One supplier?

On July 16th 2007, an earthquake struck Japan. Riken, a company making piston rings for almost all Japanese auto companies had suffered massive damage. Most automakers were forced to slow down their output. The article below highlights the damage.

http://www.usatoday.com/money/world/2007-07-18-toyota-quake_N.htm

More important were the questions that ere raised about the Single vendor concept of JIT. In this era where disasters are not as rare as they were earlier, would this strategy of single vendors work out? A damage to one vendor can halt the entire industry.

The article below takes a much more pragmatic view of the event.

http://www.ventureoutsource.com/contract-manufacturing/supply-chain-management/lean-manufacturing/just-in-time-jit-strategy-feels-earthquake-tremors

Toyota and Honda had deployed their engineers to help Riken back on its feet. This kind of cooperation in commercial relationship is not something that we here often. The single vendor concept was forcing them to work as partners.

And at the end of the day, I believe that its almost impossible to plan for all disasters. The buffers, if created, to mitigate the impact of all possible disasters might turn out to be costlier than the disasters themselves!!

I feel JIT system will not be changed much because of this damage. Maybe one more line would be added in the formal partnership relationships that would talk about disaster management. Lets see what happens, till then, Long live JIT...