Connection between Toyota’s success and 1,400 critical parts, by global director

In a recent conversation with Leila Aridi Afas, the director of global policy at Toyota Motor North America she gave insights into the global success of the auto brand, including, crisis management strategy.

Indeed, she stressed that Toyota’s focus on 1,400 critical parts out of about 30,000 parts and getting them ready had kept the supply chain going.

According to her, the first step to solving any gigantic problem is to gather information. A team in the company worked around the clock to map out the entire supply chain—not just one supply chain for the company, but chains for nearly every single part it takes to make nearly every single one of their automobiles. The team identified about 1,400 critical parts (out of roughly 30,000 parts total) that had relatively long lead times. If any one of those 1,400 critical parts was not available, the entire production line could be forced to a halt.
“The team identified their suppliers, their suppliers’ suppliers, and their suppliers’ suppliers’ suppliers,” Leila explained. Over time, Toyota worked to increase inventory and manage lead times for these critical parts. Listening to her explain the database, you get the sense that if anyone so much as sneezes in a plant where one of those 1,400 critical parts is coming from, a red-alert button lights up. While that’s not literally the case, Leila described several ways in which Toyota worked to safeguard its supply of critical parts:

A team within the company worked to diversify its presence in multiple geographic regions while ensuring that it could procure the necessary parts to keep building vehicles if one particular region were unable to produce.
Toyota began standardizing parts across different vehicle models. Now, if one supplier shuts down for any reason, another plant is able to increase production of the standardized part to meet demand.
When standardization wasn’t an option—as is the case for the 1,400+ critical parts Leila’s team identified—Toyota increased inventory to maintain a supply in case of emergencies.
Leila identified several takeaways from Toyota’s experiences in dealing with supply chain problems.

She said, “In my view, the most important part is the trust and respect between Toyota and our suppliers, who are truly partners.”

She also emphasized the importance of staying in close and constant communication with suppliers.

Following the devastating 2011 earthquake and tsunami, Toyota created a new database called the Rescue system, which suppliers update in real time and which Toyota tracks consistently. “It’s crucial that the information is always up to date,” Leila said, adding, “You never know when a crisis will strike.”