\/flevy.com\/blog\/learning-organization-gaining-competitive-advantage-through-supplier-networks\/\" rel=\"bookmark\"><span class=\"screen-reader-text\">Learning Organization &#8211; Gaining Competitive Advantage through Supplier Networks<\/span><\/a><\/p>\n","protected":false},"author":110,"featured_media":7351,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[82,85],"tags":[2140,2143,2139,1626,2138,2141,2142,2137],"class_list":["post-7349","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-operations","category-organization","tag-consulting-groups","tag-knowledge-sharing-networks","tag-leading-automotive-manufacturer","tag-learning-organization","tag-learning-organization-at-toyota","tag-learning-teams","tag-supplier-associations","tag-supplier-networks"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/110"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=7349"}],"version-history":[{"count":5,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7349\/revisions"}],"predecessor-version":[{"id":7803,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/7349\/revisions\/7803"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/7351"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=7349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=7349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=7349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}