Denso, a Toyota supplier, is one of the few automotive suppliers in the US that's growing. Why? One, of course, is that they're very tied to Toyota, who is growing. That's always nice. But they are also winning business from the Big 3. They are winning that business not because of cost cutting but because of innovation. Bringing new ideas and new technologies to a market is the best way to win new business, not just offering stuff cheaper than the next guy.
Part of the analysis in this article included comments as to why they are able to innovate included comments from some Plante and Moran analyst. He said that Denso could innovate because they could pour profits into development because they are tied to Toyota's growth. This misses most of the story. Being tied to Toyota means they also practice the Toyota approach to their business. They deeply understand their current state. They constantly pursue adding value and eliminating waste. They always reflect and learn on both success and failure. It's not just that they have lots of money; it's what they do with that money that counts.
Definitions on lean focus too much on waste elimination. But adding value is more than just stripping waste away from the value you are ALREADY adding, it is about finding NEW ways to add value, whether that is technology development, new ideas, features or whatever. At the end of the day, it is about understanding and serving your customers' needs.
Jamie Flinchbaugh
Jamie Flinchbaugh is an accomplished Entrepreneur, Senior Executive, and Board Member with more than 20 years of success spanning finance, manufacturing, automotive, and management consulting. Leveraging extensive operational experience, Jamie is an invaluable asset for a company seeking expert guidance with process improvements, lean strategies, and leadership coaching in order to transform operations, reduce costs, and drive profitability. His areas of expertise include continuous improvement, entrepreneurship, coaching and training, process transformation, business strategy, and organizational design.
In my experience working for an american tier one supplier, innovation and adding value isn’t part of managements vocabulary. Metrics are focused, at the product level, on dates rather than quality or product performance.