Toyota takes the resilience path

Courtesy of Agecom Bahia (Creative Commons license)

We can talk about scenario planning in order to see, understand and manage uncertainty on a longer term planning level but when it comes running the daily business the result of the process i e how we design companies and structures will be the crucial point for the future.

I am again talking about the need to redesign society and businesses and build resilient and shock-managing institutions, rather than slim, lean, efficient and just-in-time structures. Or maybe they can be slim, lean, efficient and just-in-time, but ONLY of these properties are helping organizations to be better at managing dramatic and sudden changes. Otherwise this mental heritage (or garbage) of efficiency and just-in-time thinking from an obsolete industrial age will lead to a certain death when the grim reaper of unexpected shocks or changes comes to take his tribute.

One sign of change comes from Toyota who seems to maintain it’s thought leader position when it comes to taking the next level of industrial development into the area of resilience…

Based on the terrible experience of the Japanese earthquake Toyota are now aiming at change their manufacturing and supplier structures with these three steps:

  1. Standardizing parts – so Japanese automakers could share components manufactured in different locations
  2. Increase supplier inventories – so the outsourced delivery of components will be able to deliver parts longer and not so fast be victims of sudden shortages of material
  3. Making each region independent - i e procurement of components are local so a disaster somewhere would not affect production overseas

This is really interesting but it is worth noting it is just a part of the solution and just from the perspective of the manufacturing plant. There are much more and deeper work to do in order to make the whole value process around the automotive industry resilient and future ready.

But from a longer term strategic perspective, taking this path, or rather being forced to go down it, could turn out to be as important for the long term future success of Japanese auto manufacturers, as the collective Japanese decision to decrease fuel consumption was in the 1980:s.

Are the Japanese again using their problems and tragedies in order to improve before everybody else does?

Read more in Reuter article.