Section 5. Repeated Difficulties and Trials
Item 1. The Great East Japan Earthquake
Measures to Restore Production
On March 15, the Purchasing Group and the Production Group collaborated to dispatch a local purchasing survey team that began visiting approximately 200 local supplier sites for the purpose of working toward a full-scale restoration of production. Within the automobile industry, immediately after the earthquake, Japan Automobile Manufacturers Association, Inc. member companies established an unprecedented system for supplementing and sharing information related to disaster conditions. As the survey proceeded, it became clear that the parts and materials industries had suffered massive and widespread damage and that the supply chain was severed. TMC determined that a total of 659 sites of its suppliers, including secondary and subsequent suppliers, incurred damage, far outstripping the 13 sites that were damaged in the 1995 Great Hanshin Earthquake.
It was estimated that the impairment of Toyota's procurement would extend to 1,260 items, affecting up to 80% of global production vehicles. It became clear that restoring suppliers and transferring production to other plants was an urgent issue. Detailed information concerning the status of damaged sites, production problems, the number of days of inventory, and so on with respect to the affected items was immediately gathered. It was necessary to take immediate measures with respect to 500 of the items, and purchasing, engineering, production and production engineering groups began preparing response proposals and the work of restoration not only with companies that suffered damage, but also with support from other suppliers. When restoration in a disaster area was unfeasible, work on developing alternative parts and production preparations was conducted with the cooperation of suppliers in the same field.
For two days starting on March 27, President Toyoda went to Miyagi Prefecture and visited Central Motor, suppliers, and dealers to observe local conditions and provide encouragement to those involved. President Toyoda later went to Iwate, Fukushima and Ibaraki Prefectures. During this trip, President Toyoda said, "The cheerful voices of the employees heard over the sounds of the machinery and equipment in the plants as they devote themselves to monozukuri (conscientious manufacturing) and at the dealers, employees enthusiastically welcoming customers-We are confident that the restoration of these everyday occurrences as quickly as possible will support the hopes for tomorrow of all individuals and regions affected by the disaster, and I will continue to make every effort in support of recovery," expressing his strong commitment to the rapid recovery of the affected regions.
The sounds of machinery at Toyota plants gradually resumed. The Tsutsumi Plant and Toyota Motor Kyushu, Inc. restarted production of hybrid vehicles only on March 28. From April 18, all plants in Japan, including those of subsidiary vehicle manufacturers, resumed operations, although at low levels, and everyday conditions were gradually restored.
On 22 April, President Toyoda and Executive Vice President Atsushi Niimi held a press conference in Tokyo to outline a course for return to normal production to the extent foreseeable. Although it would be possible to raise the operating rates of plants in Japan starting in July and overseas plants in August, complete normalization of all vehicle series and all lines would take until November or December. When TMC's account settlement for fiscal year 2010 (ended March 2011) was announced on May 11, it was disclosed that an increase in operating rates for plants around the world, including Japan, had been moved up to June from a July-August timeframe.
At that time, the number of items regarding which there were supply concerns dropped from a peak of 500 in late March to just 30. In addition to restoring damaged plants, diligent efforts to develop production alternatives and alternative parts and to perform rapid quality assessments at manufacturing sites resulted in a restoration of production that greatly exceeded initial expectations. Production was restored, with plants in Japan returning to normal operating levels in early July, followed by the nearly complete normalization of all production sites including overseas plants in September.
Among the accomplishments during the period of recovery following the earthquake disaster, the basic policies of genchi genbutsu (going to the source to find the facts) and rapid identification, decision-making, and implementation, supported by all-out teamwork by all Toyota-related entities, including suppliers, dealers, and subsidiaries outside of Japan affiliates, acted as a driving force for accelerating the pace of return to normalization that was initially projected to take until November or December. In addition, the entire automobile industry worked together for the recovery of Renesas Electronics Corporation, a manufacturer of microcomputers that became a bottleneck in the supply chains of multiple automakers, when its main plant in Ibaraki Prefecture was damaged by the earthquake. As a result, partial recommencement of production, which was initially projected to take place in September, was achieved in June.