Implications of the Tohoku earthquake for Toyota׳s coordination mechanism: Supply chain disruption of automotive semiconductors

The 2011 Tohoku Earthquake damaged severely and extensively a large geographical area and caused devastating disruptions to the industrial supply chains in Japan. This paper focuses on a case of supply disruption of the automotive microcontroller units, which were produced by Renesas Electronics and supplied to Toyota via its first tier vendors like Denso. The first purpose of this paper is to describe, from a supply chain management view point, what happened and what actions these companies took, and to understand why it took three months for Toyota to recover to its pre-earthquake production level. Since many things happened, we apply a framework of SCM hierarchy to analyze the issues from the perspective of execution, design, strategy and sustainability. The second purpose is to identify based on this case analysis what functions are missing in the supply chain coordination mechanism of Toyota Production System, where the coordination is propagating from Toyota to upstream suppliers through the close interaction between the successive layers of its multi-layered supplier network. This case analysis implies that direct control functions need to be added to alleviate the disruption risk and secure the supply of key parts and materials. The third purpose of this paper is to show by presenting a detailed case analysis that the underlying characteristics of supply chain structure and infrastructure should be linked with the resilience tactics adopted.