1997 Aisin fire

The fire broke out before dawn on February 1, 1997 at Factory No. 10 of Aisin Seiki Co. in Kariya, Japan. Approximately 99% of Toyota's P-valves were mmanufactured at this plant, with the remaining 1% produced by Nissin Kogyo Co. Production of P-valves was complex, requiring specialised tooling, and multiple variants of the componant were manufactured simultaneously. With the factory out of production, it was estimated that Toyota would have to halt car production for weeks. The economic impact of this would have been huge for Toyota, the local economy and for Japan. It was estimated that each day Toyota production was halted would lead to a 0.1% decrease in Japan's industrial output. ==Recovery==

Aisin, along with Toyota, set up a crisis room to deal with the problem of manufacturing new P-valves. Toyota managed to get many of its suppliers to bring in additional engineers, and work overtime shifts, to help build machines to produce P-valves, as well as increase production of the components. Some of Toyota's suppliers, and their subcontractors, were persuaded to give priority to the production of P-valves. Even a sewing machine manufacturer was persuaded to help provide valves for Toyota. The first usable valves were delivered to Toyota on the Wednesday (February 5) following the fire, allowing production of cars to resume. While observers initially predicted that Toyota would have to halt production for weeks, the incident ultimately set Toyota's production back only five days. ==Lessons from the fire==

The fire and the subsequent production crisis held many lessons for Toyota. It showed them that their implementation of the Just In Time production system worked, and that they had "the right balance of efficiency and risk". Toyota also learned to reduce the number of variations in its parts to make production easier as well as to reduce risk. Toyota's suppliers also had the benefit of increasing efficiency in their production as well as learning the lessons of building redundancy into their production methods. The efficiency with which production was re-established also showed the value of the Japanese keiretsu system, where businesses have "interlocking" relationships with each other. The loyalty shown by Toyota's suppliers to the company showed it the value of long-term business relationships: the suppliers reportedly did not ask what they would be paid for rushing out the valves; Aisin and Toyota later reimbursed them for the work, including the valves, overtime and re-tooling of their machines, as well as providing a $100 million bonus to the suppliers involved. ==See also==