I was at Toyota back in ’97. I vaguely remember this incident but being at the US distributor in California, we were a little insulated from the reality of the fire. In retrospect, it is interesting to consider this event as one way that Japanese-style business structure can work even in extreme circumstances. I’m sure Toyota learned never to source key parts from only one vendor.
In 1997, the Toyota group suffered what seemed like a catastrophic failure in its production system when a key factory -the sole source of a particular kind of valve essential to the braking systems of all Toyota vehicles- burned to the ground overnight. Because of their much-vaunted just-in-time inventory system, the company maintained only three days of stock, while a new factory would take six months to build. In the meantime Toyota’s production of over 15,000 cars a day would grind to an absolute halt. This was the kind of disaster with the potential to wreck not just the company itself, but the entire Japanese automotive industry.
Decentralized Intelligence – What Toyota can teach the 9/11 commission about intelligence gathering [slate.msn.com]
You start out reading the article with a lot of anticipation, but by the time you’re halfway into the article, you realize that the author doesn’t have the slightest idea how Toyota pulled the whole thing off!!
True. Very true. The point though, is still valid. That decentralized responses can work. There are many caveats associated with that though. I think the costs for a centralized response (say to terrorism) are really high (look at the budget deficit Dubya has run up this term.)
It’s not a panacea. I think the takeaway for me, in this case, is that Japanese businesses sometimes do work in ways that best reflect the nature of Japanese culture. There are other ways in which Japanese culture hampers business, but that’s for another day and a different post