Impact of Jit in Aisin Seiki Crisis

Topics: Toyota, Supply chain management, Supply chain Pages: 2 (600 words) Published: March 16, 2013
What kind of impact has the JIT system played in the Aisin Seiki crisis (Toyota)? Due to the just in time stock keeping philosophy of the Toyota Production System, Toyota and Aisin had only about one days’ worth of P-valves stock on hand, with Aisin Seiki as the sole supplier. It became the main cause of a disaster, when the fire burned down the Kariya plant No 1, disrupted the supplies of the P-valves. If the problem was not handled carefully, the shutdown of the Toyota-group plant would be unavoidable. The circumstances that it might be causing are: Toyota and related firms would suffer great loss of sales and profit; tiered suppliers of Toyota group would have to wait for their reopening of plant to resume deliveries, then indirectly affecting the local electricity, gas and transportation company (or we should call it as the entire network). It would then became like a ‘snowball’ effect, first affecting this network, then the industry, further then, the other industries, last but not least, the nation’s or even world economic. However, application of just in time also has its positive side of impacts in the crisis. First, JIT is a key mechanism, allowing Toyota to make its supply chain management efficient and highly adaptable to rapid change within its operational environment. Toyota’s JIT system requires close and careful coordination and cooperation of micro-operations supported by the Kanban system, a plate-based demand-supply coordination system originally invented by Toyota and now further assisted by a highly sophisticated computer network. JIT operations in the Toyota supply network hold the ability to develop the functional capabilities, which are required to perform specific tasks and achieve specific targets in day-to-day operations, and the relational capabilities, which make it easier to collaborate with customers and suppliers. JIT institutionalizes cooperation among units to achieve both day-to-day results (such as meeting consumer demand) and...
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