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Business crisis in the main supplicator of the Toyota
A business crisis is a situation or event that endangers the company, whether its products or service, personal, or structure, this was exactly what happened in 1997. The Aisin Fire, was a fire that marked the story. It started before dawn on February 1, 1997, at the Aisin Seiji factory, located in Japan. In this factory the P valves were produced, known as the proportional brake fluid valves, which have as its purpose: to prevent the skid which is the movement that a vehicle that is circulating is made and that consists of sliding with lateral deviation from the rear.
These are used in Toyota vehicles. The Toyota company was found in a difficult situation, because Aisin was one of its closest suppliers, due to its incredible cost, quality, its delivery record, etc. An event like this paralyzed the entire industry and its networks. Aisin was the main supplier of Toyota, they made about 80% of their articles.
At the time the incident began, they contacted Mr. Ikebuchi. Putting me in his place, it was a stressful moment and important decision -making, which were going to depend on the future of the company. An action that would have taken is to look for a company that could produce what its plant produced, and ask for an urgent rental.
Another option that would have taken, is to look for another company that made those valves and buy them, to be able to comply with what the client needs. When putting me on the president’s site, one starts thinking, why were this not prevented, because he did not have an action plan for catastrophe? But I believe those things, now, for what they developed, and they can learn from that situation.
It was estimated that production was going to be suspended for several days. To solve this crisis, the two companies gathered to be able to prepare an action plan. They got additional engineers, who worked overtime. They also came to persuade subcontractor to give priority to their company. Even a man who made sewing machines, who did not know how to make car parts, had made 500 hours man to recondition a milling machine, so that he could make 40 P valves P per day.
Surprisingly, the first usable valves were given to Toyota on February 5. Analyzing everything that happened and as acted, people trusted Toyota’s work, were loyal, in times of crisis. Loyalty and desire to be part of the Toyota family could be seen in this story, there was a time where they began to look for suppliers, these suppliers began their own career, who was going to be the first to deliver the valves to Toyota? Toyota I don’t need any foreign aid, they already have the staff, and they have their trust.
Many studies have found that the loyalty of an employee is the largest treasure that any owner of a company can have, because good results were achieved, that employee works as if it were for his own company. Another example of a loyal company, are Aisin employees. While the fire was still burning, a team gathered to evaluate the damage, call customers, and to visit the neighbors to apologize. This tells us,
Another case very similar to this was the Niigata earthquake in 2007, affection for Riken Corporation, because it interrupted the production of the piston ring, being one of the largest suppliers. A piston ring is a small work piece in an internal combustion engine, to make this piece an exact precision is needed so that it can have efficient durability.
The company had to close, and automobile manufacturers could not manufacture engines and vehicles at that time. The Toyota company had to stop its operations in the 12 plants and lost the production of more than 120.000 cars. For this case, Toyota had lived experience, they offered help, not only them, most of their customers, sent 650 people, including engineers, and the week can start their work.
The difference of these two cases, which affected the same company, in different years, is the difficulty of making its products, the valve does not have such a precise elaboration as a piston ring has. What returned the most stressful Aisin case was the case that they were working with JIT, they had a minimum volume of pieces, a reduced inventory due to Jit’s philosophy.
This philosophy seeks to produce what is necessary at the time it is needed. It succeeds if each person in the company is committed to the processes. One wonders, why does Toyota depend so much on a company? They had little inventory, they were taking a high risk, but this allowed him to work with slender production and maintain their low costs.
Is this philosophy the best? I consider that it is not on certain occasions. If you do not have an action plan for unexpected events, not having inventory will make the second biggest problem. In case you do not have those action plans, or the company does not have enough resources to prevent those events, I consider that a philosophy that must have is JIC.
In conclusion, this philosophy is previously known because: nothing must break the continuity of production, that its suppliers are chosen on the basis of price competitiveness, and by the push thrust system. The push thrust is based on sales forecast, production goes on the market. Instead, Toyota is based on the pull system.
Another issue that cannot be missing in this case is the supply chain, is the name given to all the steps involved in the preparation and distribution of a product something that we have to consider, is that all the risk strategies of The supply chain must involve contingency plans for scenarios that are probable enough to justify the cost of preparing them, but that are not expensive enough to justify an expensive redundancy policy Haresh Gurnani.
Every project has its risks that cause economic losses, if for example there is an increase in material costs, a contingency fund, or external suppliers must be had. This event taught many things to the world and toyota, it was a horrible situation, but it can take advantage of it, one of its decisions was to reduce the preference in its products, you can make the production easier, and reduce the risks. They were able to get out of that moment of crisis, due to their fame, their loyal employees, their suppliers, and the companies that gave her a friend.