Toyota eyes quake-proof supply chain

By Freddie Pierce
Risk management has become a huge topic of discussion among supply chain professionals. The recent transgressions stemming from the Japan disaster and...

Risk management has become a huge topic of discussion among supply chain professionals. The recent transgressions stemming from the Japan disaster and Hurricane Irene are only hastening the movement to better risk management practices.

Toyota was one of the most broadly impacted companies affected by the Japan earthquake and tsunami, and is reportedly taking steps to ensure that its supply chain is earthquake-proof.

“We’re making checks now to see what needs to be done to enable a recovery within two weeks when the next one – expected in the central Tokai region – hits,” Toyota Executive Vice President Shinichi Sasaki told Reuters. “We’re about 80 percent done with those checks.”

Sasaki went on to say that Toyota has implemented a three-step program to help combat supply chain risks in the future, a plan that he said is expected to be completed in about five years.

The first step in the program is to work to standardize auto parts across Japanese automakers, so that companies can share common components that could be manufactured in several locations.

The second step involves suppliers further down the chain, who will be asked to hold as much as a few months worth of inventory of specialized components to safeguard against manufacturing problems.

SEE OTHER TOP STORIES IN THE SUPPLY CHAIN DIGITAL CONTENT NETWORK

Japan auto supply recovering faster than expected

Why the Japan Disaster can help supply chains

Check out September’s issue of Supply Chain Digital!

The final step in Toyota’s supply chain risk protocol is to make each region independent in its parts procurement so that another earthquake wouldn’t impact production overseas.

That’s a pretty bold plan, even from a company as prestigious as Toyota. Car and electronics manufacturers are still feeling effects from the March earthquake, including Toyota, where the Japan disaster has impacted the company some six months after the initial 9.0 earthquake.

If Toyota can pull this off, however, it would be a monumental step forward in supply chain risk management, and a breakthrough that could be taken up by supply chain professionals in car companies around the globe.

Click here to download Supply Chain Digital’s iPad app!

Share

Featured Articles

PwC Examines Digital Trends in Operations for 2024

PwC’s Digital Trends in Operations Survey for 2024 demonstrates a significant proportion of firms are struggling to achieve their desired outcomes

P&SC LIVE New York 2024 Virutal - SAVE THE DATE

Don’t miss out on your chance to attend Procurement & Supply Chain LIVE New York in 2024 Virtually, 5-6 June

Charities & NGOs Submit to The Global P&SC Awards for FREE

The Global Procurement & Supply Chain Awards hosted at P&SC LIVE London Sept 2024 welcomes charities and NGOs to submit for FREE

Procurement & Supply Chain LIVE: 2024 Dates to Remember

Digital Supply Chain

Gartner Unveils Top Supply Chain Technology Trends for 2024

Technology

What the Latest CSDDD Milestone Means for Supply Chains

Sustainability