• Apr 27, 2009
Fearing that a couple dozen of its U.S. suppliers could shut down production, Toyota has established a "war room" to monitor suppliers and has begun to warehouse assembly components. While the move marks a departure from the automaker's "just in time" production philosophy, a mantra that associates stockpiling with inefficiency and waste, a bankruptcy by one of the Detroit 3 could knock-out a key supplier crippling the Japanese automaker's North American factories. It is a widespread problem, as more than half of Toyota's 500 U.S. parts suppliers are also under contract to supply parts to General Motors.

The "war room" is located in Erlanger, Kentucky, at a major Toyota assembly complex. Reviews are conducted by senior executives each week to monitor the supply chain. It's the Tier 2 and Tier 3 suppliers that has the automaker most worried, as the small companies are less visible on the radar yet their closure could be just as catastrophic. To help stave off supply interruptions, Toyota has sent people to its troubled suppliers to assist their performance and help them cut costs so they will remain afloat.

[Source: Automotive News, subs. req'd | Image: WarGames, MGM/UA]


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    • 1 Second Ago
  • 18 Comments
      • 5 Years Ago
      Toyota War Room. Home of the flame-broiled WOPR
      • 5 Years Ago
      Toyota has so much access production right now, this is pure propaganda. They could shutdown for the whole Summer and barely put a dent in their inventories.
      • 5 Years Ago
      Ummm. Toyota's North American HQ is not in Kentucky. It's in Torrance, Ca.
      • 5 Years Ago
      I suppose if there's a parts shortage and factories have to shut then the excess inventory or news cars can start to be sold.
      • 5 Years Ago
      Why not buy out these tier 2 and tier 3 suppliers when they are close to bankruptcy. I'm sure Toyota can buy them at cut-throat prices now, and they'll be worth a lot more when the economy bounces back.
      • 5 Years Ago
      All companies should all do this all the time really. Look at what happened to Boeing when they ignored their supply chain.
      • 5 Years Ago
      Is this, as I suspect, merely a really nice conference room?
      • 5 Years Ago
      Love the WOPR pic. I'd forgotten how Cold War it looked.

      As far as Toyota goes. I sincerely hope they find a way to deal with suppliers in a way that keeps as many as possible still in business. I think we're in for a bit of merger/takeover frenzy in the near future.
      • 5 Years Ago
      I... I don't know exactly how to put this, sir, but are you aware of what a serious breach of security that would be? I mean, he'll see everything, he'll... he'll see the Big Board!
        • 5 Years Ago
        The only winning move is not to play.
        • 5 Years Ago
        A: Mr. Potato Head ! Mr. Potato Head ! Back doors are NOT secrets !!

        B: I know but you're giving away all our best tricks !!
        • 5 Years Ago
        You can't fight in here, this is the war room!

        • 5 Years Ago
        How about a nice game of chess?
      • 5 Years Ago
      Now, if they put 10% of that effort in to figuring out proper race strategy, they might actually have a chance of winning at F1!
        • 5 Years Ago
        And racing is important in this crisis how?
      • 5 Years Ago
      Who cares if they diverge from their philosophy? Situations change, and you have to adapt to them or be in the same situation as GM and Chrysler. Philosophies only go so far.

      I hope the remains of the ailing auto companies look towards this sort of business management for ideas on how to be successful. There's too many jobs and too much money at stake to not constantly adjust your overall approach.
      • 5 Years Ago
      Hey Bert, Toyota IS having a very good year in F1. Jarno got the pole and fastest lap in Bahrain. The win is coming soon, I'm thinking...
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