ERLANGER, KY. — Toyota Motor Manufacturing North America Inc., a relative latecomer to minority development programs compared to its U.S.-based brethren, has caught up in a hurry. Toyota's Supplier Diversity Program has benefited more than 100 minority-owned companies.
"It makes very good business sense," said Charles Hendrix, assistant manager for supplier diversity at Toyota's North American headquarters in Erlanger. "We don't want to see good suppliers fall by the wayside. We'd rather have inclusiveness than exclusivity."
In many ways, Toyota was excluded itself. While Big Three carmakers announced joint plans in 1993 to source 5 percent of their purchases from minority-owned businesses, Japanese-based carmakers were not invited to the party.
Instead, Toyota and others, including Honda of America Manufacturing Inc., started work on their own. In 1997, Toyota set a 5 percent minority-sourcing target. It is on course to meet that target by 2002, Hendrix said.
That includes asking its Tier 1 suppliers to follow suit with the same target.
The carmaker is taking a novel approach to bulking up its supplier base. Toyota hosts an annual Opportunity Exchange, now in its 10th year, that unites Tier 1 suppliers with minority-owned companies. Toyota lines up interviews between the two parties, trying to marry their needs.
The firm also is starting an online reporting system to check contracts. Both Tier 1 auto suppliers and minority-owned vendors must report the work in progress. The dual reports act as a fire wall to ensure that Toyota is receiving accurate information, Hendrix said.
Some major auto suppliers also have ramped up their minority activities. Troy, Mich.-based Delphi Automotive Systems is selecting a group of 25-30 minority-owned firms that it will mentor, said Deborah Pickens, manager of Delphi's minority supplier development.
Delphi will help them identify business opportunities and analyze why they might be winning or losing contracts, Pickens said. The program, called Minority Supplier Development Plus, was launched in January.
"The purpose is to help them build a business plan," Pickens said. "Their customers could be looking for full-service molders instead of a shoot-and-ship operation, or they might need different types of equipment. We want to help with direction."
And Southfield, Mich.-based Lear Corp. attempts to expose its minority-owned suppliers to prudent business practices, said Charles E. White, Lear director of supplier diversity. Lear audits facilities and works to strengthen areas of deficiency, he said.
"The quality side is where problems normally come up," White said. "Suppliers take on more than they can actually handle and get themselves in trouble. They need to be cognizant of what they are capable of doing and what their limitations are."
With programs in place, Lear has grown from doing about $65 million in business with minority-owned companies five years ago to $250 million in 1999. The firm hopes to exceed $300 million this year, White said.