MBN USA

August 21, 2024

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Lynch: Toyota's diverse suppliers reflect its customers

Q: Tell us a bit about your background. How long have you been with Toyota?

A: I have been with Toyota for 27 years. I was attending college in Kentucky and accepted an internship in the indirect purchasing group at the TMMK [Toyota Motor Manufacturing Kentucky] plant in Georgetown, Kentucky. It was supposed to be a one-semester job, and it turned into a 27-year career.

Q: How did you end up in supply-chain procurement?

A: I studied accounting and had never given much thought to — or even heard of — supply chain or procurement. Supply-chain management was not a prominent degree program at the time. At the start of my internship at Toyota, I learned that it is a great way to experience and impact every area of the business. All of my formal training was on the job, and my various roles at Toyota have given me exposure and experience in all areas of direct and indirect procurement.

Q: How long have you worked in supplier diversity sourcing?

A: Since my start in procurement. From Day One, my mentors and predecessors explained the importance of — and Toyota’s commitment to — supplier diversity. Toyota procurement is founded in strategic decision-making. Part of that strategy emphasizes inclusion of diverse and local suppliers. That strategic focus is what makes Toyota an industry leader in supplier diversity.

Q: Why is supplier-diversity inclusion important to Toyota?

A: The Toyota Way is built on two pillars: respect for people and continuous improvement. Our commitment to supplier diversity is rooted in respect for people. Toyota believes our supply base should reflect our customer base. So, while we have supplier-diversity goals, the more important purpose is not about targets, publications or awards. It is about the respect for our customers and our suppliers. We know that a diversity of viewpoints within and across our teams strengthens our operation, results and customer satisfaction. And when I say, “our team,” that includes supplier partners who are an important extension of Toyota.

Q: There’s been quite a bit of discussion about Tier I and Tier II collaboration. How is that approach working out?

A: Toyota has always found great success in collaboration between our Tier I and Tier II suppliers. As our supplier partners, we expect our Tier I suppliers to emulate the Toyota Way values. These values include respect for people and our value of supply-chain diversity. As such, we encourage a strategic approach to providing opportunities for diverse suppliers. In addition, we provide networking opportunities like Toyota Opportunity Exchange to help diverse suppliers connect and grow relationships with Tier I partners. I am pleased to share that most of our Tier I suppliers already know the value of partnering with diverse companies. They seek opportunities to cultivate diverse partnerships well beyond Toyota’s expectations.

Engaging our Tier I suppliers in this effort has opened up opportunities exponentially and contributes to outstanding growth and success. Diverse companies gain exposure to opportunities well beyond Toyota’s business as a result of these collaborative relationships.

Many of these diverse companies utilize Tier II opportunities to develop or expand their businesses. As a result, some eventually become Tier I suppliers for Toyota and other companies.

Q: What is the best way for diverse suppliers to form relationships for Tier I opportunities?

A: First, get involved with your local councils like NMSDC [National Minority Supplier Development Council Inc.] and WBENC [Women’s Business Enterprise National Council]. These councils provide tremendous networking opportunities to establish relationships with both corporate buying entities and sub-tier suppliers within many different industries.

Second, don’t be afraid to start small or to partner with sub-suppliers. There is so much to gain when you embrace these possibilities. Both situations create a path for diverse suppliers to grow new and larger opportunities and partnerships.

Q:  How important are minority- and women-owned certifications to corporate supplier outreach?

A: Certification is critical to protect the integrity of supplier-diversity programs. Though sometimes a little cumbersome, the certification process is important to ensure that companies claiming to be MBEs [minority business enterprises] or WBEs [women’s business enterprises] are truly owned and operated by the intended individuals. As corporate members, we often do not have the resources to make this assessment. So, we rely on certifying councils to do this, thereby validating that Toyota includes the appropriate companies in our sourcing process.

Q: Recent legislation abolishing diverse-supplier initiatives is really creating a concern in the MWBE [minority and women’s business enterprise] community. Will it have any effect on Toyota’s support for diversity inclusion?

A: It will not. Like most companies, Toyota has a responsibility to take a careful, thoughtful approach to such issues. Ultimately, our supplier diversity program always has [identified] — and will continue to identify — opportunities for diverse companies to earn business. Potential suppliers undergo a rigorous evaluation in a variety of ways. Our program has never been about “giving” business to diverse companies, but rather finding the best supplier in every circumstance. Toyota has found that the size and flexibility of many diverse companies is exactly what we need in some situations.