What Japan Tsunami taught lean experts?

Questions were popping up after the massive tsunami hit the Japan on the reliability of the lean systems. Many people, including lean experts had their say on the subject. One of the common areas all the critiques comment on is the high vulnerability of the lean supply chain to a disaster.  Even if the manufacturer doesn’t suffer, if the supplier does, then the manufacturer will have to eventually stop his production. Yes, there can be contingency plans in place. But still it is a bigger risk. Any risk for your supplier is a risk for you. Even a single day delay from one of your key supplier, will eventually bring you in to a halt. This is what exactly happened after the Japanese tsunami. Production is still not into full capacity in Toyota, and the full output is expected only in the early June. This is scary, regardless of whether you follow lean or not.

But the truth of the matter is, lean is not disaster proofed. It is vulnerable to any disaster just like any other system would be, or even sometimes little more. But let’s not forget the problems your system face if it runs the non-lean way.

When the system is not lean, you obviously will not be tightly coupled to your supply chain as you would do in a lean scenario.  You may be able to go on for weeks, even if you do not get anything from your suppliers. What this means is you have this stock in-house. In case of a disaster, you will do much damage as your entire inventory will be destroyed. But one positive is, if you have stocks to work with, you will not be halted by the problems hit your supplying means. For an example, if your ports are damaged, you will not suffer, but only if you or your supplier is hit, you will suffer.

This goes to show, each system has its own share of risk, depending on the disaster they face. But the truth is, while we plan for the possibilities, we should work on probabilities. Not every day there will be a tsunami. But lean brings you savings, efficiencies and improvements every day. Probably, when you select the suppliers, you may go for a tight geographical grouping to avoid the associated risks. Or you may find a way to keep your operations going with some other means. Just another possibility for improvement.

But for me the most important lesson taught by this event was the fact that nature is very powerful, and we must respect it.