What is Kyoryoku Kai
Kyoryoku Kai is a Japanese term for supplier association which is widely used within lean supply chain activity. In essence Kyoryoku Kai is a collection of a company's most important suppliers which work together to develop, through improved communications, more efficient methods of working. Usually suppliers, who are part of such an association, meet on a regular basis to discuss improvements and production techniques – to lower the total cost of production.
Kyoryoku Kai have their roots in the 1930’s with Toyota who encouraged association between its (then) twenty major suppliers. Whilst not being directly involved in the running of the association – Toyota was a beneficiary in the improvements derived from the association.
Supplier associations by there very nature infer some delegation of control by the primary contractor – and this decrees to an extent the size of the network involved (single supplier networks do not benefit from Kyoryoku Kai.). Control is usually delegated by the primary manufacturer to a supplier or subcontractor that “chairs” the relationships and co-ordinates improvement activity.
Kyoryoku Kai have been prominent in the automotive industry as a way of organising the supply chain – this method has become prominent within each of the major manufacturers today and indeed has spread out to other industries such as the
information technology sector. It’s widely acknowledged that today’s supplier Associations Forms one of the fundamentals of a world class supply chain.