Contents
Saturday, February 1, 1997, 4:18 a.m.: a fire breaks out at Aisin Seiki’s plant in Kariya, Japan. By 8:52 a.m. the production lines are destroyed. Aisin belongs to the Toyota Group and makes P-valves (proportioning valves) here, small components of the braking system. By Monday, 20 of Toyota’s 30 assembly lines are at a standstill. On Tuesday and Wednesday, virtually every plant is idle. An example of the Team Principle of the Weakest Link.
One Part, One Plant
Situation
A P-valve costs between 770 and 1,400 yen apiece. Aisin supplies virtually all of Toyota’s needs, around 32,500 units a day in more than a hundred variants. Only about one percent comes from a second manufacturer. Toyota runs a just-in-time system, with almost no inventory. Depending on the source, the stock of P-valves lasts anywhere from a few hours to a few days. Then there is the timing: in early 1997 Toyota’s plants are running with overtime and temporary workers, because a surge in sales is expected ahead of a tax increase on April 1.
Connection to the team principle
The Team Principle of the Weakest Link says: where everyone depends on everyone else, the weakest member determines the outcome. A supply chain is not a team of people but a network of companies. The logic, however, is the same. A car without this valve is not an almost finished car; it is no car at all. The weakest link here was not the worst one – Aisin was regarded as a capable supplier – but the only one. In a chain, weak often means: without a backup.
Two Days at a Standstill
Situation
At first, a shutdown lasting weeks is expected. On February 3 Toyota reports 20 of its 30 lines at a standstill. On February 4 and 5, virtually all plants of Toyota and its affiliated companies are idle. In the end, lost output comes to around 70,000 vehicles. Aisin puts its own losses at 7.8 billion yen. Toyota’s lost revenue initially amounts to about 160 billion yen, most of which is later made up.
Connection to the team principle
Thousands of parts were on hand, tens of thousands of people were ready to work, and one component meant that nothing came off the line. The more tightly a system is synchronized, the faster a single gap hits everyone. That is not an argument against tight synchronization. It only means that if you cut buffers, you need to know where that leaves you working without a net.
More Than 200 Companies Step In
Situation
According to reports, Aisin asks other companies for help on the very day of the fire and makes its drawings available. Sixty-two companies respond immediately. Around 70 end up taking on production themselves, and in total more than 200 companies help. Among them are firms that have never built a P-valve – according to press reports, even a sewing machine maker. There are no contracts or price negotiations beforehand. The small supplier Koritsu Sangyo delivers the first sample part on February 3. Denso follows on February 5 and starts series production that same evening. On February 6 the first plants restart, and on the 7th the rest, on a single shift. By February 10 output is back to normal levels.
Connection to the team principle
This is where the second half of the principle comes into view. The weakest member determines the outcome as long as the others stand by and watch. This network did not stand by. For companies to start making someone else’s part with no contract and no agreed price presupposes trust that had grown long before the fire. A broken link can be replaced within days if the relationships around it hold. The chain was thin; the net behind it was not.
Settling Up
Situation
Afterward, Aisin reimburses the helpers for their costs. Toyota pays its direct suppliers a total of more than 15 billion yen, about one percent of their quarterly sales to Toyota.
Connection to the team principle
Those who step in must not end up out of pocket. Paying after one crisis secures help in the next. The same holds on a small scale: when someone on your team takes over the work of a colleague who is out, the way you handle it determines whether anyone will do it again next time.
Key takeaways
Key Lessons
- Go through your processes and mark every point where there is only a single source: one person, one tool, one supplier.
- For each of these points, ask: how long can we hold out if it fails? Hours, days, weeks?
- Build relationships before you need them. Help without a contract only comes to those who were reliable beforehand.
- Make knowledge shareable. Aisin was able to hand over its drawings. What exists only in one person’s head, nobody can take over.
- Acknowledge what those who step in achieve, and cover their costs.
Summary
A fire in a single plant cut Toyota off from a cheap brake valve and brought the group to a halt for days. The chain was only as strong as its one point without a backup. Yet within days, dozens of companies were making the missing part, without contracts or price negotiations, and after little more than a week production was back to normal. So the Team Principle of the Weakest Link does not merely describe a risk. It sets a task: know the thin spots, and build a web of cooperation that holds when one of them snaps.