disaster management and jit of automobile supply...

新潟国際情報大学情報文化学部紀要

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Abstract

The2011TohokuEarthquakewashugedamagetoJapan,especially,alongthecoastsof

Miyagi, Iwate, and Fukushima. There was catastrophic damage by tsunami created by this

earthquake.JapanfrequentlyhasbeenaffectedbystrongearthquakebeforeTohokuEarthquake.

Much has been emphasized about the impacts of human and physical visible damages since

disastersstruckandtherearealotofstudiesaboutdisasterintermsofseismology,meteorology,

geology, structuralmechanics, etc. But, the invisible damages, such as supply chain network,

productionsystemhasbeenobstructed,notrevealed.Inspiteofourexperiencesinhugedisasters,

wehavenʼttriedtounveiltheseinvisibledamages.Infact,theautomobileindustriesalsosuffered

agreatlossduetothisdisaster.Suppliesofassemblies/productsfromJapanhadstopped,and

interruptedotherproductionactivitiesintheworld.

Inordertounveilinvisibledamages,thispaperdescribestheaffectstothesupplychain

network,productionsysteminJapaneseautomobilemanufacturersbytwodisasters-the2011

TohokuEarthquakeandthe2007NiigataChuetsu-offshoreEarthquake-. Inaddition, tounveil

fundamental issues of their damages, there are the research questions; “Why did automobile

manufacturersimmediatelydecideallassemblyplantsʼshutdown”,“Whatʼsthedifferenceofthe

impactsbydisasteranddepression”and,“IsthelimitationoftheJITreallyexists,ornot”.

Keywords :Disaster,JIT,SupplyChain,JapaneseAutomobileManufacturers

1．Introduction

AutomobilemanufacturersonthetopofhierarchyofAutomobileindustryassemblecars.

First Tier suppliers supply major components such as body, engine, and transmission, to

automobilemanufacturers.TheSecondTiersuppliersfurnishthesub-assembly/componentsthat

theFirstTiersuppliersrequire.Similarly,lowerlevelsupplierssupplyhigherlevelsuppliers.If

onlyonecomponentisunavailable,thentheproductionprocessisinterrupted.

Around2008,therewastheworldwidedepressioncausedbythesubprimemortgagecrisis

ofLehmanBrothersintheUS,andin2011,therewastheTohokuEarthquake.Thesecrisisand

disaster affected the Japanese automobile industry. The demand for automobiles also rapidly

droppedduetothesubprimemortgagecrisis,andthen,thesupplyofautomobileswasfurther

delayedbytheEarthquake.Especially,inthesituationofglobalizedandcentralizedsuppliersin

thelowertiers;ifthesesupplierswereaffectedbyadisaster,theproductionatsupplierʼsplant

Disaster Management and JIT of Automobile Supply Chain

Toko Sasaki

＊SASAKI,Toko〔情報システム学科〕


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stop,thenalmosteveryautomobilemanufacturerwillbeaffectedbyit.

2．Supply Chain Network of Japanese Automobile Industry

TheJapaneseautomobilesupplychainnetworkisverycomplex.TheJapaneseautomobile

suppliernetworkiscalled“keiretsu”.This“keiretsu”structureofassembler-supplierrelationship

historically enabled Japanese automobile manufacturers to remain lean and flexible while

enjoyingalevelofcontroloversupplyakintothatofverticalintegration(AhmadjianandLincoln

2000).TheJapaneseautomobileindustrywaslikeapyramid,(asshowninFigure1a),divided

into threeoranymore tiersofsuppliers, centredaround thesevenmainassemblygroupsor

singleassemblers-Toyota-Daihatsu-Hino,Nissan-Subaru-NissanDiesel,Honda,Mazda,Mitsubishi,

Isuzu,andSuzuki(Shimokawa1994).TheJapanesesuppliernetworkhadahierarchicalstructure,

with each major car manufacturer at the top of the hierarchy. In the 1980s, the in-house

productionratioofJapanesecarmanufacturerswascomparativelylowerthanthoseofUSand

Europeancarmanufacturers(Konno2005).InJapan,onlyabout30-40percentofpartswasʻin-

houseʼ. In North America and Europe up until the early 1980s, the rate of ʻin-houseʼ parts

productionwas60percentto70percent(Shimokawa1994).

However,inthe1990s,theJapaneseautomobileindustryfacedseveralcrises,suchasthe

Figure 1:SupplyChainNetworkofAutomobileIndustry

(a) Pyramidal Structure

The rate of 〝In- house” parts production is 20-30%

(b) Diamond Structure(Barrel Structure)

The rate of 〝In- house〞 parts production was 30-40%


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collapseofʼbubbleʼeconomy,theyenʼsappreciation(1990:140yen,1995:79yentothedollar),

the1995KobeEarthquake,andtheincreaseoftheconsumptiontax(from3percentto5percent;

1997).Duetotheimpactofthesecrises,theJapaneseautomobileindustryacceleratedshifting

ofproductiontooverseassite,movingtowardoptimalparts,andpromotionoftheestablishment

Figure 2: The Changes of Supply Chain Network of Automobile Industry

In the lower tier, some weak companies in price and/or quality competitiveness disappeared.

Superior companies in priceand/or quality remained.

Similarly, some weak companiesdisappeared, superior companiesremained and became bigger.

Decentralized

Centralized

Companies in the lower tier competedacross the Keiretsu.

The first and second tier parts are decentralized suppliers,the lower tier parts are centralized in specific companiesthat has the specialized process technology.

Pyramidal Structure

Diamond Structure(Barrel)

AutomobileManufacture

AutomobileManufacture


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ofaglobalsupplynetwork.Infact,therearesomeJapanesecompanieswhichsupplypartstonot

only assemblers inside the keiretsu group but also outside the group, as shown Figure 1b.

Moreover, some of the major parts manufacturers supply the entire Japanese automobile

manufacturers. In fact, a lot of suppliers in the lower tier provide own products across the

keiretsu. The first and second tier parts (functional components) are decentralized amongst

severalsuppliers,thelowertierparts(simplecomponents)arecentralizedinonecompanythat

usesspecializedprocesstechnology(Fujimoto2011).Thisisthe“diamondstructure”or“barrel

structure”ofsupplychainofJapaneseautomobileindustry.Figure2showsthechangesofthis

structure.

Inpyramidalstructurecase,asshownFigure3a,ifdisastersuffersinthelowersupplierʼs

plant,althoughautomobileassemblyplantsnotdamage,theywereinterrupted.Becauseofthe

supplyofcomponentsfromthesuppliersinthelowertiersstopped.Theimpactofautomobile

industryaffectedinthe“keiretsu”group.Ontheotherhand,indiamondstructurecase,inthis

situation of centralized suppliers in the lower tiers, as shown Figure 3b; the production at

suppliersʼplantstop,thenalmosteveryautomobilemanufacturerareaffectedbyit.

In 2007, about four years before the 2011 Tohoku earthquake, there was a strong

earthquakeinNiigata.Thisearthquakeisnʼtknownwell,butRikenʼsKashiwazakiPlantinNiigata

had huge damage by this earthquake, affecting the operations of all of Japanʼs automobile

manufacturers.

For the following chapter, I will attempt to clarify the effects that the lack of a small

componentinautomobileaffectedtoentireJapaneseautomobileindustry.

3．Rikenʼs Kashiwazaki Plant (2007 Niigata Chuetsu-offshore Earthquake)

3.1 Rikenʼs Overview

TheRikenCorporationʼsmajorproductsarepistonringofenginepartsandsealringof

transmissionparts,asshownTable1.Thereare,dependingonRikenʼsparts,differentcompanies

that Riken supplies parts. In the case of Mazda, directly procure piston rings from Riken,

transmissionpartsaresuppliedfromRikentoJatco(transmissionmanufactureinNissankeiretsu),

Figure 3: The Damages of Supply Chain Network by Disaster

(a) Pyramidal Structure (b) Diamond Structure(Barrel )


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afterthensuppliedtoMazda.PowersteeringʼspartsaresuppliedfromKYB(KayabaCo.,Ltd.),and

thensuppliedtoMazda.RikenproducestheminRikenʼsKashiwazakiPlant.In2007,thisPlant

had huge damage from the Niigata Chuetsu-offshore Earthquake. The seismic center of this

earthquake was close to the Rikenʼs Kashiwazaki plant. The Rikenʼs Kashiwazaki Plants had

suspended operations for one week after this earthquake, then, the Japanese automobile

manufacturersalsointerruptedoperation.

3.2 Rikenʼs Piston Rings

TheRikenʼsKashiwazakiPlantproductsapproximately50percentofthepistonringsthat

usedbytheentireautomobileindustryinJapan(theworldmarketsharewasapproximately20

percent).ThereareonlythreecompaniesofpistonringinJapan,thus,pistonringmarketisan

oligopoly.Inthismarket,Rikensuppliesthemostpistonringstoallautomobilemanufacturers,as

shownChart1.Sinceallautomobilemanufacturersdependedonthesupplyofpistonringsand

other components from Rikenʼs Kashiwazaki Plant, all plants of automobile manufacturers

suspendedproduction.

3.3 Chronological Events at Rikenʼs Kashiwazaki Plant (Operations)

Followingtheoccurrenceoftheearthquakeon16July2007,alltheproductionlineshad

stopped at Rikenʼs Kashiwazaki Plant. Fortunately, 16 July was holiday. Although, Rikenʼs

KashiwazakiPlantwasoffduty, several employeeswere injuredwhileworkingonequipment

maintenanceatRikenʼsfacilities.Astotheequipment,thereoccurredsomeslideslip,somepieces

Table 1: Overview of the Riken Corporation

Capital ￥8,573,597,000(asofMarch2011,allofRikenCorporation)

NumberofEmployees 1,627(asofMarch2011,allofRikenCorporation)

MajorProducts

PistonRing　　◦Engineparts　　◦Approx.50%ofdomesticmarketshareSealRing　　◦Transmissionparts　　◦Approx.70%ofdomesticmarketshare

MajorCustomers

AutomobileandotherVehicleManufacturers

Honda, Suzuki, Toyota, Nissan, Fuji Heavy Industries. Ltd,Mitsubishi, Mazda, Daihatsu, Mitsubishi Fuso Truck and Bus,Nissan Diesel, Hino, Isuzu, Yamaha, Kawasaki Heavy Industries.Ltd,Ford,BMW,VW/Audi,OPEL,FIAT,Renault,Porsche,Jaguar,Hyundai,Kia

DistributorsandSalesAgentsforAutomobileParts

Eiwa, Empire, Auto Parts Uematsu, Global Tsusho, ChicagoProduct,SumishoMachineryTrade,DaishoTrading,TMTTrading,Toko Trading, Parts International, Heian Boeki, Meiji Sangyo,MotorixInternational

AutomotivePartsManufacturers

Aisin AW, Jatco, Musashi Seimitsu Industries, Calsonic Kansei,KYB, Nissin Kogyo, Yamaha Marine, BrotherPrecisionIndustry,Valeo,AisinSeiki,WagaPrecision,ZF

Source:CorporateInformationofRiken


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oftheequipmentgotlopsidedortoppledover.Someofproductsthatwerefinishedorinprocess,

molds,jigsandtools,andmeasuringinstrumentsfelltothefloor.Rikenʼsmachineʼslosseswere

100millionyen,inventoryʼslosseswere200millionyen,andittookrecoverycost1,200million

yen(consolidated).

Theautomobilemanufacturersvoluntarilyprovidedassistancewithengineeringandrepair

immediatelyafterearthquakeandhelpedRikenrestartmuchmorequicklythanitwouldhave

beenabletoonitsown.Theyhelpedcleanupandrepairthedamagetomanufacturingequipment

and the lossofbuildingcontents.Totalnumberofassistanceswasapproximately9,000from

about 25 automobile manufacturers and automobile parts manufacturers. That is to say,

Chart 1: Monthly Supplies and Purchases of Piston Rings in Japan, in 2005

Source: Daniel E. Supply Chain Disruption Risk and Recovery: Temporary Diversification and Its Limits, 2011

Table 2: Recovery at Rikenʼs Kashiwazaki Plant

DateDaysLater

Events Operations

16July2007

0The2007ChuetsuOffshoreEarthquakestruckat10:13a.m.AlltheproductionlinesatRikenʼsKashiwazakiplathadstopped.ToyotasentRikenabout20employeestoassessthesituationofthedamages.

0%

17July-2007

1 6companiesvoluntarilyprovided41assistancestoRikenʼsKashiwazakiPlant. 0%

18July2007

2 MazdasentRiken8employees. 0%

19July-2007

3Therewere700skilledvolunteersfromautomoblemanufacturersandpartsmanufacturers.(Toyota:200employees,Mazda:13maintenanceengineers)

0%

22July2007

6 Rikenstartedtrialoperation. 0%

23July2007

7Rikenresumedproductionsofmajorproducts (pistonrings,seal rings,andcamshafts)at10a.m.Partofthelinesdidnʼtresumeyet.25companiesprovided830assistances23-24July.

Almost100%

1August2007

16 RikenannouncedRikenʼscompleterecovery. 100%

Source:PressReleaseofRikenandarticlesofNihonKeizaiShinbun(Japanʼsmostprestigiouseconomicnewspaper)


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Automobile/partsmanufacturersprovidefivetimesasmanyassistancesasRikenʼsemployees.

Table2showsthechronologicaleventsatRikenʼsKashiwazakiPlant.On23Julywhichoneweek

aftertheearthquake,RikenʼsKashiwazakiPlantresumedoperations.

3.4 The Rikenʼs Affects to Japanese Automobile Manufacturers

Riken has specialized in design and technologies of piston rings and other automobile

components,sothatothersuppliersdonʼtimitateiteasily.Allmajorautomobilemanufacturersin

JapandependonRikenʼspistonringsandotherparts.Inadditiontospecialization,“Just-in-Time”

thataimedtoreduce the inventory levelofcomponentsatautomobilemanufacturersandthe

upper tail suppliers, had stopped productions of automobiles in Japan. Figure 4 shows the

operations by automobile manufacturers after 2007 Niigata Chuetsu-offshore Earthquake.

AlthoughToyota,Subaru,Suzuki,andDaihatsuhadsuspendedoperationsfrom19July,Mazda

wentonoperating.BecauseplantsofMazdaare in the fardistance fromRikenʼsKashiwazaki

Plant,sothattherewasatimelagofthedelivery.ThisissimilartoHondaʼsmini-vehicleproduction

lineinKumamotoPlant.

4．Renesas Electronics Corporationʼs Naka Plant (2011 Tohoku Earthquake)

4.1 Renesas Electronics Corporationʼs Overview

ThemajorproductsofRenesasElectronicsCorporation(REC)areMicrocontroller,System

LSIs/SystemonChip(SoC)Devices,andAnalog&PowerDevices,asshownTable3.In2011,REC

had huge damage from the Tohoku Earthquake. Especially, RECʼs Nala Plan had suspended

operationsfor82daysafterearthquake.RECʼsNakaPlantproducedalittlelessthan20percent

ofRECʼsMicrocontrollerUnits(MCUs)andSystemLSIs/SoCSolutions,andalittlelessthan10

percentofRECʼsAnalog&PowerDevices.

4.2 RECʼs Microcontroller

RECistheworldʼslargestmanufacturersofMCUwithmarketshare.Chart2ashowsthe

worldwideMCUmarketsharein2010fromtheDatabeansEstimate.In2010,beforetheTohoku

Source: Press Releases of each automobile manufacturers and articles of Nihon Keizai Shinbun

Figure 4: Operations of Major 8 Automobile Manufacturers in Japan


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Earthquake,theMCUmarketshareofRECwas30.0percent,theMCUrevenueofRECwas4,441

milliondollar.Accordingtoothermarketresearchcompanies,RECʼsMCUmarketsharewas29

percent(Gartner),27.3percent(IHSiSuppli)in2010.

In2010,theautomotiveMCUmarket(5,358milliondollar)was36.2percentofthetotal

MCUmarket (14,800milliondollar).Chart2b shows theworldwideautomotiveMCUmarket

sharein2010fromtheDatabeansEstimate.TheautomotiveMCUmarketshareofRECwas41.5

percent,theautomotiveMCUrevenueofRECwas2,221milliondollar.

4.3 Chronological Events of RECʼs Naka Plant (Operations)

Theimpactoftheearthquakeon11March2011causedeightRECʼsplants(includeNaka

Plant)outoftwentytwoofRECʼsplantsinJapantoimmediatelyshutdownproduction.These

Table 3: Overview of Renesas Electronics Corporation (as of April 2012)

Capital ￥153.2billion

NumberofEmployees 44,000(Consolidated)

MajorProduct MicrocontrollerSystemLSIs/SoCDevices.Analog&PowerDevices.

GroupCompanies InJapan◦　1SalesCompanies.◦　14ManufacturingandEngineeringServiceCompanies.◦　7DesignandApplicationTechnologiesCompanies.◦　2BusinessCorporationsandOthers.Overseas◦　11SalesCompanies.◦　8ManufacturingandEngineeringServiceCompanies.◦　4DesignandApplicationTechnologiesCompanies.◦　6BusinessCorporationsandOthers.

Source:CorporateOutlineofRECʼs

Source: Databeans Estimates, Company Reports Note: Amount of the MCU revenue was 14.8 billion dollar in 2010 Amount of the automotive MCU revenue was 5.36 billion dollar in 2010

Chart 2: Worldwide MCU Market Share by Suppliers in 2010


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Figure 5: Locations of RECʼs Plants

Temporarily Shut down

Front-end line: 5 plantsBack-end line: 3 plants

Center of Earthquake

REC’s Naka Pla

Back-end Line(Assembly & Test: 12 plants)

Front-end Line (Wafer Fabrication: 10 plants)

Table 4: Chronological Events at RECʼs Naka Plant

Date Afterdays Events

11March2011 0

The2011TohokuEarthquakestruckat2:46p.m.7(includeNakaPlant)outof22ofRECʼsplantsinJapanhavetemporarilyshutdownproduction.RECʼsproductionvolumefelttoapproximately50%.

13-14March2011 2-3

8RECʼsoffices/sitesinJapanhadbeenimpactedfromtheblackoutmeasurebyTokyo Electric Power Company, These offices/sites shut down operationproduction.

21March2011 10 RECestimatedthatNakaPlantwillresumepartofproductionon1September.

28March2011 17 RECannouncedthatNakaPlantwillresumepartofproductionon15July.

22April2011 42 RECannouncedthatNakaPlantwillresumepartofproductionon15June.

23April2011 43 NakaPlantstartedtestproductionatthe200-mmwaferfabricationline.

25April2011 45 NakaPlantstartedtestproductionatthe300-mmwaferfabricationline.

11May2011 61 REC published that Naka Plant will resume 200-mm wafer fabrication line of

productionatNakaPlanton1June,300-mmlineofproductionon6June.

1June2011 82 200-mmwaferfabricationlinestartedmassproduction.

6June2011 87 SystemLSI(300-mm)waferfabricationlinestartedmassproduction.

10June2011 91 RECannouncedthattimingonwhenthesupply(shipment)capacitywillreturnto

thatofpre-earthquakelevelsintheendofSeptember.

June2011 RECʼsproductionvolumerecoveredtoapproximately85%.

Mid-September2011 Thesupply(shipment)capacityreturnedtothatmorethanpre-earthquake.

Source:PressReleaseofRECandarticlesofNihonKeizaiShinbun


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plantswerefivesemiconductorwaferplantsandthreeassemblyplants,asshownFigure5.Due

toplantʼsshutdown,productionvolumeofthewholeRECʼs200-mmwaferfabricationfeltto50

percentafterthisearthquake.

Table4showsthechronologicaleventsatRECʼsNakaPlant.RECʼsNakaPlantwastheworst

affected in all RECʼs plants. Although, just after the Tohoku Earthquake, initial predictions

estimatedthatNalaplantwouldresumeproductioninSeptember2011, infact,productionat

Naka Plant restarted on 1 June 2011. The supply/shipment capacity returned that of pre-

earthquakelevelsinthemiddleofSeptember2011,sixmonthsafterthe2011TohokuEarthquake.

Total number of assistances was approximately 80,000, and there were maximum 2,500

assistancesperday.Thisnumberwasmanymore than1,900employeesofRECʼsNakaPlant

(includingitsrelationcorporations).

4.4 The 2011 Tohoku Earthquakeʼs Affects to Automobile Manufacturers

REC isamajormanufacturerofMCUswhichJapanesecompaniesholdinga largeshare

worldwide.Theeffectoncustomercompaniesʼsupplychainwasverylarge.Infact,theJapanese

Automobile manufacturers had been hit hard by shortages of MCUs and other components,

causingRECʼsplantsandotherlowertiershadshutdown.Mostautomobilemanufacturerswas

fewdirectdamagetoplantsbytheearthquake,butNissanʼsIwakiplanthadwithaftershocksstill

heavilyimpactedtheregion, itsrecoverytooklongerthantheotherplants.Toyotasuspended

productionatallplantsforabouttwoweeksbetweenfrom14Marchto26March.Followingthis,

thedomesticautomobileproductionsofToyotainMarch2011wasrecordedas129,491units.

Comparedwiththe347,281unitstotalrecordedforthesamemonthofthepreviousyear,thisis

adecreaseof217,790unitor37.3percent.Itwasthe38daysaftertheTohokuEarthquakethat

allToyotaʼsplantsresumedoperation.Similarly,otherstookaboutamonthtoresumeallplantʼs

operation.

Table 5 shows the reductions in production by the Tohoku Earthquake. Automobile

productionof thewholeJapaneseautomobilemanufacturers inMarch2011wasrecordedas

403,937 units. Comparedwith the 945,220 units total recorded for the samemonth of the

previousyear,thisisadecreaseof541,283unitor42.7percent.Itʼsalso5.3timesasmanyas

thereductionsinthe2007NiigataChuetsu-offshoreEarthquakeandover38timesofthe1995

KobeEarthquake.

Table 5: Reductions in Productions by the Earthquake

Earthquake Reduction Productions

The1995KobeEarthquake14,021

(January1995)January1994:772,858January1995:758,837

The2007NiigataChuetsu-offshoreEarthquake101,636

(July2007)July2006:977,856July2007:876,220

The2011TohokuEarthquake541,283

(March2011)March2010:945,220March2009:403,937

Source:ActiveMatrixDatabaseSystemofJAMA


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5．Summary of Earthquake Effects on Production

5.1 Earthquakeʼs Effects to Automobile Manufacturers

5.1.1 The Effect to Automobile Manufacturersʼ Operation

After both earthquakes, Japanese automobile manufacturers decided/executed the

disruptionofallassemblyplantsearly.IncaseofToyota,ontheeveningofthe19July,2.5days

after the 2007 Niigata Chuetsu-offshore Earthquake, all Toyotaʼs plants started to suspend

operation.Similarly,afterthe2011TohokuEarthquake,allplantsstartedtosuspendoperation3

dayslater.Theaveragenumberofdaysofthemajoreightautomobilemanufacturerswas3.6(in

2007),and3.0(in2011),asshownP1inFigure6.

Consideringthehugescalesoftheseearthquakesanddamagesbythem,theirdecisionof

theshutdownsandtheresumptionofoperationswarespeedyandappropriately.Thereasonwhy

Japanese automobile manufacturers decided/executed the disruption so early after both

earthquakes,therewererelatedtotheToyotaProductionSystem(TPS)thatawidelyaccepted

productionsystem.TPSwasestablishedbasedontwoconcepts-“jidoka”and“JustinTime(JIT)”-.

“jidoka” means that when a problem occurs, the equipment stops immediately, preventing

defectiveproducts frombeingproduced. For this reason, therewerenotwrongdecisions for

Japaneseautomobilemanufacturerstostopproductionlines/plantbybothdisasters.Thesecond

Earthquake All plants operated Some plants operated partially All plants stopped operation

* P1: The number of days from the day on which the earthquake stroke until the day on which all assembly plants stopped operation.** P2: The period of days in which all assembly plants stopped operation*** P3: The number of days from the day on which the earthquake stroke until the day on which all assembly plants resumed operation.

Figure 6:ComparisonofAutomobileManufacturerʼsRecoveryTime

TOYOTA0 1 2 3 4 5 6 7 8 9

16Jul

17Jul

18Jul

19Jul

20Jul

21Jul

22Jul

23Jul

24Jul

25Jul

Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed2007 Niigata

2007 Niigata 2011 Tohoku

P1* P2** P3*** P1* P2** P3***

Toyota 2.5 4.5 9 3 14 38

Nissan 4 5 9 1 18 38

Honda 7 1.5 9 4 9 31

Mazda 5 2 9 3 8 24

Mitsubishi 4 3 9 3 2 38

Subaru 2.5 5.5 9 3 9 25

Suzuki 3 4 9 3 8 25

Daihatsu 2.5 3.5 9 4 7 38

Average 3.8 3.6 9.0 3.0 9.4 32.1


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istheconceptofJIT,inwhicheachprocessproducesonlywhatisneeded,whenitisneed,andin

theamountneeded.“JustinTime”madeeliminatingunnecessaryinventoriesinprocess.Tokeep

inventoriestoacceptablylowlevelachievenotonlycostreductionbutfastrecovery.Itisimportant

fordisaster-struckplanstorecoverquicklyfromthedestructiveeffectsofseismicdisaster.

5.1.2 Speed of the Recovery

AsshownP3inFigure6,inthecaseofToyota,on25July,9daysafterthe2007Niigata

Chuetsu-offshoreEarthquake, allToyotaʼsplants resumedoperation. Similarly, after the2011

TohokuEarthquake,allplantsresumedoperation38dayslater.Theaveragenumberofrecovery

daysofthemajoreightautomobilemanufacturerswas9.0inthe2007earthquake,and32.1in

the2011earthquake.Likethis,ittookoveramonthtoresumetheoperationofallplantsinthe

2011TohokuEarthquake.

This delay effects to the recovery speed of production. Chart 3 shows the rate of the

domesticproductionofallautomobilemanufacturersforoneyearaftertheearthquake.Although

thewholeJapaneseautomobilemanufactureshadrecoveredtheirproductionafteramonthof

the2007NiigataChuetsu-offshoreEarthquake,ittookfivemonthsuntiltheproductionofthem

returnedtonormalproductionafterthe2011TohokuEarthquake.

5.2 Chronological Changes of the Domestic Product in Japan

Chapter9showsthechangesofthedomesticautomobileproductsinJapanfromJanuary

1995throughMarch2012.Itappearstwothingsfromthischapter.First,thedisasterʼsimpacts

toJapaneseautomobilemanufacturersʼproductionwerenotmorethanthedepressionʼsimpacts.

Chart 3:Thechanges(%)oftheDomesticAutomobileProducts

Source: Active Matrix Database System of JAMA Note: The previous year’s result indexed at 100

(Months later)


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Second,therecoveryspeedsofJapaneseautomobilemanufacturerʼsproductionatdisasterswere

quicker rather than the depressions. Especially, in the Tohoku Earthquake, there was huge

damagenotonlytotheJapaneseautomobileindustrybutalsotothewholeeconomyinJapan.

Japaneseautomobilemanufacturersalsorapidlydecreasedtheirproductsbyinterruptingofthe

assemblyplants.Despiteofthem,therecoveryspeedafterthisearthquakewasquickerthanthat

ofthedepressionsuchastheLehmanShock.

5.3 Disaster and JIT

AsshownTable6, in thecaseof JIT, the inventory level/costof theassemblyplantsof

automobilemanufacturersislower,thetransportationcostishigher.Becausetheleadtimesof

thetransportationareshorterandmorefrequent.Duetothefewerinventories,theadaptability

ofenvironmentssuchasdepressionandcrisisishigherthannonJIT.

AfterbothEarthquakes,therewerenotafewarticlesthatinsistedofthelimitationsofJIT

innewspaper,journal,andpublicreports.Buttheirargumentsfocusedonthatthelowerinventory

causedtotheshutdownofplantsafteradisaster.AswasmentionedSection5.1,therewerenot

wrongdecisionsforJapaneseautomobilemanufacturers to immediatelystoptheirproduction

plantsbybothdisasters.Itwasveryimportanttorecoveryproductionquickly.Becauseofthe

Japaneseautomobilemanufacturersknewit,theyvoluntarilyprovidedalotofassistancestothe

damagedplantsofthelowertiercompaniesdoetorecoverplantsquickly.AsshownTable11,in

JIT case, the recovery speeds are quick, excluding large scale disasters such as the Tohoku

Earthquake.Thisisreasonthatthelossondisposalofinventoriesatthedamagedplantsreduces.

Ifdamagedplantshavealotofinventories,thelossondisposalofinventoriesincrease,theyneed

moretimetorecover.Therefore,itisimpossibletosaydefinitelythatthelimitationofJITexists

inthesituationofdisasters.

As for the riskmitigation strategy to dealwith large scale disruptions of supply chain

Chart 4:Thechanges(Units)oftheDomesticAutomobileProductsfromJan1995throughJan

2011

Source: Active Matrix Database System of JAMA


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network,makeprovisionstomovetoalternativesitesforproduction,iftheyareunabletoproduce

componentbyadisaster,asshownFigure7.InRikenandRECcases, inspiteofthedamaged

plantsdisruptedforalongtime,theywerenotabletoimmediatelyproduceequivalentcomponents

inotherplants.Thisreasons thatbothcorporationscreated thehigher technicalskilland the

strengthofpricecompetitivenessinaplant,cometoholdarelativelylargeworldmarketshareof

someparticularautomobilecomponents

6. Conclusion

Thispaperhasrevealedtheinvisibledamagesbyfocusingontheeffectstothesupplychain

Table 6: Comparisons of JIT and Non JIT

NormalInventory

Level / CostTransportation

L.T. / CostEnvironmentAdaptability

JIT Low/Low Short/High High

NonJIT High/High Long/Low Low

Abnormal(Depression)

StorageTime

InventoryCost

InventoryRisk

JIT Constant(Short) Constant(Low) Constant(Low)

NonJIT Longer Higher Higher

Abnormal(Disaster)

Shutdown of PlantsLoss on disposal of

InventoriesRecovery Speed of Plants

JIT

DamagedPlants:　　　ImmediatelyOtherPlants:　　　Earlier

DamagedPlants:　　　　　LowOtherPlants:　　　　　Non

DamagedPlants:　　　　　QuickOtherPlants:　　　　　Quick

NonJIT

DamagedPlants:　　　ImmediatelyOtherPlants:　　　Later/Avoid

DamagedPlants:　　　　　HighOtherPlants:　　　　　Non

DamagedPlants:　　　　　SlowOtherPlants:　　　　　Slow

Figure 7:MutualComplementNetwork

Riken & REC In future

Nodes of the Mutual Complement Network of Production

Mutual Complement Network


― ―95

network, production system in Japanese automobilemanufacturers by these disasters.As for

recoveryspeedfromdisasters,JIToperatedtoadvantagetotheJapaneseautomobileindustry.In

addition,fundamentalissuesoftheirdamageswereunveiled.

AsforTPS,therewerenotwrongdecisionsforJapaneseautomobilemanufacturerstostop

productionlines/plantsbybothdisasters.Thecomparisonofdisasteranddepressionintermsof

thedecreasingspeed/volumeofsupplyandtherecoveryspeed.Itisimpossibletosaydefinitely

thatthelimitationoftheJITexists.

References

Ahmadsian and Lincoln, Keiretsu, Governance, and Learning: Case Studies in Change from the Japanese Automotive Industry Institute of Industrial Relations University of California, Berkeley, Working Paper No.76, 2000.

Koichi Shimokawa, The Japanese Automobile Industry, Continuum International Publishing Group, 1994.

Takahiro Fujimoto. Supply Chain Competitiveness and Robustness: A Lesson from the 2011

TohokuEarthquakeandSupplyChain “VirtualDualization”.ManufacturingManagement

ResearchCenter(MMRC)DiscussionPaperseries2009.

YoshinoriKonno,Suppilers'PerformanceandTransactionswithCustomers:RoleoftheAdvanced

R&DCollaborationbetweenAutomakersandSuppliersintheJapaneseAutomotiveIndustry,

TheResearchInstituteofInnovationManagement,HoseiUniversity,WorkingPaperSeries

No.58,2008.

disaster management and jit of automobile supply...

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