Creating lean suppliers: Diffusing lean production throughout the supply chain

Honda of America has developed a comprehensive approach to teaching the principles of lean production to its suppliers in which Honda and the supplier work intensively on narrowly targeted improvement projects in the supplier's plant. Called BP (for ''Best Process,'' ''Best Performance,'' ''Best Practice''), this approach has been quite successful in enhancing supplier performance; suppliers participating in the program in 1994 averaged productivity gains of 50% on lines reengineered by BP. However; Honda has found there is high variation in the extent to which suppliers were able to transfer the lessons taught beyond the line or plant where the BP intervention occurred. Drawing on case studies of three of Honda's U.S. suppliers, this article explores how the BP process interacts with the broader relationship between customer and supplier in terms of organizational learning, technology transfer, and the transplantation of Japanese management practices to the United States. These cases illustrate the dynamics of the learning process and the complex relationship that emerges between the ''teacher'' (provider) of valuable knowledge and the ''student'' (recipient).