Toyota outsmarts automakers in Just-In-Time manufacturing

ssun30

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Toyota invented JIT manufacturing, which also means they are very aware of the risks of lean inventory: namely poor resistance to supply chain shocks.

As the world automobile industry suffers greatly from the chip shortage and shut down lines, Toyota actually increased its forecast for its annual production target and does not expect a chip shortage due to Renesas moving production back to domestic plants (instead of outsourcing to TSMC).

This article incorrectly attributed the success to them going against their JIT philosophy. However, what really happened was Toyota built a very resistant supply chain after the 2011 Tohoku Earthquake nearly brought the company down for 3 months. That is part of the TNGA system (it's way more than 'shared platform'). The increasing inventory level is to counter the potential impact of a major natural disaster and it helped them stay profitable and operational during the pandemic.