The theory, and the reason Toyota get studied, is that having no buffers means no waste and overall better production. The plastic doohickey supplier is producing plastic doohickeys at an optimal rate, and when supply stops everything stops. The problem is immediately apparent, and all eyes immediately available to fix the problem because all work has stopped. The alternative is a buffer. The plastic doohickey supplier needs to be able to produce plastic doohickeys at a faster rate than Toyota can consume them, to build up that buffer in the first place and to replenish it when problems occur. This extra capacity makes plastic doohickeys more expensive, both because of the excess production capacity and storage logistics. Many believe, including Toyota, that this thinking is the key to their success. It certainly requires good risk management though, identifying points of failure that will just shut down production for a short while vs. points of failure that risk destroying the company (say, a fire in a unique chip manufacturing plant that could take years to rebuild). See Toyota Production System or Lean Manufacturing.

It's tricky going from an engineering mindset to risk management. I still struggle with it and have been in the industry for a long time. You can't falsify risks and many of your inputs are going to be guesses based on an amalgam of experience, historical information, trends and available risk/threat models.

Today there's all of these metrics available that give it the feel of an exact science, but its not. It's educated guesswork, but there's enough evidence showing it works that its worth substantially increasing the costs and friction of doing business to align with its outputs.

Usually.

In this case something arguably failed in the process. It's noteworthy but it's not an existential threat to Toyota. They will learn from it, someone's probably going to 'seek opportunities outside the firm' and they'll get back to making great products.