LEAN AND RESILIENT
In 2011, when the unthinkable happened – the Fukushima tsunami and nuclear meltdown in Japan – the global automotive industry was already busy recovering from the U.S. financial crisis, dealing with a European market hobbled by the Eurozone debt crisis, and scrambling to meet demand in markets which are growing exponentially, like China and India.
Toyota’s manufacturing was affected by the compound disaster in Japan. But some of its suppliers, including Renesas, were devastated. Renesas, explains Andrew Zolli, author of Resilience: Why Things Bounce Back, makes about 40 percent of the chip controllers that power today’s new cars. It had a just-in-time delivery mechanism, where it delivered chips to the Toyota supply chain with a six-minute gap.
But at the time, Renesas only made the chips in one factory in Japan. And when that factory was decimated, manufacturing for Toyota shut down immediately all over the world. Toyota literally couldn’t get its hands on the processing chips to run its new cars.