Monday, July 10, 2006
A lesson from Toyota

In 1997, Toyota had a major problem on their hands when the key factory of a supplier burned to the ground. It would take 6 months to rebuild the factory, and they only had 3 days worth of inventory on the parts, which were required for almost every vehicle they made at the time. If they were unable to find a solution, their daily production of 15,000 cars would cease entirely. How did they deal with such a huge problem?

They used the relationships they had fostered with hundreds of companies to develop a team approach to the problem. A myriad of other suppliers (many of whom were direct competitors) all pitched in to find a way to produce the needed parts. They would try different techniques to produce them, and as they found things that worked, these solutions were shared so every manufacturer was able to benefit. By not concentrating all their efforts on one solution, they were able to discover techniques from many different sources, which led to an astounding result. Toyota lost less than a week of production, and this became just a minor hiccup in their business. This incident even further strengthened their relationships with their suppliers.

How can you foster cooperation with your business partners? And what can our government learn from Toyota's lesson? Read this excellent article on Slate.com to learn more.


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