| Summary: | Japanese supplier management practices have in past years attracted much attention
in the US and Europe. Several aspects of these practices still remain relatively
neglected, however, such as collaborative relationships between suppliers themselves.
In this paper we argue that a recent incident involving Toyota and its supplier
network reveals the importance of these relationships and their implications for firm
competitiveness. We describe how Toyota suppliers effectively and rapidly organized
a group-wide effort to restore production of a key brake-related part, whose supply
was suddenly interrupted as a result of a fire at a supplier's plant. We conclude that
this remarkable group-wide effort was a function of shared capabilities within
Toyota's supplier network. These capabilities lead to effective responses to major
crises like this one, and in normal times to decentralized and group-wide problemsolving
permitting continuous improvements in firm and group performance, under
the omnipresent yet largely invisible leadership of Toyota.
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