A magnitude 6.8 earthquake taught the automotive industry some valuable supply chain lessons last month. Of particular note is what manufacturers who pride themselves on their lean philosophy and JIT operations learned from this logistics shake-up.

Japanese automakers, including Toyota Motor Corp., Nissan Motor Co., Mitsubishi Motors Corp. and Fuji Heavy Industries had to scale back production—even close some plants temporarily—to deal with the effects of the quake on key suppliers.

The Business press was all over this story. The Financial Times quoted one automotive OEM who tried to make lemonade from lemons:

“Because lean producers kept inventory levels to a minimum, it was possible to grasp quickly the level of inventory at every stage of the supply chain.”

Funny, I thought that’s what a good supply chain management system was supposed to do.

In fact, the supplier who caused the biggest supply chain kink with its service disruption did have an ERP system in place. Riken Corp., which owns half of the Japanese market for piston rings, highlighted this fact in its annual report in the late 90s. This came from Kunihiko Oguchi, Riken’s president:

“In June 1997 we restructured our operational organization through the introduction of ERP software, largely as a result of work by Cooperate Engineering. As a result we are completely streamlining the supply chain from order through delivery. Besides improving our response time and increasing productivity, this will help employees rethink how operations should be run.”

Well, this earthquake certainly got Rinken’s OEM customers to rethink how operations should be run. In fact several of them sent people to the Rinken site to help them get back up to speed. Toyota alone sent 400 people. One thing that won’t be rethought, however, is this industry’s devotion to lean operations.

Toyota President Katsuaki Watanabe was quoted far and wide, saying “We’ve been implementing this strategy for decades … and we’ll keep on with it.”

A TMC spokesman on the U.S. side did tell me, however, that his company will take another look at how it sources components.

“We’ll now closely examine how we buy parts from multiple suppliers and from which locations,” he said. “Whether it’s in Japan, North America, or Europe, any time there’s a problem we take proper counter measures. This allows us to reexamine how we’re buying parts here in North America from overseas.”

TMC’s North American operations procure 75 percent of their parts locally; the rest come from imports. The spokesman said occurrences like earthquakes inspire them to go back to the drawing board and take another look at their strategies. In situations like this, an inventory manager must ask:

• What’s the tradeoff between risk management procedures and a lean supply chain?
• Does lean make you more vulnerable to supply disruptions?
• Should I have multiple sources of supply and, guided by the right software, position inventory in strategic locations to buffer against such disruptions?
• Does it make sense to have carriers bid on alternate routes in case of a port or infrastructure disruption?

Your drawing board awaits.