8/10/2023 0 Comments Toyota jitDo you think Toyota researched these companies to use as a benchmark to see how they responded after their respective natural disasters? However, Khush’s comments got me thinking about previous natural disasters that had significant economic impact. Giovanni: Thanks for the great read! To echo George, in classic Toyota fashion, I found their reaction to the problem to be ingenious. “Reducing the risk of supply chain disruptions.” MIT Sloan Management Review 55.3 (2014): 73. “Supply chain competitiveness and robustness: a lesson from the 2011 Tohoku earthquake and supply chain “virtual dualization”.” Tokyo, MMRC Discussion Paper Series (2011). YoungWon Park, Paul Hong, James Jungbae Roh, Supply chain lessons from the catastrophic natural disaster in Japan, In Business Horizons, Volume 56, Issue 1, 2013, Pages 75-85 Hirofumi Matsuo, Implications of the Tohoku earthquake for Toyota׳s coordination mechanism: Supply chain disruption of automotive semiconductors, In International Journal of Production Economics, Volume 161, 2015, Pages 217-227 Santos, Kash Barker, Measuring changes in international production from a disruption: Case study of the Japanese earthquake and tsunami, International Journal of Production Economics, Volume 138, Issue 2, August 2012, Pages 293-302 Motor Vehicle Supply Chain: Effects of the Japanese Earthquake and Tsunami. How will companies integrate Risk management and Just-in-Time? Will companies be willing to invest in risk reduction and supply chain resilience to hedge against extreme events but potentially losing competitiveness? Nevertheless, Just-in-Time philosophy remained almost unchanged in last 30 years, thanks to its high cost efficiency. Just-in-Time does not seem to be flexible enough to cope with disruptive events. In a world in which disruptive events happen more often it is vital for all companies to manage the trade-offs between supply chain efficiency and risk reduction. The Just-In-Time is an efficient way to reduce wastes but not resilient to unpredictable extreme events. Last, inventory management needs to be integrated in the Toyota philosophy. Toyota should also consider a dualization of its most relevant suppliers, switching from a single supplier to a more balanced approach which would involve different suppliers delivering same components. In this light, Big Data could support Toyota in increasing the overall transparency of its supply chain, providing live information about potential disruptive events at supplier sites, their inventory level and WIP status. Nevertheless, with extreme events becoming more probable, Toyota should further improve its supply chain resilience. The success of the hard-testing showed that Toyota was on the right path. Toyota restored full production by Thursday, April 28. But within days Toyota bounced back with plans to bring the plants online starting April 25. Toyota initially suspended all production in Japan. Toyota had a hard-testing of its revised production system when a series of earthquakes happened in April 2016. The last action was to force suppliers to hold as much as a few months’ worth of inventory of specialized components. Regionalization will reduce the fragility of global supply chains containing the impact of a disruptive event to a single region. In addition, Toyota decided to regionalize the supply chain. Then, Toyota built a database with information about thousands of parts stored at 650,000 supplier sites, which helps bypass bottlenecks when one supplier gets knocked out of commission. First, Toyota adopted some components that are standardized across all Japanese automakers so that they could be manufactured in several locations and shared among automakers if needed. Pathways to Just Digital Future Watch this tech inequality series featuring scholars, practitioners, & activists In 2011, Toyota executive VP Shinichi Sasaki told Reuters that Toyota is developing a five-year plan that would enable a recovery from a hit within two weeks. Toyota action plan and 2016 unplanned testing The entire philosophy of Just-in-Time was under attack and Toyota had to decide how to react. To mitigate risks in case of future hits, other Japanese automakers started to build redundant inventory, selected multiple or even redundant suppliers and adopted more standardized components for different vehicles. Toyota had a 77% fall in profits in the second quarter of 2011, equivalent to $1,36BN. In addition, Toyota’s north American production was cut to 30% for the subsequent 6 months due to a shortage of 150 different parts which should have been produced by Toyota’s Japanese plants. After the earthquake most of Toyota’s Japanese plants were closed for nearly two months. At that time, Toyota built 45% of its vehicles in Japan. The 9-magnitude quake was the largest tremor to hit the country since 1850. In March 2011, Japan was shocked by a deadly earthquake and Tsunami.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |