Supply chain disruptions in Japan have forced at least one global automaker to delay the launch of two new models and are forcing other industries to shutter plants and rethink their logistical infrastructure, a media report on Wednesday said.
Toyota Motor said it would delay the launch in Japan of two new additions to the Prius line, a wagon and a minivan, from the originally planned end of April due to production disruptions from this month’s devastating earthquake, Reuters reported.
The automaker has suspended production at all of its 12 domestic assembly plants at least through 26 March and has estimated a production loss of 140,000 vehicles until then.
Toyota had said on 22 March there would be no vehicle production at any of its own or subsidiary’s plants until at least Sunday 27 March but added it had resumed production of replacement parts on 17 March and output of parts for overseas production (including KD kit components) on 21 March.
Honda said yesterday it would extend the suspension of production of finished units at Sayama and Suzuka (cars) and Kumamoto (motorcycles) from 23 to 27 March and would decide what happend from 28 March later.
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By GlobalData
“We still don’t know the full extent of what can be done to substitute the affected parts,” Honda Motor spokeswoman Natsuo Asanuma told Reuters.
Honda had said on Monday one-fifth of its Japan-based Tier 1 suppliers affected by the earthquake expected to take at least a week to recover. The automaker made 69,170 cars in January in Japan, accounting for around a quarter of its production.
Japanese companies are not only reeling from damage to factories and suppliers in quake-hit northeastern Japan, but are also suffering from fuel shortages nationwide and power outages in the Tokyo area that are affecting production, distribution and the ability of staff to get to work, the news agency noted.
Ford said on Wednesday it had felt no immediate impact or disruption from the earthquake in Japan this month.
“Right now, we have no immediate impact to our production in terms of our supply chain, but clearly you would expect us to be looking at that on a daily basis and we are … locally, regionally and globally,” Peter Fleet, the president of Ford ASEAN, told Reuters.
Suzuki Motor said its three car assembly factories in Japan will remain closed on Thursday and Friday, but they will operate an engine factory on those two days using parts already in inventory. The company said it has yet to decide on plans for next week.
Subaru maker Fuji Heavy Industries has said all five of its car and parts-related plants in Gunma prefecture, north of Tokyo, will be shut at least until Thursday. Production of vehicle parts for overseas manufacturing plants started today (Wednesday 23 March) while production of vehicle repair parts was scheduled to start on Thursday (24 March).
Meanwhile, Panasonic, which supplies infotainment and electronics parts, said on Wednesday that a factory making printed circuit board materials in Koriyama, northeast Japan, re-started Wednesday. Several other factories in the region remain closed, including one in Fukushima making optical pick-ups and one in Sendai assembling digital cameras and audio equipment. The company declined to give Reuters any details about other affected plants.
Renesas Electronics has restarted chip making operations at three earthquake-hit factories in Japan, a spokeswoman told the news agency. Operations at three other factories of the firm’s 22 plants in Japan remain suspended after the production restart at three plants located in Aomori and Yamagata prefectures in northern Japan.
Consultants Frost & Sullivan said the catastrophe had raised some big questions about the globalised supply chain and just-in-time manufacturing.
Echoing those comments on the global supply chain was Paul Kleindorfer, the Paul Dubrule Professor of Sustainable Development at the INSEAD business school in France.
The crisis would encourage more resilient and robust supply chains, he told Reuters.
“We’ll see greater attention paid to the finding of additional sources of supply, but those sources in other countries will face high hurdles because of the high quality of Japanese manufacturing and that’s not going to be easy to do in other countries in Asia. Japan will continue to occupy a special role along with South Korea and Taiwan.”
Kleindorfer also said all companies, not just in Japan, should use the crisis there as an opportunity to focus on selecting or “pre-qualifying” alternative sources of supply that they can rapidly switch to in case of a disaster.
Companies also need to invest in a “war room” infrastructure so that when a crisis happens, “they have the ability to respond and to ascertain and rehearse and switch and tell their customers and their boards what they can expect. It shouldn’t take a month to figure out what happened.”
Mitsubishi Motor on Wednesday said it would operate its Okazaki and Pajero Manufacturing Company (PMC) plants in Japan on Friday 25 March 2011 with production at Mizushima suspended. The status of all three plants after 26 March will be announced later.
As earlier announced, the automaker suspended all Japanese production today (23 March) and will operate only PMC on Thursday 24 March.
Mazda resumed “temporary production” at its two Japanese plants in Hiroshima and Hofu from 22 March but is only producing replacement parts, parts for overseas production and vehicles using “in-process inventories”.
Nissan’s last update, on 20 March, parts deliveries “will still take some time to be reestablished” so its plants, except for the Iwaki engine plant, would be only partially operational. Iwaki engine output restoration “is expected to take longer than the other plants” but there have since been reports the company might source V6 engines that Japanese plant makes from a plant in the US.
Nissan’s Oppama, Tochigi, Kyushu, Yokohama and Nissan Shatai plants resumed operations on Monday 21 March producing only parts for overseas manufacturing and replacement while vehicle production was planned to resume from Thursday 24 March though only “while inventory of supplies lasts”.
Additional reporting: Graeme Roberts
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