You name the catastrophe, and JIT has been through it and survived. Toyota Moto Corporation has had its world-renowned JIT system tested by fire. The massive fire incinerated the main source of crucial brake valves that Toyota buys from the Aisin Seiki plant in Kariya, Japan, and uses in most of its cars. The impact was the loss of 70,000 cars not produced while Toyota got the supply chain repaired. Then an earthquake destroyed Toyota’s transmission supplier, Riken, shutting down production in a dozen factories. Chrysler and many others had their JIT systems tested on September 11, 2001, when the terrorists attacks shut down their state-of-the-art air delivery systems. And on February 5, 2008, during the second shift at Caterpillar’s high-pressure couplings plant in Oxford, Mississippi, a tornado all but destroyed the facility. Despite these catastrophes, managers at these firms, like other executives all over the world, are still cutting costs by consolidating production, reducing inventory, and implementing JIT.

Discussion Questions
1. If you are Mr. Folley, looking over the devastation at the Oxford plant, what do you do to keep Caterpillar’s worldwide production running?
2. Given the inherent risk in JIT and the trauma that the companies have experienced, why has JIT survived?
3. What do these experiences, and the continuing popularity of JIT, tell you about just-in-time?
4. What actions or changes in policy do you suggest for Caterpillar?

  • CreatedJuly 23, 2013
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