zzdcar
Home
/
Reviews
/
Culture
/
Toyota Prepared For The Chip Shortage Years Ago. Why Didn't Anyone Else?
Toyota Prepared For The Chip Shortage Years Ago. Why Didn't Anyone Else?-May 2024
2024-02-19 EST 22:12:22

Image for article titled Toyota Prepared For The Chip Shortage Years Ago. Why Didn't Anyone Else?

As the entire automotive industry continues reeling from a , many manufacturers have been forced to temporarily shut down production, or just go ahead and build cars without necessary components and store them until a later date. Not Toyota, though.

Toyota was prepared for the microchips to dry up. Not because it had a premonition that the pandemic was coming, but because it — along with the entire Japanese car industry — went through a similar ordeal after the devastating Tōhoku earthquake of 10 years ago. Except, unlike its peers, Toyota learned from that episode, and instituted policies that are allowing it to maintain a steady pace of production today. An article published Wednesday by explained the automaker’s inventory workflow:

Toyota asks its Tier 1 suppliers to input detailed information about their most obscure parts and materials providers in a complex database that it maintains. Using this system to glean information about, say, a single headlight Toyota purchases for one of its cars, it can get information as granular as the names and locations of the companies that make the materials that go into surface treatments used on those headlights’ lenses and even the producers of the lubricants used on the rubber pieces in the assembly, Toyota spokeswoman Shiori Hashimoto says.

These lines of communication alerted the company early on that it needed to stockpile chips. “The process of making semiconductors is complex, and the facilities used to create them are specialized,” Hashimoto says. “With that in mind we’ve needed to make sure there’s enough stock to cover a period of potential supply disruption.”

While most automakers keep lines of communications open with their Tier 1 and 2 suppliers, they generally don’t know what’s going on with their suppliers’ suppliers. This is where the first sign of a potential inventory crisis emerges, and what Toyota was attuned to pick up on before anyone else by keeping an eye on every step along the chain of production of a given part.

In the aftermath of the 2011 earthquake, Toyota’s primary plant went dark for three months. Parts were missing, and Toyota set on a mission to determine the most “at-risk items” for stockpiling, Bloomberg Businessweek reports. The result was a list of 1,500 components.

While Toyota’s seemingly been preparing for this eventuality for a decade, other companies in the field are scrambling to adapt as quickly as possible. One of those is Dana, the American firm known for manufacturing axles and driveshafts, among other parts. Like Toyota, Dana is building out its inventory management system; it’s also sourcing components from multiple suppliers at once, and asking some to hold a backlog of certain parts, according to an story published last week.

Like Toyota and Dana, everyone from small suppliers to established multinational automakers are exploring ways to untether themselves from the “just-in-time” approaches to production that have governed manufacturing up until recently. Nissan Chief Operating Officer Ashwani Gupta admitted to Bloomberg that it probably should’ve looked into that years ago:

“The semiconductor crisis is one that everyone in the world could have avoided,” Nissan Chief Operating Officer Ashwani Gupta says. The problem is many automotive companies didn’t rigorously manage their supply chains when it comes to Tier 3 or Tier 4 suppliers. “We often don’t know the risks down there,” he says. Nissan is now looking to improve its digital supply chain management tools. “Every expert is good at backward analysis,” Gupta says. “It’s harder to look forward. Nissan has learned from this.”

Critics argue that stockpiling will inevitably lead to more waste — though perhaps only if companies stockpile indiscriminately. It can only help Toyota to ascertain a better understanding of where the parts that comprise its parts are at any given moment, rather than simply expecting them to always be there and becoming surprised when they’re not. By that point, it’s already too late to do anything about the problem.

But it took a natural disaster to expose this flaw in Toyota’s supply chain management 10 years ago, while many of its rivals failed to correct as swiftly. The ongoing pandemic has produced a similar moment for the global automotive sector. The question this time around is: who will learn, and who won’t?

Comments
Welcome to zzdcar comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Culture
Every Alfa Romeo TZ Has A Story
Every Alfa Romeo TZ Has A Story
Only just over 100 Alfa Romeo Tubolare Zagatos were built, many of them were raced, and every single one of them has a story. This one might have a more interesting story than most, however, as it earned an SCCA regional championship with driver Nadine Brengle before it was...
May 22, 2026
The New Land Rover Defender Looks Slick As Hell In The Next Bond Movie
The New Land Rover Defender Looks Slick As Hell In The Next Bond Movie
There’s an ungodly amount of vehicles in the upcoming movie, , but out of all of them it seems like the new 2020 is going to get the most action. We’re finally starting to get some teases for the new Bond movie, and the latest is a clip of...
May 22, 2026
Hyundai's Committing $410 Million More To Make The Santa Cruz Compact Pickup Truck
Hyundai's Committing $410 Million More To Make The Santa Cruz Compact Pickup Truck
Remember the Santa Cruz compact pickup thing Hyundai trotted out at the 2015 Detroit Auto Show? The company’s executives do–because in spite of skepticism, it once again seems they’re still committed to making this mini truck a reality. We’ve had a few “yes it’s really happening” updates on this...
May 22, 2026
Matthew Good Band — 'Hello Time Bomb'
Matthew Good Band — 'Hello Time Bomb'
Traffic sucks, so why not start your morning off with some music? You provide the toast and we’ll provide the jams. “Everyone in Canada looked like this in the late 90s,” my husband says as he shows me this music video this morning, shaking his head in disgust. “You were,...
May 22, 2026
Mustang Mach-E: Ford's 'Mustang-Inspired' Electric Crossover Gets A Name
Mustang Mach-E: Ford's 'Mustang-Inspired' Electric Crossover Gets A Name
Ford has been saying its new is “Mustang-inspired” since last year’s . And with the official name, they really, really went there. The battery-powered performance crossover will be called the Ford Mustang Mach-E, complete with the pony logo and everything. It’s not so much “Mustang-inspired” as it is an...
May 22, 2026
There Was A Time When Ford Didn't Think The Mustang Brand Was Worth What A Fancy Truck Costs
There Was A Time When Ford Didn't Think The Mustang Brand Was Worth What A Fancy Truck Costs
How much do you think the Mustang brand identity is worth to Ford today? A hell of a lot, right? It’s a legit automotive icon, and the only non truck/crossover/SUV they’re still even willing to sell in America anymore, so you’d think it’s safe to say that the Mustang...
May 22, 2026
Copyright 2023-2026 - www.zzdcar.com All Rights Reserved