Many manufacturers today are concerned with the inefficient manufacturing and delivery practices of their company’s suppliers. Before pointing a finger accusingly at their suppliers, however, perhaps they should examine their own policies and procedures. Any manufacturer can learn this lesson from U.S. automakers, their Japanese rivals that have set up operations in the United States and the automotive suppliers that provide parts to both groups.

In the 1980s and 1990s, Japanese auto-makers built significant production capacity in the United States, and their world-class manufacturing practices quickly became the new quality standard for the U.S. automotive industry. These practices went well beyond the just-in-time (JIT) delivery of parts to a plant and included all aspects of lean manufacturing. (See “Lean Manufacturing and Just-In-Time Delivery.”) The transplanted Japanese automakers, with their lean focus, realized that their success depended on developing a local supply base, which meant sharing with U.S. suppliers the innovative manufacturing-management practices and technologies that made similar plants so competitive in Japan.1 Some skeptics claimed that lean manufacturing would never work in North America, considering the continent’s size and transportation systems that might not be able to deliver materials reliably just in time. But Japanese companies in the United States seemed to prove otherwise. U.S. automobile manufacturers began following the lead of their Japanese counterparts, transforming themselves in the lean direction and demanding JIT logistics from their suppliers. See sidebar.

For automakers to effectively practice a lean approach, it would seem critical that suppliers make the transition from traditional mass production systems to lean systems internally and in their logistics practices.2 In fact, this is only partly true. The logistics practices and internal management policies of the automakers — in other words, of the customers themselves — may have a more profound impact on the supplier’s ability to respond with lean systems and thereby get the right parts to the right place at the right time.

The performance of U.S. suppliers to the automotive industry in North America demonstrates the impact of customer policies on supply-chain management: U.S. suppliers perform at much higher levels when they are supplying Japanese automakers than when working with U.S. automakers. To compare the policies and practices of the Big Three automakers and Japanese transplants, we surveyed supplier plants that made comparable products for U.S. and Japanese customers. (See