The new, improved keiretsu

  • Aoki K
  • Lennerfors T
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Abstract

During the past decade, some of Japan's most dominant companies have been quietly turning their supplier relationships into a tool that helps them innovate faster while radically cutting costs. This is the new keiretsu--a modern version of the traditional system in which buyers formed close, collaborative associations with suppliers. Toyota provides a compelling example of how keiretsu, which lost luster during the cost-cutting of the 1990s, is being revived and reinvented. The company today has vendor relationships that are more open, more global, and more cost-conscious than traditional keiretsu ever were and that provide even stronger bonds of trust, cooperation, and educational support. The authors examine the evolution of Toyota's keiretsu and explore the numerous lessons for developed-world and emerging-market companies seeking to improve their supplier relationships for lasting gain. Such companies should think short-term and long-term; know their suppliers well and develop trust with them; balance implicit and explicit communication; identify the suppliers most worth improving; and involve suppliers in developing new products. Those elements are critical even in a hypercompetitive, cost-obsessed environment, because as they speed production and boost innovation, they reduce the hidden costs of the arm's-length supplier relationships prevalent in the West. INSET: Why Are Keiretsu So Durable?. [ABSTRACT FROM AUTHOR] Harvard Business Review Notice of Use Restrictions, May 2009Harvard Business Review and Harvard Business Publishing Newsletter content on EBSCOhost is licensed for the private individual use of authorized EBSCOhost users. It is not intended for use as assigned course material in academic institutions nor as corporate learning or training materials in businesses. Academic licensees may not use this content in electronic reserves, electronic course packs, persistent linking from syllabi or by any other means of incorporating the content into course resources. Business licensees may not host this content on learning management systems or use persistent linking or other means to incorporate the content into learning management systems. Harvard Business Publishing will be pleased to grant permission to make this content available through such means. For rates and permission, contact permissions@harvardbusiness.org. (Copyright applies to all Abstracts.)

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  • ISSN: 00178012
  • PUI: 369567289
  • SGR: 84881529885
  • PMID: 89716266
  • SCOPUS: 2-s2.0-84881529885
  • ISBN: 00178012

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