Toyota Lost More Cars To The Thai Flood Than To The Tsunami
Today, I heard at Toyota’s October-December results conference that TMC lost 240,000 unmade (and some made) cars to the Thai flood. After the conference, I asked Toyota spokesman Dion Corbett how many cars Toyota had lost to the tsunami.
I expected a bit less than a million. To my surprise, Corbett said: “150,000.”
I could not believe it. And I spent the rest of the day twisting arms until I knew how that happened.
Units lost to tsunami
Apr-Jun ’11Jul-Sep ’11Oct ’11 – March ’12Fiscal Year BalanceJune ’11 forecast-800,000350,000-450,000Feb ’12 status-760,000120,000490,000-150,000Units lost to Thai flood
Oct – Dec ’11Jan-Mar ’11Fiscal Year BalanceDec ’11 forecast-260,00030,000-230,000Feb ’12 status-280,00040,000-240,000These tables, in their boring Excel self, are a document of resilience, they prove that world events often defy logic, and can destroy the best laid plans.
In June 2011, three months after the March 11 tsunami, Toyota was scrambling for parts. The company projected that it would lose 800,000 units by the end of June, and maybe produce 350,000 more than planned in the months before March 2012, to end the fiscal with a shortfall of 450,000 units.
In the line below, you see what really happened. By the end of June, the shortfall stood at only 760,000. The company could restart production faster than thought, could make 120,000 more cars than planned before October 2011, and then was able to accelerate production to produce 490,000 units over plan before the end of the fiscal year. Result: Only 150,000 units below plan.
Then, the Thai flood ruined the best laid plans.
In December, it looked like 260,000 cars would be lost to the Thai flood, and 30,000 could be made more before the end of the fiscal.
No miracle this time.
By the end of the fiscal, Toyota will have made a total of 390,000 cars below plan, and will be hit worse by a flood that many perceived as a side-show. Of course, this has everything to do with the fact that the flood fell into the later part of the year. But such is life when the year ends and one has to look at the bottom line.
Speaking of the bottom line, my contacts tell me that the financial losses caused by the tsunami were greater
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Good grief; I hadn't seen that video before. What a difference a few feet of elevation make. As for Toyota, it's hard to imagine what 390k worth of car shortfall looks like. But this video give a sense of it.
That should be object lesson #1 for anyone wanting to outsource manufacturing to a developing country. A developing country does not have the infrastructure or resilience to quickly recover from a disaster. Nor, in the csase of the Thailand floods, the wherewithal to prevent a disaster in the first place.