Supply Chain challenges in Post-Earthquake Japan
Japan has for a long time been known as the major source of the automotive product in the world. It holds four major automotive manufacturing plants in the world. These companies include Toyota, Mazda, Nissan and Honda. In this regard, the March 2011 earthquake that took place in Japan affected the world automotive industry a great deal. The world experienced shortage of automotive products for about six months after the earthquake, with companies such as Honda, Mazda and Toyota which were following lean production principles to the letter experiencing the greatest impact. This paper focuses on analyzing the effect of earthquake on the Toyota supply chain, and the consistency of the new Toyota measure with lean production principle. The paper also evaluates how the new Toyota plan may impact the company’s relation management in the supply chain.
Disadvantages and Advantage of Supply Chain System Used before the Earthquake
Before the 2011 March earthquake, Japanese auto companies were using a supply chain system that adhered to lean production principles. One of the observed Lean production guiding principle was that to maintain parts of inventories as low as possible. One of the major advantages of using this principle was that the companies managed a small error margin in case of supply interruption. Lean production also reduces fixed overhead cost. It also lowers operational costs, and thus playing a major part in boosting company’s restoration and increasing the company’s competitive advantage. Lean production is also believed to lower the time of manufacturing. Moreover it tries to eradicate waste space and thus, the Japan auto industry enjoyed all these benefits that are associated with lean production principles (Shpak, 2015).
One of the major disadvantages of employing the lean production principle is that the company does not have enough in store to assist it to keep on running in case of any interruption in the manufacturing process. Other disadvantages include the fact that in lean production the company has to be in a constant training of its workers to ensure continue adhering into the lean production principle. The leaders also have to remain committed to the lean production principles throughout to be able to enjoy the lean production principles advantages (Shah & Ward, 2007).
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