Why can Toyota's <i>keiretsu</i> recover from earthquakes quickly?

Abstract

The keiretsu, or long-term stable business network that exists between Toyota and its suppliers, seems to demonstrate exceptional resilience in the face of natural disasters. Toyota shares production knowledge among the firms in its keiretsu through long-term kaizen-based inter-company learning activities (jishuken). In this regard, we have confirmed that (A) in times of normal operations, jishuken adopt a flat structure of interpersonal connections among firms that facilitates mutual trust. From case studies, we also found that (B) in times of disaster response, the structure "switches" to a hierarchical one with a clearly delineated leadership to bring knowledge and human resources into play.

How can a buying company develop a Toyota-style supplier network while its lean capabilities are still evolving?

“…Since the 1990s, Japanese supply networks have been considered superior because of different practices and activities that build lean capabilities (Womack et al, 1990;Hines and Rich, 1998;Iwao and Kato, 2019):…”

“…Toyota not only sets targets and encourages performance improvements but also develops their suppliers' lean capabilities through unprecedented direct involvement in the suppliers' operations over time (MacDuffie and Helper, 1997;Liker and Choi, 2004;Loh and Lau, 2019;dos Santos et al, 2020). In TSN, suppliers gain access to Toyota's internal lean experts and competence centers that provide arenas for knowledge-sharing (Hines et al, 2004;Suh, 2017;Iwao and Kato, 2019;Powell and Coughlan, 2020); and Early supplier involvement. Japanese firms involve suppliers early in design processes to improve information exchange, minimize design changes, reduce information processing workload and reduce lead times (Lamming, 1993;Fujimoto, 1999;Schoenherr and Wagner, 2016;Morgan and Liker, 2020;Potter and Paulraj, 2020;Potter and Wilhelm, 2020).…”

“…Regardless of the method used, Toyota has a mature lean capability (Helfat and Peteraf, 2003; Suh, 2017), and its capabilities for supplier development are the benchmark for firms seeking to develop lean supplier networks (Hines et al , 2004; Iwao and Kato, 2019; Potter, 2022; Powell and Coughlan, 2020).…”

“…Since the 1990s, Japanese supply networks have been considered superior because of different practices and activities that build lean capabilities (Womack et al , 1990; Hines and Rich, 1998; Iwao and Kato, 2019): Deep supplier relationships. Toyota developed relationships with high involvement and strong interdependencies early (Hines, 1994; MacDuffie and Helper, 1997).…”

Robustness and resilience of supply chains during the COVID‐19 pandemic

“…Even when a strong supply chain link is disrupted because of a large shock, it is more likely than a weak link to be reconnected. In the event of the Great East Japan Earthquake, many firms outside the disaster area supported their supply chain partners to minimise the negative effect of supply chain disruptions and continued the relationships afterwards (Iwao & Kato, 2019 ; Todo et al, 2015 ). Based on the argument above, this study examines the effect of ownership relationships between suppliers and customers on the robustness and resilience of their supply chain links.…”