How Toyota buys molds


Being a supplier to Toyota is a coveted position, and the Japanese car company is dedicated to helping ensure that its U.S. mold suppliers for the company's U.S. manufacturing operations provide the best molds at a globally competitive price.

Toyota Motor Engineering & Manufacturing North America Inc. (Erlanger, KY) has a better way to deal with tool and mold suppliers. Recently I was invited to attend a Tooling and Mold Suppliers training seminar that helps these suppliers understand the Toyota way, and what they need to do to be a good supplier to Toyota and it's Tier Ones. It was refreshing to experience an automotive OEM willing to actually help their suppliers be successful! It's a business model that the Detroit automakers could emulate.
Through its Purchasing Tooling Cost Analysis Group (PTCAG), Toyota has determined the cost of molds based on the types of molds and the various components used, in all regions around the world. The purpose of this is to make sure that the company is paying the "right" price for the mold, not necessarily the "cheapest" price or the "highest" price.

More than a decade ago, when Jeffrey Lucas joined Toyota as Project Assistant Manager for TEMA's Purchasing - Tooling at the Toyota Operation Center in Erlanger, KY, Toyota wanted to know if they were paying too much for their molds. At the time, Lucas noted that Toyota believed it was paying about 20% too much. In reality, when Lucas began delving into the matter, they were paying much more than that 20%. Thus was born the PTCAG....
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