The pioneer of the “lean production system” now used by most manufacturers, Toyota Motor, is feeling the pinch from a supply shortage after a gas tank explosion and fire suspended operations at a plant of its main steel supplier, Reuters reported.
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The news agency said Japan’s top car maker has earned a reputation as one of the world’s most efficient manufacturers thanks to its famed “just in time” production system of holding only enough parts to meet actual orders, but the same leanness backfires when parts supply falls prey to unexpected disruptions, and analysts reportedly said Toyota may need to make some adjustments for future security.
On Monday there was another major fire in Japan, this time at a plant belonging to tyre maker Bridgestone, Reuters added.
The report said Toyota procures most of its parts from two or more different plants to avoid such hiccups, but the strategy isn’t foolproof, as the company learned from last week’s accident at Nippon Steel’s plant in the central Japan city of Nagoya.
“With steel it’s different. They’re much more choosy about this key material so this is a very rare case,” Credit Suisse First Boston analyst Koji Endo told Reuters. “This is a first for Toyota so I imagine they are at a loss on what to do at the moment.”
Because Toyota has a policy of buying most parts only on approving the maker’s production line, Endo reportedly said it may have to become more flexible and approving more supply lines for steel products was one option.
According to Reuters, Mitsubishi Motors said on Monday it will procure enough metal from Nippon Steel’s other plants to keep its lines rolling on schedule for the rest of the week – it had initially considered buying the metal from other makers such as Sumitomo Metal Industries and Kobe Steel.
Meanwhile, Reuters added, Toyota cancelled all overtime work on vehicles on Monday except for its new Prius hybrid – its five vehicle plants around Nagoya, where the accident occurred, will run on schedule on Tuesday but the plan beyond that is up in the air.
Senior Toyota spokesman Tetsuo Kitagawa told Reuters procuring steel from Nippon Steel’s other plants or from other makers – as suggested by Nippon Steel – was a possibility, but it would take time.
“Steel is one of a car’s most expensive parts and can affect safety greatly, so we naturally pay a lot of attention to quality,” he told Reuters, adding: “If we decide to procure from other plants, it would be after making sure all our strict requests are met.”
