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Sunday, September 02, 2007

The Toyota-Aisin Crisis, Impressive

Read an analysis of the Toyota Aisin crisis by Dunkan Watts (Dunkan Watts, Six Degrees: The Science of a Connected Age)
Aisin Seiki, a spun off of Tyota produces a class of devices call P-valves, which are used in all Toyota cars to prevent skidding. On account if its spotless performance records, Aisin Seiki has become Toyota's sol provider of P-valves. Due to reasons of efficiency, Aisid has chosen to locate al P-valve production in a single factory, the Kariya plant 1, which was producing 32500 valves a day in 1997. Because just in time system is adopted in Toyota (for maximum flexibility), Toyota was holding only about two days' worth of P-valves in stock.
On Saturday, February 1, 1997, the Kariya plant burned down. All production lines producing P-valves were destroyed. It would take months to rebuild production capacity. At the time Toyota was rolling more then 15000 cars a day. In two days all priduction had ceased.
In an astonishing coordinated response by over 200 firms and almost no centralized control, production of more then one hundred P-valves was reestablished within three days. In a week production was restored.
How did it happen?
Toyota encourages simultaneous design and engineers, it is an everyday activity for many Toyota (as a group of companies) engineers. All the companies (there are more then 20 of them in Toyota group!) possess a common understanding of how problems should be solved. Many firms which are part of Toyota groups exchange personnel and enfgineering design in their everyday activities despite the fact that some of these firms are competing between each other. Toyota engineers are experienced in each other informations resources, lines of communications. They understand and trust each other.
Basically, the crisis was divided in a distributed way among all 200 firms, some of them had to change own production plans completely and re-allocate engineers.

See also
How Toyota Handles...

The outcome:
inter-team cooperation, inter-team problem solving, personnel exchange, common understanding of approaches and how problem should be solved may give a very impressive results.

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