Toyota Motor (7203.T) found itself in the midst of a gripping production saga as it grappled with a sudden and unexpected setback. The heart of Toyota’s renowned lean manufacturing, the very core of its production prowess, was thrust into darkness when a computer system, responsible for processing vital orders for vehicle parts, abruptly malfunctioned.
This dire glitch sent shockwaves through the sprawling automotive empire, resulting in the forced closure of not one, not two, but 14 of its highly efficient assembly plants. Toyota, the harbinger of inventory reduction and production efficiency, suddenly found itself at the mercy of this unforeseen predicament.
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Behind the scenes of the production halt
Rumours whispered that this catastrophic outage was born during an innocuous system update. The specifics remained shrouded in mystery, as Toyota offered no explicit details, except for one resolute assertion: this was not the work of malevolent cyber forces.
Flashbacks to a hauntingly similar incident a year prior haunted the collective memory. In an eerie echo of the past, the same 14 factories had been silenced, their assembly lines stilled, due to a cyber-threat that had penetrated the fortress. Kojima Industries, a supplier entrusted with the lifeblood of plastic and electronic components, had fallen prey to a viral menace bearing a menacing message, casting a shadow of doubt over Japan’s cyber-security preparedness.
For Toyota, this setback was not merely an inconvenience. It came at a time when the gears of production had been meticulously tuned for recovery. A 29% surge in domestic output during the first half of the year, a two-year record-breaking feat, had signalled a renaissance. Toyota’s assembly lines hummed with activity, churning out a spectrum of vehicles, from the modest Yaris to the opulent Lexus.
Japan bore witness to this production juggernaut, responsible for a third of Toyota’s global output, churning out a staggering 13,500 vehicles daily. Extrapolating from Toyota’s quarterly financial data, each day’s cessation at these 14 dormant plants translated into a jaw-dropping $356 million in potential revenue, a climax of economic consequence.
Cyber shadows loom large
The corridors of power are stirred as government ministers closely monitor the unfolding incident. While the giants of the corporate world have fortified their digital ramparts, the government’s watchful gaze is fixed upon the vulnerabilities of smaller subcontractors, a concern articulated by Industry Minister Koichi Hagiuda. The spotlight on cybersecurity reveals a stark reality – even in the age of technological prowess, the tendrils of vulnerability extend beyond the purview of behemoths.
A growing increase of reports points towards the malevolent spectre of Emotet, a potent strain of malware that has stealthily insinuated itself into the digital landscape since the early days of February. As Japan Computer Emergency Response Team/Coordination Center (JPCERT/CC) unveils the rise of Emotet, the air becomes thick with the anticipation of its next move.
Emotet, a harbinger of digital chaos, infiltrates the defences of unsuspecting victims, securing a foothold for its malicious comrades. Among its sinister arsenal lie tools designed to pilfer banking passwords, or the ruthless ransomware that ensnares computers, holding them hostage until a ransom is paid. This insidious force’s hand is suspected, but the curtain shrouding its involvement remains drawn.
In this unfolding narrative, a pivotal player emerges – Kojima Industries, a solitary supplier to Toyota, bearing the weight of being both a top-tier provider for certain parts and a second-tier supplier for others. The intricate interplay of this single company illuminates the broader backdrop of Toyota’s supply chain, which sprawls across four tiers and engages a staggering 60,000 entities.
The symphony of Toyota’s operations, though temporarily silenced, shall rise again, thanks to the lifeline of a backup network linking the company and its beleaguered supplier. However, this resumption of the melodic hum of assembly will be the precursor to a more intricate restoration, one that shall require a week or two to fully exorcise the spectre of disruption.
As the narrative of cyber threats continues to weave its tapestry, echoes of previous chapters resonate. In November 2020, the realm of video games bore witness to its own saga of compromise, as Capcom, the progenitor of games like Resident Evil, faced the grim spectre of a ransomware attack. The shadows of vulnerability, it seems, dance across industries.
This is a song not exclusive to Toyota, for even Honda Motor, another titan of the automotive world, succumbed to the siren call of a suspected cyberattack. In the tremors of June 2020, the machinery of production was temporarily stilled as the tendrils of digital malice touched its heart.
The countdown begins for production reawakening in Japan
Resuming its operations with a determined stride, Toyota emerges from a 24-hour interruption that disrupted the symphony of its finely-tuned supply chain. The colossal automaker, reigning supreme in global sales, disclosed that the beating heart of its 14 Japanese vehicle factories had come to an unexpected halt. This orchestrated pause was ignited by a perplexing malfunction that birthed on a fateful Monday, growing into a disruptive force that prevented the seamless processing of orders for crucial automotive components.
A new dawn ushers forth with Toyota’s assurance that production shall regain its rhythm. With the advent of the second shift on Wednesday, the 14 factories are poised to return to their harmonious assembly lines, aiming to restore the symphony of production that the world has come to expect from this automotive titan.
Dismissing the spectre of a cyber-attack, Toyota has embarked on a journey of investigation to unearth the true source of this confounding disruption. Amidst this quest for answers, Toyota extends a heartfelt apology to its constellation of stakeholders – customers, suppliers, and all affected parties – for the inconveniences spawned by this temporary cessation.
In the grand automotive tapestry, Toyota’s annual delivery of nearly 10.5 million cars in the previous year stands as a testament to its prowess. This statistic is a resounding crescendo when compared to Volkswagen’s 8.3 million vehicles, which contend for the global sales throne.
The shadows of the past loom as memories of a previous cyber siege resurface. In a parallel chapter, a supplier’s vulnerability became a chink in Toyota’s armour, silencing the machinery for a day. Restarting after a cyber-strike, Toyota’s sprawling factories become the theatre of questions, mirroring a broader concern in Japan’s corporate landscape. Cyber-security, a newfound pillar of apprehension, echoes through the corridors of power, exposing the fragility of an industry built on intricate connections.
Amidst this intricate ballet, Toyota’s production lines are rekindled, ready to paint the canvas of industry anew. As the machinery roars back to life across the 14 plants, each idle day’s toll of around 13,000 vehicles stirs the consciousness of Toyota and the industry at large.
Toyota’s test of resilience
Amidst its pursuit to revamp its stance on electric vehicles, with an eye on the formidable Tesla (TSLA.O), Toyota was not impervious to instances of public stumble. April brought forth the revelation that Toyota affiliate Daihatsu had manipulated a crucial aspect of side-collision safety tests for approximately 88,000 small cars, a significant portion of which bore the Toyota emblem.
In a subsequent May confession, Toyota found itself grappling with another breach, this time not of physical safety but of digital security. An inadvertent misconfiguration of a cloud-based system designed for service tracking led to the unintended exposure of customer data for over 2 million Toyota owners. This inadvertent vulnerability underscored the complexities of managing modern technological systems, even for a manufacturing titan like Toyota.
In this grand narrative of innovation, missteps, and adaptation, Toyota’s saga continues to unfold, a testament to the intricacies of modern industrial leadership.
Decoding Toyota’s production and supplier management strategy
The very foundation of modern auto assembly owes its existence to Toyota’s revolutionary “kanban” system, a paradigm-shifting approach to orchestrating the intricate dance of parts and components. This ingenious system, akin to a conductor guiding an orchestra, notified suppliers of the precise parts required, their destinations, and the timing of their arrival, all orchestrated with meticulous precision to minimize the burden of inventory.
The moniker ‘kanban’, a term meaning “signboard” in Japanese, carries with it the weight of innovation. The mastermind behind this transformative concept was none other than Toyota’s luminary engineer turned executive, Taichi Ono. Surprisingly, his muse was an American supermarket chain named Piggly Wiggly, where he witnessed the art of shelf stock management during a voyage to the United States in the 1950s. From this unlikely inspiration emerged a manufacturing revolution that rippled far beyond the realm of automobiles.
Toyota’s manufacturing ethos, epitomized by its lean production and just-in-time parts delivery, has transcended industry boundaries, permeating the fabric of the automotive world and beyond. This approach, heralded for its efficiency, agility, and waste reduction, was not content with mere printed cards managing supplier workflows. More than two decades ago, it metamorphosed into the ‘e-kanban’ system, ushering in a new era of internet-powered orchestration.
This iconic ‘kanban’ system, relying on the elegance of visual cues to choreograph complex workflows, has cast its influence far and wide. Its principles have been embraced by a multitude of sectors, even extending into the realm of software development.