Title: Strategic procurement through build to order system: an analysis of Japanese auto-manufacturers

Authors: Takahiro Tomino; YoungWon Park; Paul Hong

Addresses: School of Commerce, Meiji University, 1-1 Surugadai, Kanda, Chiyoda-ku, Tokyo, 101-8301, Japan. ' Waseda Institute for Advanced Study, Waseda University, 1-6-1 Nishi Waseda, Shinjuku-ku, Tokyo 169-8050, Japan. ' Information Operations and Technology Management, College of Business and Innovation, The University of Toledo, Toledo, OH 43606, USA

Abstract: Although strategic procurement has been approached in micro- or macro-purchasing perspective, it has rarely been examined from integration of customer requirements into manufacturing processes through effective insourcing and outsourcing practises. Effective cost reduction in manufacturing firms involves all the component parts. Thus, strategic procurement requires long-term manufacturing process planning based on responsive customer information systems and supplier integration for strategic procurement. This study focuses strategic procurement practises of Nissan, Toyota and Honda companies through their build to order system. Strategic procurement in particular utilises integration of customer information with all aspects of monozukuri. The key is to achieve short turnover time. Paradoxically, such short turnover time requires long-term production planning. In this paper, we also compare Nissan Production Way (NPW) with BTO of Toyota and Honda Motor Company. Theoretical and managerial implications are discussed.

Keywords: strategic procurement; build to order; BTO; Japan; automotive manufacturers; Nissan Production Way; NPW; automobile industry; customer requirements; insourcing; outsourcing; process planning; supplier integration; monozukuri; Toyota; Honda; turnover time.

DOI: 10.1504/IJPM.2012.047197

International Journal of Procurement Management, 2012 Vol.5 No.4, pp.413 - 429

Published online: 30 May 2012 *

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