Implications of Just-In-Time System of Toyota: A Case Study

By

MAHAJAN SAHIL

52115001

March 2017

Independent Final Report

Presented to

Ritsumeikan Asia Pacific University

In Partial Fulfillment of the Requirements for the Degree of

Master of Innovation and Operations Management

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 Table of Contents

List of Figures ................................................................................................. 4

Certification of Originality ............................................................................. 5

Summary ......................................................................................................... 7

CHAPTER - 1 ................................................................................................. 8

Introduction ................................................................................................. 8

Research Objective .................................................................................... 10

Hypothesis .............................................................................................. 10

Objective ................................................................................................ 10

Literature Review ...................................................................................... 10

CHAPTER – 2 .............................................................................................. 13

TOYOTA’s JUST-IN-TIME SYSTEM .................................................... 13

History and Evolution of TOYOTA ...................................................... 13

Toyota Production System ........................................................................ 15

Toyota Production System (Sub-Goals) ................................................ 19

Toyota Production System and its Basic Concepts ................................... 20

Just-in-Time System .................................................................................. 21

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 Important Points in Just-in-Time ........................................................... 22

Jidoka ......................................................................................................... 27

Features of Jidoka .................................................................................. 28

Emphasizes of Jidoka in Toyota Production System ............................. 29

Kanban System .......................................................................................... 33

Rules of Kanban ........................................................................................ 37

CHAPTER – 3 .............................................................................................. 41

Case Studies............................................................................................... 41

Case Study – I: AISIN Seiki Fire (1997) ............................................... 41

Case Study – II: Niigata Earthquake (2007) .......................................... 46

Case Study – III: Kumamoto Earthquake (2016) .................................. 50

CHAPTER – 4 .............................................................................................. 52

Conclusion ................................................................................................. 52

References ..................................................................................................... 55

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 List of Figures

Figure 1 - First Toyoda Power Loom (Toyoda Power Loom, 2016) ........................ 13

Figure 2 - First Passenger Car Prototype Model - A1 (Passenger Car Prototype,

2016) ................................................................................................................. 14

Figure 3 - Toyota Production System (Toyota Overview, 2016) ............................. 17

Figure 4 - Process of Waste Elimination (Monden, 2012) ....................................... 19

Figure 5 - Heijunka - Levelling the Flow (Toyota Overview, 2016)........................ 25

Figure 6 - Andon Board (Toyota Overview, 2016) .................................................. 28

Figure 7 - Kanban Card (Toyota Overview, 2016) ................................................... 35

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 Certification of Originality

I, Mahajan Sahil (52115001), hereby declare that the contents of this Independent

Final Report are original and true, and have not been submitted at any other university or

educational institution for the award of degree or diploma.

All the information derived from published or unpublished sources has been cited

and acknowledged appropriately in the references listed in this Independent Final Report.

Mahajan Sahil

2017/03/01

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 Acknowledgements

To begin with, I would like to express my sincere gratitude to my supervisor

Yokoyama Kenji for his support. His comments, teachings and guidance were of

very helpful in completion of my Independent Final Report.

I would like to thank my family and friends for their undying support

throughout my journey towards the completion of this Independent Final Report. It

would have not been possible without blessings.

I would also like to thank my fellow batch mates from GSM Spring 2015,

who always extended their help when I needed the most, for all those times when

we spend our nights completing reports before deadline and for all the silly stuff we

did together in the last two years.

Finally, I would like to thank GOD almighty, for showering his blessings and

guidance. Without your help, I wouldn’t be here.

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Summary

The aim of the research is to understand and analyze the impact of Just-in-Time

(JIT) system in Toyota Motor Corporation. We also discuss about the different scenarios

like natural and unforeseen disasters involving its efficiency in Toyota’s system.

In this report, philosophy of eliminating wastage through the successful application

of Just-in-Time (JIT) system and origin of “Kanban System” is discussed in depth.

Moreover, this report will help you understand the overall working of Toyota Production

System (TPS).

Furthermore, we will look into three cases from the past experiences of Toyota’s

struggle and incorporate its Just-in-Time (JIT) philosophies into real-life situations.

Which will help in answering the question, whether “Toyota should look into new

management system for maintaining continuous supplies to combat these stoppages”?The

three cases that will be studied are:

1. AISIN Seiki Fire (1997)

2. Niigata Earthquake (2007)

3. Kumamoto Earthquake (2016)

Keywords: Toyota Production System, Just in Time

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 CHAPTER - 1

Introduction

Toyota Motor Company is very well known around the globe for manufacturing

high quality automobiles. Toyota has been in the automobile industry for a long time now

and every time they introduce new automobiles, they introduce newness and innovation

of its own kind. But manufacturing automobiles is not the only contribution from Toyota

Company. Over the years, after World War II, Toyota has put in a lot of efforts to meet

the advancement required in the Japanese automobile to give a stiff competition to its

western nations. Toyota introduced many techniques for its famous Toyota Production

System like Just-in-Time System, Kanban System and Jidoka. The main goal was to

lower down production costs and increase in productivity by simply removing the

unwanted functions and practices in the factories. But these systems were so unique in its

own way that other companies around the globe in manufacturing sector implemented the

Toyota Production System strategies, but very few were able to reach the success of

Toyota. The sole reason for the failure of implementation of Toyota Production System in

overseas companies was the difference in industrial relationship, many small social

systems and its business climates available in Japanese firms.

Moreover, the whole Toyota Production System took many years of patience and

struggle to form this successful system, which is currently the heart of Toyota Company.

There were no scholars who formed and laid out rules and structure for this Toyota

Production System, it was the regular practice and daily situation occurrences in the

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Toyota factories which laid down these methods by trial-and-error processes in

manufacturing sites of Toyota Motor Company. Lately, there has been a lot of criticism

for Toyota for sticking to its decades old production system, which has led to shut down

on various occasions in the past, mainly due to its Just-in-Time System.

The purpose of this research is to determine the various implications that are faced

by Toyota Production System based on theory of Just-in-Time System. Just-in-Time

system stresses the importance to increase production efficiency and decreasing the

wastage of goods only if they are required in the production process, which helps in

lowering down inventory costs[Monden, 2012]. While it can be argued that due to

Toyota’s Just-in-Time System, in the past there have been situations which ultimately

lead to closure of Toyota factories only because of lack of inventory for its production.

The output of the research will take the form a case study of three major shutdowns

of Toyota Company in Japan. The three cases chosen were AISIN Seiki Fire in 1997,

Niigata Earthquake in 2007 and Kumamoto Earthquake in 2016. All of these three cases

were major shutdowns in the history of Toyota Company.

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Research Objective

Hypothesis

Does Toyota’s Just-in-Time System in Japan have any limitations or not?

Objective

The objective of this research is to analyze the Toyota’s Production System and its

core element of Just-in-Time System in Toyota factories which are located in Japan with

the help of three cases.

Literature Review

Studies regarding Just-in-Time System activities of various firms are mainly

focused on large companies. This research is mainly focused on the overall production

system of Toyota and its essential strategy of Just-in-Time.

In plain words, Just-in-Time is basically an inventory strategy deployed by

companies to decrease its waste, allowing it to increase its efficiency in the production

process. By doing so, it allows the company to receive goods only in hour of actual

requirement. This further lower downs the cost of maintaining the inventory and requires

accurate forecast of demand from the top management. The main advantage of this

strategy is to allow manufacturers easily move from one type of product to another by

keeping the production run span short. Moreover, this allows complete removal of

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warehouse storage requirements and lowering the spending on raw materials, resulting in

lower cost of production. But Just-in-Time inventory strategy has also received a lot of

criticism due to disruptions in the supply chain. For instance, a single supplier of raw

material faces some sort of challenge and is unable to deliver the required goods on time,

it could lead to shut down for the production house. To make this strategy work in a

positive way, manufacturers and retailers should work together, so that they can monitor

the supply of resources from manufacturers and meet the demand from consumer end

(JIT, 2016).

On February 24, 2010, Mr. Akio Toyoda in his testimony mentioned, “At Toyota,

we believe the key to making quality products is to develop quality people. Each

employee thinks about what he or she should do, continuously making improvements,

and by doing so, makes even better cars” (The Guardian, 2010). Furthermore, Mr.

Toyoda also discussed the philosophy of Toyota’s quality control. “I myself, as well as

Toyota, am not perfect. At times, we do find defects. But in such situations, we always

stop, strive to understand the problem, and make changes to improve further. In the name

of the company, its long-standing tradition and pride, we never run away from our

problems or pretend we don’t notice them. By making continuous improvements, we aim

to continue offering even better products for society. That is the core value we have kept

closest to our hearts since the founding days of the company” (The Guardian, 2010).

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 Yasuhiro Monden, an author of Toyota Production System, said “This explains the

basic idea of “continuous improvement” in the Toyota Production System and in

Toyota’s quality assurance activities” (Monden, 2012).

Moreover, Monden specified that, “strength of Toyota Production System lies in

the fact that it is a system of supply chain management in the industry as a whole.

Inter-firm coalitions are well-executed in Japanese industries. These inter-firm networks

work well in the product development phase as well as in manufacturing. The Toyota

Production System is equivalent to the management system of inter-firm relations”

(Monden, 2012).

According to David Hutchins, “nature of the Japanese quest for continuous project

by project improvement. Every deviation is examined, the causes identified and remedies

applied. Nothing is left to chance, and no deficiency, no matter how rare, is ever regarded

as a purely random event which should be ignored. This mentality is essential to the

achievement of real Just-in-Time. All attention is focused on the continued uninterrupted

flow of operations. In the calendar 1986, from a labor force of 60,000, Toyota received

2.6 million improvement proposals, 96 per cent of which were implemented either by

management or by the employees themselves” (Hutchins, 1999).

The literature discussed in this research stresses on the overall working and

importance of Toyota Production System and its most valued element “Just-in-Time”

system.

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 CHAPTER – 2

TOYOTA’s JUST-IN-TIME SYSTEM

History and Evolution of TOYOTA

Toyota Motor Corporation was founded by Kiichiro Toyoda in the late 1930’s. It

was Sakichi Toyoda, father of Kiichiro Toyoda, who was aiding his father in his loom

work, got an idea to improve the batten-equipped tall loom.

This lead to an invention of first hand loom in Japan and Sakichi Toyoda patent his

hand loom design in May 1981 in Yokohama City. It was not over for Sakichi Toyoda, in

his mind he was aiming to design a loom which runs by electricity.

After 17 years of his hardship, he came up with successful working design of

electric loom in Japan. This was also the first power loom invented in Japan and he

rightfully received the patents for his invention.

Figure 1 - First Toyoda Power Loom(Toyoda Power Loom, 2016)

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 Sakichi Toyoda was awarded with many patent rights, utility model rights and

industrial property rights during his life time. When he died in 1932, his son Kiichiro

Toyoda took over his father’s reign.

Kiichiro Toyoda took his father’s invention and works from being electric to

automatic loom. Kiichiro Toyoda also invented various automatic looms and received

patents for his invention in Japan.

Kiichiro Toyoda inventions were moving into automobiles at a fast pace and by

May 1935, he had his first completed passenger car prototype, named as “Model A1”.

The company name was finally changed to “Toyota” from “Toyoda” in October 1936.

Kiichiro Toyoda’s works lead to further heights in the core establishment of Toyota.

Figure 2 - First Passenger Car Prototype Model - A1(Passenger Car Prototype, 2016)

Today, Toyota has emerged into one of the biggest giants in automotive

manufacturer. Its headquarters are in Toyota City, Aichi, Japan. It also has employee

strength of 348,877 as of 31 March, 2016(Toyota Overview, 2016).

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 Toyota has come far from making passengers cars that run on petrol or diesel to

electric vehicles known as “Hybrid”. Toyota is a global leader in hybrid passenger

vehicles in terms of sales. Toyota Prius is one of the top selling hybrid passenger cars in

the whole world as of 30 April, 2016 (Toyota, 2016). Toyota went on producing more

than 10 million vehicles annually in 2012 and 2013 (OICA, 2012) (OICA, 2013).

Toyota has also implemented and developed world renowned systems like

“Just-in-Time” and “Kanban”. Moreover, this lead to branding of its practices known as

“Toyota Production System”. Many parts of the world recognize these managerial

practices and willingly look forward to implement in their respective workplace. During

1948 to 1975, TaiichiOhno and Eiji Toyoda, who are well known Japanese industrial

engineers, both developed this famous “Toyota Production system” through their

rigorous attempts for improvement.

Toyota Production System

Toyota Production System is a well-known production system not only within

Japanese community, but worldwide as too, for its distinctive feature – reducing the

production cost. Japan has fewer natural resources as compared to other big countries like

USA and European countries, which leads to increase in its costing of raw materials in

many ways. This was well recognized by Toyota in order to reduce its costs towards

wastage. Toyota Production System has taken many years to establish it-self by

continuous rigorous improvements. The main motive behind its success is to generate

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more profit through cost reduction. This also means producing vehicles and delivering it

to customers quickly and efficiently.

The concept of cost does not confine only to production cost in Toyota Production

System. It has a broader context, so in Toyota Production System, cost also refers to sales

costs, administrative costs, capital costs, etc.

In manufacturing workplace like Toyota, the principle of Toyota Production

System is to reduce costs by simply removing waste. Normally, there are four kinds of

waste found in manufacturing production operations:

1. Excessive Production Resources

2. Overproduction

3. Excessive Inventory

4. Unnecessary Capital Investment

Firstly, Excessive Production Resources waste can be found in most of the

manufacturing workplaces. It basically comprises of excessive man labor, excessive

facilities and excessive inventory. If you combine these elements together and their

existence exceeds the actual requirement like people for work, equipment, materials and

products, it leads to increase in overall cash costs without adding any value. For example,

more number of people in the form of workforce will increase wages, having more

facilities will lead to depreciation costs of those facilities provided and excessive

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inventory leads to high cash outlays like capital costs and need to increase inventory

investment.

Figure 3 - Toyota Production System(Toyota Overview, 2016)

Secondly, Overproduction which is the secondary waste. In Toyota Production

System, it is regarded as the worst type of waste because it keeps on working on the

essential resources continuously, even if there is no requirement. This leads to the third

type of waste in Toyota Production System – Excessive Inventory. This leads to

requirement for more labor, equipment’s, space of keeping inventory and transport.

Lastly, above mentioned three wastes create the demand for fourth type of waste

named as Unnecessary Capital Investment. In Toyota Production System, this fourth type

of waste leads to building of warehouses to meet the requirement of keeping extra stock,

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more labor for moving stock from one warehouse to another warehouse, purchasing more

machinery like fork lift for every single transporter, hiring more inventory control

personals for new warehouses, requirement for operator to work on damaged inventory,

new processes will be required to follow in order to manage the conditions and quantities

of various types of inventory, and in the end, hiring of an individual to do the

computerized inventory for the whole new warehouse.

All the above mentioned sources of waste, give unnecessary rise to administrative

costs, depreciation costs, direct material costs, etc. Moreover, Excessive Production

Resources waste is the first one to appear in the whole cycle and also provides path to

other subsequent wastes.So it becomes essential to remove that waste as shown in Figure

3. Excessive workforce only leads to more idle time, which is also called waiting time.A

worker can be re-allocated with new job responsibilities, which results in less work force

and labor costs. In addition, the costs raised by other three wastes: Overproduction,

Excessive Inventory and Unnecessary Capital Investment, will be reduced.Such an ability

to control overproduction is the primary structure of Toyota Production System.

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 Figure 4 - Process of Waste Elimination (Monden, 2012)

Toyota Production System (Sub-Goals)

Cost reduction has been given the highest priority in Toyota Production System,

but there are another three sub-goals too, which need some lightening on it. They

areQuality Assurance, Quantity Control and lastly, Respect for Humanity.

1. Quantity Control– It allows the Toyota Production System to adapt to demand

of quantity and variety as per daily and monthly requirements.

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 2. Quality Assurance – It assures the Toyota Production System of supplying of

only good units to subsequent process.

3. Respect for Humanity – It helps in cultivating a system of respect in Toyota

Production System towards the utilization of human force to meet its cost

objectives.

Toyota Production System makes sure that proper emphasizes are given to these

three sub-goals because they cannot exists or can be achieve on their own. This also

requires influence from the primary goal of cost reduction. Moreover, it makes a special

feature of Toyota Production System that primary goal will be hard to achieve without

realization of its sub-goals and vice versa.

Toyota Production System and its Basic Concepts

After recognizing above related topics, two concepts that Toyota is able to plan and

run its production system. Firstly, recognition of efforts that are put in to reduce the

production cost by eliminating waste. This allows generating a system which thoroughly

eliminates waste on the basis of assumption that anything which exceeds the minimum

amount of required things like materials, workforce, machines, etc. essential to complete

the production task are merely excess, which will only lead to increase in cost. Secondly,

recognition of hard work of the Japanese people, working environment, workforce ability

and diligence. Allowing the workers to showcase their full potential by themselves and

giving due consideration. Also, treating their workers as human beings.

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 In order to attain such a system, Toyota has given special importance to “JIDOKA”

and “JUST-IN-TIME PRODUCTION”.

Just-in-Time System

In automotive industry, efficient production system is only possible by removal of

following three distinguished problems.

The typical automotive industry will consists of mass production assembly type,

which will involve assembly of each vehicle from several thousand parts which have also

gone through numerous processes. So removal of any obstacle in any of these processes

will keep the proper functioning of the production system. Otherwise, it may create a

huge mess in whole production system if any of these processes are having trouble.

Huge fluctuations as per the demand of a particular model. Whereas, the

production house consists of numerous types and variations in other models.

After every couple of years, the vehicle is completely remodeled. This also leads to

change of various other small and big parts to complete a particular model.

In automotive industry, the ordinary production control system allows fulfill the

schedules of production by holding work-in-progress inventory. It allows in absorbing

troubles of processes and fluctuation in demand for all the processes. On the other hand,

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such a system also creates excessive and unbalanced inventory within many processes,

which are mostly not sold at the same time.

Moreover, such a situation in production house will lead to condition of excessive

equipment’s and more than required labor, which does not match up with Toyota’s

expectation.

Just-in-time production system helps in avoiding such situations, where problems

related to unbalanced inventory and excessive equipment’s and labor are due to troubles

and demand fluctuations. In order to achieve this, all efforts are put in to develop a

production system that will reduce the lead time from the moment materials are entered

to the completion of vehicle.

Important Points in Just-in-Time

In just-in-time production method, the production lead time can be greatly reduced

with due respect to maintain the conformity to changes by making sure that – all

processes are producing only the necessary parts at the necessary time and have only

minimum stock in order to hold all the processes together.

After checking the required number of inventory quantity and production lead time,

this production system still needs to look into excessive labor and equipment’s. This also

leads to initiating the second most important concept of Toyota Production System,

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which leads to maximum usage of labors potential. As per the above, following points are

to be implemented in the production system: n

1. Withdrawal by Subsequent Processes:

The first and the foremost important part of just-in-time production, to gather

accurate knowledge related to timing and quantity required. Normally, every production

system, but in case of Toyota Production System, follows the production schedule of a

particular product in automotive plant which is based on the various parts schedules and

instructions given to all the processes.

The production of these parts as per their schedule, lead to the implementation of

preceding process of supplying the parts to its subsequent process. But this process could

only make it worse and difficult to adapt the constant changes to meet the production

targets. On the other hand, Toyota adopted the opposite of preceding process of

supplying the parts to its subsequent process.

In just-in-time production, parts are being produced as per various processes in the

exact required numbers and exact timeline for completing the assembly of a vehicle,

which is regarded as the final product of Toyota. In such a scenario, it won’t be wrong to

say that the final assembly line will be able to judge the number of parts it requires and

how much time it will take to finish the vehicle.

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 After connecting the above discussed processes and put into the chain fashion

process, it would be right to say that whole production process of the company is engaged

in just-in-time production without making unnecessary bulky production orders.

2. One Piece Production and Conveyance:

This is the second important part of just-in-time production. In this, all the

processes must be able to fulfill the criteria of producing one part in their respective

process, so that, they are only left with one piece as stock and the other part is moved to

subsequent production processes to complete the vehicle.

Therefore, no process in the production is allowed to produce more number of parts

and maintain surplus inventory between the processes. So it was necessary to understand

this by every process and keep their approach in such a way, that it only produces and

conveys a single piece of unit for the final assemble line. All in all, it meant no lot

production and no lot conveyance.

Reduction of lot size by shortening the setup time, leads to improvement in

production methods which also includes the elimination of inventory within the processes.

By following this, it results in ordering of multipurpose vehicle equipment adhering to

processing requirements for a single product line. Toyota successfully carried out all of

these with its Toyota Production System and also with its large number of

sub-contractors.

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 3. Levelling of Production:

To meet the requirements of this important point in just-in-time production, all the

processes must have small lot of production and conveyance. If the situation arises and

the huge quantity for the following processes is withdrawn. This will lead to have

excessive stock within the company and with sub-contractors all the time. To make

just-in-time succeed, priority should be given tofinal assembly line, so that it can level the

production.

Figure 5 - Heijunka - Levelling the Flow(Toyota Overview, 2016)

To meet the requirements of levelling of production in just-in-time, assistance from

managerial positions is very much required. Firstly, the final assembly lines at Toyota are

mixed product lines. Furthermore, the production per day is calculated by the average

number of vehicles produced in the monthly schedule divided by the number of working

days. Secondly, calculating the cycle time of different vehicles on daily basis in the

production sequence, so that all the different vehicles appear according to their own cycle

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time. Once the assembly line levels up with production, then the production of process of

withdrawal and once piece production and conveyance are also leveled.

Another important point of levelled production is to satisfy the basic rule of

just-in-time production, that is, to produce what is required to be sold without exceeding

the limit. It also needs to adjust its production level as per the market changes and is able

to produce as smoothly as possible. Once the monthly schedule for production is rolled

out, Toyota still keeps on making the changes for different vehicles on daily basis orders.

If the market situation changes, it will force Toyota to make further changes for monthly

schedules, so that Toyota is able to lower down the drastic changes in demand.

Therefore, when the above mentioned production system is compared to general

schedule production system, it will be easier to operate with former system with minimal

changes to production than the latter system. Hence, it will allow in completing the task

with less equipment’s and more stable numbers. Practicing the above three general rules

in production control system is called KANBAN SYSTEM.

4. Elimination of Waste from Over-Production:

Derecognizing the value of existing inventory is the most essential part of

just-in-time production system. As per the classical production control system,

availability of inventory is very much appreciated in order to combat the troubles and

fluctuations of demand, and to smoothen the fluctuations in load of processes.

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 Whereas, Toyota sees this stock on hand, leading to collection of troubles and bad

causes. Most of the unwanted stock on hand is caused by over-producing the particular

item than the required amount, which is considered as the worst waste in Toyota

Production System, leading to overall increase in the production cost.

There is a reason behind for terming over-producing as the worst waste in Toyota

Production System because it hides away the actual causes of waste like trouble in

various processes, unbalanced between the workers allotted to a particular process,

workers being idle, excessive labor, insufficient preventive maintenance, etc. Now this

prospect of waste makes it harder for employees to display their actual potential and also

leads to hamper the overall growth of the company.

Jidoka

The term “JIDOKA” means application of automation with the essence of human

touch to it. Toyota used it in equipment’s or operations, which allowed them to stop the

whole production process if they found any defect in the relevant process. It can also be

described as a distinctive feature, which leads to stoppage of equipment or entire line, if

there is a defect found in it.

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 Figure 6 - Andon Board (Toyota Overview, 2016)

Features of Jidoka

The reasons “JIDOKA” being an important feature of Toyota Production System

are as follows:

1. It helps in Preventing Over-Production:

Once the equipment has achieved the desired target for number of amount, it stops.

Thus, reducing the over-production waste. Moreover, it carries out the just-in-time

production without any errors.

2. It also helps in controlling any sort of abnormality:

It will allow the production system to look into the defect founded by the worker in

the equipment or an item. It also makes the other processes aware about the situation as

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well. This leads to full utilization of worker’s capabilities and is also considered as the

important aspect when making up the system.

Emphasizes of Jidoka in Toyota Production System

Toyota Production System has made number of improvements to apply “JIDOKA”

in their production system. Toyota also emphasizes on its workers capabilities and its full

utilization. Toyota also has a concept, which allows it to utilize the full potential of

Japan’s favorable working environment and hardworking workers. Toyota has also

created a built up system for the respect for human workers. Following points are

emphasized:

1. Elimination of Waste Movement by Worker’s:

Hardworking workers in the organization can help in raising the awareness of their

work being worthy only if they add some value to the products. Workers movement in

the working space is also considered as waste. This is mainly due to movement of

materials from one place to another in the operations. It is mostly caused by large

inventories. Toyota is now able to effect large reductions in this kind of waste with the

thorough application of just-in-time production.

However, this will help in reducing too much waste. Due to this, it will do no good

to workers and the production system, if their waiting time is increased. Production

system should avoid the situation where workers and equipment are tied to each other. It

29
will only increase the idleness of the workers in the production system and to avoid

creating such scenarios in the production system, following changes are been made by

Toyota:

 Keeping labor occupied to multiple machines instead of attaching him to single

equipment.

 Workers concentration level is also checked in such situations. The worker has

to concentrate on certain parts of the equipment for producing acceptable items

without any faults.

 Lastly, creating such lines in the production system which requires minimum

supervisory.

Workers sometimes perform such a waste in operations system which is not

required by the other workers. These are waste in operations involving the physical

danger, operations which are injurious to health, requiring hard physical labor, etc.

Moreover, waste in workers movements which results in troubles of defect. Toyota is

largely able to benefit from this kind of wastes through the application of “JIDOKA”.

2. Considerations to Worker’s Safety:

Workers at Toyota are very hard working and are very enthusiastic for attaining the

production target. This allows the workers to continue his work, even if there is a

problem detected in operations has no serious issue to the production system working.

The worker will end up taking a non-standard method, so that the line keeps on running.

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However, such unwanted operations or extra work arises due to accidents, defects,

malfunctioning or troubles.

Toyota has advanced it production system through the application of “JIDOKA”

and elimination of waiting time to such an extent, that not only it helps in reducing the

overall production cost, but it has also emerged as effective way of measure of safety for

workers.

3. Self-Display of Worker’s Ability:

Nowadays, respecting the humanity of workers in most of the production shops are

gaining the international interest. Toyota believes in creating an environment of the

highest order that would be the foundation of human respect. Toyota also believes in

creating a system which allows its workers to showcase their potential through active

participation.

Working towards the step in this method, as mentioned above, Toyota has given

the rights to all his workers, to stop the line on which they are performing their work.

Regardless of the length of line, like in final assembly, they are entitled to stop it if they

found any issues. Not only issues or errors, if the worker is not able to keep up or finds a

defect, he can stop the entire assembly line by simply clicking on the stop button. In order

to respect the human independence, it’s not the conveyer belt that is operating the human

worker, while it’s the human worker who is operating the conveyer.

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 Secondly, workers at all Toyota shops are well informed about the priority order.

This allows the workers to process those parts first which belong to the priority list and

also leads Toyota Production System into state of production advancement. Moreover, it

allows workers at each Toyota shop to follow his daily routinework without taking any

orders from the control department. It’s the responsibility of foremen in all Toyota shops

to authorize the decisions for job dispatching and overtime.

Toyota has also introduced a system in all the Toyota shops, which allows all the

workers to contribute towards the improvement in the system. Even a single employee at

Toyota, who found the waste, is entitled to use his right to remove that waste he has

found from the system.

In the just-in-time production system, necessity to improve the system can easily

be understood by all those working in the system. If all processes and shops are kept just

like that without any monitoring and there is no excess to be worried about, but if the

trouble part is left unmonitored, it will shut down the whole line automatically and will

further affect the entire plant.

Therefore, Toyota is making an effort to create a working place where all workers

can detect trouble. It will no more be the managers and foremen detecting the trouble, but

as a production system, its responsibility of every individual working in the Toyota

Production System. The above mentioned is also known as “visible control”. By

implementing such control in the working system, all workers in the Toyota Production

32
System have taken positive actions to remove the unwanted waste. This gave the

delegation to exercise its control and accountabilityfor operating and constantly making

things better for the workers in the workshops.

Kanban System

Kanban system is a production control system which allows workers to fully utilize

their capabilities using the just-in-time production system. Thanks to Kanban system

efficiency, all Toyota workshops are in no longer in need of an electronic computer.

There can be various reasons for applying Kanban System as compared to

electronic system. Following are few important reasons which justify it:

1. Reduction in Cost Processing Information:

By adding electronic system, it will require a huge cost to implement such a system,

which gives you the real time control of production schedules for all the processes and

suppliers.

2. Rapid and Precise Acquisition of Facts:

Managers working in the Toyota workshops believed in the Kanban System

because it continuously provided the real-time facts on various things like man power,

production capacity, and operating rate. Moreover, the data collected corresponding to

the change was accurate enough to make managers and workers to further improve the

promotional activities and responsibility.

33
 3. Limiting the Excess Capacity of Preceding Shops:

Since Toyota being an automotive industry, it will have many multistage processes

where demand for a particular item will gradually become more regular. This allows the

preceding processes to have more items in excess capacity. Hence, it will lead to waste of

over-producing.

Kanban system is also considered as a tool to achieve the just-in-time production

system. The normal appearance of it is just like another card which is kept inside a

rectangular vinyl envelope attached to the item. Normally, there are two versions of

Kanban that are mainly used: a withdrawal Kanban and a production-ordering Kanban. A

Withdrawal Kanban specifies the kind and quantity of product which the subsequent

process should withdraw from the preceding process. Whereas, Production-Ordering

Kanban specifies the kind and quantity of product which the preceding process must

produce. The production-ordering Kanban is often called as in-process Kanban or simply

a production Kanban(Monden, 2012).

We define Kanban scheduling as demand scheduling. In processes controlled by

Kanbans, the operators produce products based on usage rather than forecasted

usage(Mclnnis & Gross, 2003). Therefore, for a scheduling process to be considered a

true Kanban, the production process it controls must:

 Only produce product to replace the product consumed by its customer’s.

 Only produce product based on the signal sent by its customer’s.

34
Description of Kanban System

In Kanban System, a form of order card is called Kanban(Sugimori, Kusunoki, Cho,

& Uchikawa, 2007). Normally, there are two versions of Kanban. The first one is called

“conveyance Kanban” which deals in going from one process to preceding process. And

the second one is called “production Kanban” which is used only for order production

purposes by simply withdrawing through subsequent process. Both versions of Kanban –

Conveyance and Production are always attached to the boxes of the parts required by the

processes.

Figure 7 - Kanban Card(Toyota Overview, 2016)

35
 When the worker wants to use the content of a box or container, he simply removes

the conveyance Kanban from the container or box. A worker than takes this conveyance

Kanban to the stock point of preceding process to collect his required part. The worker

will simply attach his conveyance Kanban to the box which will consist of his completed

part.

Once the box or container is received by the production process, they remove the

conveyance Kanban and replace it with production Kanban. After this, the production

Kanban is removed from the box or container and is sent directly to dispatching process.

Hence, the production activities of the final assembly line are all inter-connected,

just like a chain, which contributes largely to just-in-time production system of the entire

process which alter on goes through preceding processes or to sub-contractors and then

materialize.

Finally, when all the parts are assembled and processed in vehicle, it increases the

overall value of the product. Gradually, one by one all the vehicles are rolled out from the

workshops. If any trouble is found, it will stop the whole line straight away, but

immediately it will start and rolling out the vehicles.

Toyota Production System is a kind of a set-up which helps in creating the

awareness of such an ideal conveyor line system for businesses around the world and

Kanban system also contributes in this conveyor by simply connecting all the processes.

36
Rules of Kanban

If you have better tools, it increases your chances of being more effective. But, if

you use them in wrong way, it will decrease your chances of reaching your goals and will

defeat the purpose for which they were created.

Same goes for Kanban system as well because it’s a tool created to manage the

workplace effectively. Following is the explanation of rules of Kanban system in order to

achieve the desired effectiveness:

1. Never Send Defective Items to the Subsequent Process:

If you generate an item which involves investing your time as labor, using the

equipment’s and materials for generating a defective item which cannot be sold, leads to

the greatest waste of all. Moreover, it will be labeled as the worst offense towards the

cost reduction for any organization. If you come across any defective product, preventive

measures are required to be taken straight away so that it doesn’t repeat itself. The above

explanation simply means that you need to avoid sending defective products to next

process at any cost. It is important to raise the awareness of such defective product to

every individual working in the process. If the awareness is not created, it may lead to

pile up of defective products, which will lead to stoppage of the entire process. In order to

abide by this rule successfully, the machines should be able to stop the production

automatically when they encounter defective product. This also highlights the automation

with a human touch.

37
 2. The Subsequent Process Comes to Withdraw Only What is Needed:

The second rule simply states that the subsequent process will let know the

preceding process about the withdrawal of parts as well as materials in a given period of

time and required quantity. It will lead to generating of loss if subsequent process

receives the parts and materials from preceding process at the time it doesn’t need them

or it exceeds the quantity as per the needs. Moreover, if proper application of this rule is

not done, the losses can be incurred from anywhere within process like loss from excess

of overtime, loss from high inventory and losses incurred from investing new facilities

without knowing that the existing facility is actually sufficient.

3. Produce Only the Exact Quantity Withdrawn by the Subsequent Process:

The third rule is guided by producing only the quantity withdrawn by the later

process; it is somewhat loosely inferred from the second rule. It is based on the absolute

condition that the process must restrict its stock to the absolute minimum. To adhere to

the above policy the following things should be taken into consideration-

 Do not produce more than the number of Kanban

 Produce in the order in which the Kanban is received

Observing the above rules or operational guidelines will help in functionally

applying the third rule. It is also important to keep in mind that the second and the third

38
rule goes hand in hand, which leads to the formation of unison and simultaneity in the

production process.

4. Equalize Production:

In order to ensure the successful continuation and implementation of the third rule,

it becomes important for all processes to maintain equipment and workers in a way that

materials can be produced when needed and in the amount needed.

In the above situation, even if the later process comes to withdraw materials

unevenly in terms of quantity and time, the first process will get enough time to arrange

extra personnel and facilities to accommodate request of the later process. The end result

shows that the earlier process stands in the total production system, the greater the need

for excess capacity emerges.

In normal cases the preceding process has no excess capacity at all, it may not be

able to meet the requirements of the later process, and can only manage to deal with their

requirements by producing materials ahead of time whenever they have enough capacity

and time. Doing this is a clear violation of the rules. In order to avoid the above situation

to arise the technique of Load smoothing (equalizing) in production comes in handy.

5. Kanban is a Means to Fine Tuning:

The core function of Kanban is described as an automatic directional device

consisting detail and information for the ease of workers concerning their work order(Lu,

1989). When the Kanban is brought into play we can distribute the info. Initially with the

startup plan chart and the transportation plan chart which are provided for the workplace.

39
For workers it becomes a vital source of information for the production and

transportation of work order.

There are two kinds of Kanban which are withdrawal and production- ordering

Kanban. The withdrawal Kanban specifies the kind and the quality of the product which

the later process should withdraw from the first process, whereas the production ordering

Kanban specifies the kind and quantity of product which the later process must produce.

6. Stabilize and Rationalize the Process:

The sixth rule emphasizes on the fact of stabilizing and rationalizing the production

process which is not possible with merely load smoothing or Jidoka. In order to stop the

production of defective parts the company needs to go into the root cause of defects.

Defective work exists because of the presence of 3M’s in the work methods and work

hours. This 3M’s that are Muda (waste), Mura (unevenness) and Muri (unreasonableness)

in the work methods need to be addressed in order to ensure smooth supply and

inexpensive production of goods.

40
 CHAPTER – 3

Case Studies

Case Study – I: AISIN Seiki Fire (1997)

Background

Aisin Seiki Co., Ltd. is a Japanese corporation in the automotive industry which

deals in development and producing the automobile systems and components. It was

established on August 31, 1965. Its Head Office is located in Aichi, Japan. It has a

employee strength of 99,389 (as of March 31, 2016). AISIN Group currently deals in

three business lines as mentioned below:

Manufacture and Sales of Automotive Parts: Adhering to the principle of “Quality

First”, the AISIN Group provides high quality automobile parts which are very essential

towards the completion of a vehicle like brake system, chassis, body, engine and

information technology.

Lifestyle and Energy: AISIN Group is also related with the lifestyle products that

help in contributing towards more comfortable living environment, energy-related

products that maximum efficiency and minimum resource consumption.

41
 Wellness: AISIN Group offers welfare-related equipment’s which ultimately help

senior citizens in leading fulfilling lives which includes. Most of its equipment’s are

based as per the ergonomic principles.

Disruption in Supplies of P-valves to Toyota – AISIN FIRE (1997)

AISIN Seiki is a major and trusted supplier of automobile components to Toyota.

During 1990’s, Toyota was largely depended upon AISIN Seiki for its proportioning

valves; also known as P-valves, used in Toyota vehicles for break-related part.

On February 1, 1997, a fire erupted at one of the AISIN Kariya plant number 1.

This leads to halt in Toyota Group operations for couple of weeks. Both Toyota and

AISIN Seiki were dedicated towards the principles of just-in-time production, which

allowed both of them to have a stock of two or maximum three days available. A Toyota

plant at that time was in full capacity which had a lot of temporary workers. Everyday

lost was potentially huge in financial losses in sales and profits for Toyota.

P-valves control the pressure on rear brakes which helps in preventing skidding. It

was no bigger than a pack of cigarettes. It was produced in mass quantity using the

dedicated transfer lines, which helps in lowering down the costs and resulting in higher

productivity and reliability. AISIN Seiki was the only sole supplier at that time in Japan

of such a part.

42
 Toyota on February 3, 1997, suddenly found itself in deep trouble. It forced,

Toyota shut-down its 20 lines out of 30 lines. February 4 and February 5, both days the

Toyota plants and its related firms were shutdown.

Toyota’s Tahara and Hino’s Hamura plants were reopened on February 6. It was

the delivery of first alternative to P-valves which lead to stabilizing the whole crisis. By

February 6, all Toyota plants were back to normal. But the number of P-valves produced

by AISIN Seiki was less than 10% as compared to actual demand. Although, it gradually

increased, but it took more than a month to reach 60% by March 14 and 100% by the end

of March.

The overall cost to AISIN Seiki was 7.8 billion yen and Toyota was around 160

billion yen in revenues. Toyota was able to lower down the losses amounting between

20-30 billion yen by recouping through increased production through overtime and

holiday shifts.

Outcome

It was very difficult to meet the target of 32,500 P-valves per day. Then six firms

jointly took up the initiative, they were Toyota, Koritsu Sangyo,AISIN Seiki, Kayaba

Industry, Taiho Kogyo and Denso. They were very different in respect to position in

value chain, specialization, and size. But all these firms had same characteristics of

commitment, capabilities, Just-in-time production and problem solving ability.

43
 All the firms from outside and within Toyota Group set up another P-valve

production site. AISIN Seiki on the other hand respected this initiative and provides the

design drawings, jigs, technical specifications, machine tools, and raw materials which

were salvaged from the fire.

Another 62 firms also responded to AISIN Seiki call and immediately began the

preparations for manufacturing. Around 150 more firms joined including 70 machine-tool

makers. AISIN Seiki gathered all machines through exhibitions, showrooms and readily

available near the plant.

Many firms were requested to produce necessary parts required by looking into the

drawings of design models and forged blocks. They were also responsible for delivering

them back to AISIN Seiki for final assembly. Moreover, AISIN Seiki was also

responsible for quality control check and delivery to all firms including Toyota.

Many firms cross checked their production with the design drawings, equipment’s

and technical specifications and every firm had to confirm AISIN Seiki about their

participation in the recovery effort. It was difficult for all the firms because they never

produced P-valves and also had less knowledge.

It was very difficult for AISIN Seiki to transfer the knowledge and technical

equipment’s to every firm. Due to this, many firms left the initiative due to lack of

machinery and know-how. Toyota instructed its Honsha plant site for producing P-valve.

44
Once the prototypes from various firms were approved by AISIN Seiki, every firm

started producing large number of volumes.

Once the major problems were handled, the firms picked up speed in production of

P-valves. All firms, including Toyota,started working towards shortening set up times.

Resuming to full just-in-time production shows Toyota Production System is integrated

into these firms working in depth.

These examples showcase the successful outcome of the P-valve recovery effort,

which involved many measures taken to set-up alternate sites. Flow of employees from

one site to another for providing technical solutions and drills were performed constantly.

Summary of the Study

AISIN Seiki fire incident showcases the benefits of Toyota and its partner firms for

self-organized, response in crisis and routine problem solving. Many known practices

like just-in-time system and proper application of Kanban and Jidoka system helped in

finding the defective products and solving the relevant problem before it got too late.

It can also confirm that these practices are very essential part of Toyota and it will

help Toyota only reaching new heights. Moreover, managers and workers learned and

inherited capabilities for effective problem solving skills. Furthermore, the AISIN Seiki

fire incident also confirms that just-in-time system is not vulnerable to small disruptions.

45
 Case Study – II: Niigata Earthquake (2007)

Background

RIKEN is a 100 years old research organization. It is the largest research

organization in Japan. RIKEN has world-class research centers over whole Japan. Its

main research center is in Wako, Japan. Since 1917, RIKEN has mastered itself in the

fields of natural sciences, biology, neuroscience, quantum physics and computer science.

RIKEN also deals in automotive and machinery parts like Piston rings, camshafts,

seal rings, brake parts, valve seats and lifters, and parts for suspension systems and

steering systems.

RIKEN has also indulged itself in other products and services like EMC products

dealing in radio frequency, shield rooms. Moreover, it has also got into thermal

engineering products like industrial furnaces and electric heating materials.

Disruption in Supplies of Piston Rings to Toyota – Niigata Earthquake

(2007)

In 2007, if you wanted to buy a piston ring from RIKEN would only cost you

around 1,500 yen in the market. But due to its lack of availability during the Niigata

earthquake, it paralyzed the whole automobile production sector in Japan for a week.

46
 On July 16, 2007, Central Japan was struck with a massive earthquake of 6.8

Richter scale. It damaged the most of the plants in RIKEN, who supplies piston rings for

most of the major car makers in Japan like Toyota, Honda, Mazda, and Mitsubishi. Due

to non-availability of piston rings which are specifically designed as per the car model,

closure of plants was the next step because all the Japanese firms follow the philosophy

of just-in-time production system. All the car makers were left with low stock of

available piston rings.

In 2007, RIKEN with a market share of more than 50%, employee strength of

1,500 and revenue of more than 600 million dollars, made huge impact on the industry.

RIKEN also maintained its reputation for quality in products and relationships with major

car brands in Japan.

Due to closure of RIKEN, it also forced many car makers to cease its cars

production. Toyota, the No.1 car maker, closed all of its 12 domestic plants for at least

couple of days, which lead to overall loss of more than 20,000 vehicles and more than

55% of it were made for export purpose. Honda was also forced to close that plant which

produced well known Fiat and Civic models. Nissan also felt the heat of non-availability

of piston rings, leading to closure of its all four plants too. Mitsubishi, Mazda and Suzuki

also joined the rest by either slowing down the production or completely shutting down.

This sudden blow to the automotive industry came swiftly and no one had an idea

of impact it will leave to U.S production segment of Japanese cars. Toyota also

47
confirmed that such a disaster was a big worry, “In the case of special parts like piston

rings, there is no back up” a company spokesperson made this statement(Chozick, 2007).

RIKEN was a crowned king in piston ring market since 1940s. Two of its plants

and nine facilities were hugely affected by the earthquake. A week later after the

earthquake, RIKEN confirmed that it will start resuming its production for piston rings.

RIKEN further emphasized that it will need at least another week to reach its full

potential in production.

Outcome

It was really hard to come out of such situation, where your enemy is nature and

you cannot fight or control the laws of nature. Similarly, RIKEN was also in spot of

bother due to natural disaster.

Toyota, Mitsubishi and other firms came as one force to help RIKEN to get back to

normal operations. Around 500 employees from Toyota and 650 from other companies

were sent to resume the production at the disaster site. Kashiwazaki plant, piston rings

main plant for RIKEN, was restored on July 23 and Toyota also resumed its operations

on the same day. The other car makers resumed to normal operation on July 25.

48
Summary of the Study

RIKEN Piston Rings was a crucial part required to complete the vehicle. But due to

the natural disaster occurrence and non-availability of piston rings, it halted the whole

Japanese auto production industry. As it has happened in the past, once more Japanese

firms collectively come together to support RIKEN in best possible way to restart much

more quickly than it would have been able to on its own.

This natural disaster scenario raised many questions and exposed vulnerabilities in

Toyota Production System, Just-in-time system philosophy, Jidokaand Kanban system,

for keeping little and only required level of inventory to work. By now, we know that

just-in-time system allows keeping the production cost low and gives high quality

products. But in addition to specialization, “Just-in-Time” had stopped productions of

automobile in Japan. And to some extent, Jidoka, which means stopping immediately if

there is any defect or problem encountered in production, also led to shut-down.

After the disaster restoration, RIKEN planned to open production plants across

whole Japan. Moreover, keeping in mind the future disasters, RIKEN has initiated to at

least a week’s inventory nearby its customers factories.

49
 Case Study – III: Kumamoto Earthquake (2016)

Disruption in Supplies from AISIN Seiki to Toyota – Kumamoto

Earthquake (2016)

Couple of earthquakes in April, 2016, rattled Toyota and many other car makers.

Earthquake measuring to 6.5 and 7.3 on Richter scale struck Kumamoto city in Japan,

leaving more than 30 people dead and causing disruption to many crucial supplies.

Toyota again had to shut down more than 20 vehicle assembly lines across the

whole Japan. The main reason behind this move from Toyota was due to AISIN Seiki as

a supplier, was not able to provide with the supplies like doors and engine components

from its Kumamoto plant.

It’s twice in three months that Toyota was forced to stop production due to supplier

troubles. In February, 2016, due to explosion in one of the steel plants of Toyota’s

supplier, Aichi Steel Corp., productions lost numbers were as high as 90,000 vehicles.

The steel plant shutdown hampered the entire industrial output for supplies related to

engine, transmission and chassis components.

Toyota’s operational profits were reduced by 30 billion yen in the first quarter of

2016. It was quite evident from such a big loss, which will leave its impact on the second

and third quarter too. Toyota’s shares plumbed down by 25% this year only.

50
Summary of the Study

These shutdowns mainly occur due to Toyota’s famous and world-wide adopted

policy of just-in-time system philosophy. Toyota resumes production by April 25, 2016,

which is a week later from the first earthquake struck in Kumamoto City, Japan.

AISIN Seiki moved its production to other plants in Japan and overseas to meet it

consumers demand and get over from this halt as early as possible. But it couldn’t wash

away the vulnerabilities shown by the famous just-in-time system. Many online portals

are criticizing the Toyota’s most valued system, but no matter how many preparations

you do or infuse new systems, any natural disaster will tear it down.

51
 CHAPTER – 4

Conclusion

This report has helped us understand properly all about Toyota Production System

andmore importantly its core elements “Kanban” and “Jidoka” systems. Also with the

help of cases discussed in this report, it reveals that the multiple shutdowndecisions were

due to influence from either Just-in-Time or Jidoka system. But in the end, the decisions

taken at the right time for closure of production lines were not wrong.

Moreover, as per the initial hypothesis and objective set out for this report, it

clearly makes sense that, there are some limitations for Just-in-Time system only due to

disruptions in supply of small but crucial parts from its suppliers required for the

production during severe disaster situations. Otherwise, Toyota Production System has

not encountered many such incidents which directly pose a threat to the existence of

Just-in-Time System in Toyota and other manufacturing firms in Japan.

Most of the time, Toyota has suffered a lot due to these shortages from its supplier.

But no one is to be blamed for it because most of the shortage occurrences were due to

natural disasters or unforeseen events. Japan is located on one of the most active seismic

plates of earth crust. So it will naturally make it prone to such disaster events across

Japan. This has also given a spark by respected scholars in Japan and across the globe,

why Toyota is not making any efforts to combat such situations for future and secondly,

it should move towards other production systems.

52
 Toyota’s Just-in-Time system, Jidoka and Kanban system are very well known

across the globe because Toyota showed huge success in most of its production

department. Since 1950’s, Toyota has been using Toyota Production System and it has

made it better and better over the time. It will be wrong to say usage of such old system

shall be abolished and replaced with something else, just because it only proves it’s

insufficiency during unforeseen disasters.

Moreover, in 1997, when AISIN Seiki plant caught fire, it was Toyota’s production

methods which helped AISIN Seiki to recover sooner because most of the firms, who

lend their hand for help, were aware about the Toyota Production System, Just-in-Time,

Jidoka and Kanban System. This further allowed getting it perfected as per the

requirements sooner than expected.

Same thing happened during Niigata earthquake in 2007, but there was no

alternative for the RIKEN Piston Rings at that time, which lead to stoppage of all the

assembly lines in Toyota. Furthermore, during Kumamoto city earthquake in 2016, it

again faced the same back-clash against its prestigious production system and leads to

halt of 20 assembly lines in production across Japan.

Toyota used and still uses day-to-day supplies as per just-in-time system in all the

above cases. Toyota has more faith in long term benefits of quality, learning, efficiency

and low cost of production, so that it can have bigger impacts than the risks of rare

53
disruption. But one should consider that increasing production costs for the sake of

increase in inventory, during natural disasters, only to meet the demanding requirements

lacks a rational explanation.

Interestingly, Toyota has looked into inventory system and adjusted accordingly

when it comes to forecasted events. For instance, Toyota’s plants across Toyota city have

gathered long stockpile of parts during its winter season for west of Seki-Ga-Hara,

Japan.Moreover, Toyota has emphasized more on multiple suppliers are able to

manufacture the same part.

After observing such changes in Toyota, experts and scholars are saying that

Toyota will now be able to recover sooner than expected from any natural disaster

occurrence in future as compared to past. But said that, it will still pose a challenge to

bring the necessary parts or equipment’s, if the highways are closed and restrictions are

put in for earthquake affected zones.

Takaki Nakanishi, an auto analyst who runs his own research firm in Tokyo, said

“They can’t simply switch production from one site to another immediately. It’s not a

flaw in Toyota’s Production System. It’s that Japan’s manufacturing is built on a land

that is prone to earthquakes” (Kubota, 2016).

54
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