“The process of emulation in business behavior has been exhaustively researched and would appear to be a phenomenon unusually marked in the automotive manufacturing and supply industry. Supply chain firms, because of the nature of contracting byToyota, tend to emulate more rapidly than do other firms. This is because of the unique nature of the contracts offered to suppliers.
Relatively long-term contracts are offered provided that the exacting standards for quality and JIT delivery can be maintained. “Obligational contracting”, as it is known, involves guaranteed long-term partnerships characterized by close, face-to-face contacts between purchaser and supplier.” (Winfield & Kerrin, 1996) In the procurement management process in the Toyota Production System the company personnel in charge of handling inventory procurement and raw material supply management contacts the suppliers, goes to their operational plants and offices to involve themselves in a close scrutiny of the production process of the resources. They increase and facilitate communication amongst the two companies and also provide the suppliers training in terms of better management of their own production lines to the ones at the Toyota Company. This aid provided to the management enables the two companies to work for a common objective of fruitful business in terms of high profits and revenue.
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