Patience. Perseverance. Respect.
John Munson Jr. is known to reinforce these three words in his straight-forward advice to M/WBEs seeking insight on how to become a Toyota supplier. The same trio of terms could just as accurately be used in describing Munson’s professional experience as manager, supplier diversity – purchasing at Toyota Motor Engineering & Manufacturing North America Inc.
Although new to his current role in January 2013, Munson’s leadership with TEMA Supplier Diversity dates back to 2006 when he was named the team’s assistant manager. Toyota’s dedication to supplier diversity has resulted in contracts between M/WBEs and Toyota in excess of $1 billion each year since 2005, primarily through dynamic internal and external sourcing initiatives and signature events, such as Toyota’s annual Opportunity Exchange conference and trade show. Additionally, the company has received numerous accolades for its supplier diversity excellence, including being named 2011 Corporation of the Year by the National Minority Supplier
Munson is quick to point out how Toyota’s corporate philosophy of continuous improvement inspires his team to thoroughly evaluate processes, refine programs and establish new partnerships — efforts aligned with the company’s aspiration of having world-class standards for diversity and inclusion. “Success is gratifying, and the awards and recognition we have received from colleagues and peers indicate that we are getting many things right,” Munson noted. “But, we also realize that as our society and economy become more complex and diverse, it’s imperative that Toyota’s diversity and inclusion efforts evolve to ensure we remain relevant and maintain our ability to generate meaningful results in the marketplace.”
Central to Munson’s strategy for advancing supplier diversity excellence at Toyota is establishing next-generation goals for engaging diverse suppliers. In addition to increasing future MBE spend targets, Toyota is also establishing separate targets for a new initiative that formalizes inclusion of more women business enterprises as Toyota suppliers. This process involves a tremendous level of patience, as formulating long-range spend strategies involves many different players and a complex matrix of operational and business development forecasting, along with extensive benchmarking and demographic analysis. Concurrent with these goal-setting initiatives is a drive to integrate innovation into every aspect of the company’s supplier development processes, including outreach to new geographic locations and expanding relationships with diverse suppliers in the professional service sector as well as traditional manufacturing services.
According to Munson, determining precisely how and where Toyota can create more opportunities for diversity within their supplier base is a crucial component of being able to set assertive, yet realistic, diverse spend targets. As a result, Munson and his team will be well-prepared to support Toyota’s success in reaching those new goals by already having the right strategies and processes in place to optimize Toyota’s internal and external resources.
At Toyota, supplier diversity is an essential business strategy, one with a foundation in the company’s overall appreciate the value of diversity as a corporate priority, and he welcomes the accountability that results from his responsibility in leading such an important and forward-facing aspect of his company’s operations. That alignment, according to Munson, enables him to move forward with confidence, knowing that his team’s efforts are a companywide priority with the vested interest and support of top leadership.
Because Toyota’s purchasing philosophy is strongly based in the concept of buy-where-we-build-and-build-where-we- buy, Munson and his team allocate significant time and energy to developing supplier relationships with companies in or near the communities where Toyota manufactures and sells vehicles. Supporting local suppliers not only gives Toyota the advantage of cost management, stream-lined logistics and lead delivery times — all very important business factors, of course — but also the competitive advantage of accessing new ideas and innovations from entrepreneurs and owners of smaller companies. As a high percentage of M/WBE companies are small businesses, Toyota is able to actively pursue relationships with diverse business owners in many regions of the country, while expanding its supplier base.
Cultivating a supplier relationship with Toyota, however, does not happen overnight and takes a high degree of perseverance from all parties involved. For example, if you ask some of the company’s Tier I or Tier II suppliers to estimate how long it took from the initial handshake with a Toyota representative to their first signed supplier contract, you would likely hear that it was a two-, three- or even five- or more year process.
“Toyota’s corporate philosophies and processes are quite different than most other companies,” Munson advised.
“This [policy] isn’t because we try to be overly demanding or in any way exclusive. Instead, we prefer to take time to slowly build personal and professional relationships with prospective suppliers, which also allows them time to more fully understand how we do business.” Consequently, this longer discovery phase also necessitates persistence on the part of Munson and his team as they take time to fully comprehend the intricacies of the prospective supplier’s business operations and attitude.
Ultimately, Toyota is focused on developing long-term relationships with more diverse suppliers in communities across the nation. As Munson drives Toyota to new achievements in supplier diversification and development, he knows his company has a distinctive advantage — the commitment to building productive and sustainable supplier relationships based on trust and mutual respect. “Building relationships based on trust and mutual respect are core principles of our company’s business philosophy, which many know as The Toyota Way,” Munson said. “At the end of the day, we are able to accomplish so much more together when we act like and function as a cohesive team. But, the only way to get to that point is by respecting each other’s perspectives, trusting in our respective capabilities and experience and — perhaps most important — knowing that we are all equally devoted to finding a better way.”
Toyota’s current advertising campaign proposes the friendly invitation, “Let’s Go Places.” With John Munson Jr. at the wheel for TEMA Supplier Diversity, more M/WBEs across the country can expect to discover plenty of opportunities to go places as Toyota suppliers. They just need to remember Munson’s advice of “patience, perseverance and respect,” of course.