Toyota Broke Its Just-in-Time Rule Just in Time for the Chip Shortage
The carmaker pioneered the ultra-efficient manufacturing policy but inventories have crept up opportunely for a global semiconductor deficit.
A car is the sum of all of its parts.
Photographer: Yen Duong/BloombergThe world’s largest carmaker doesn't have a chip-shortage problem.
In contrast to the rest of the auto industry, Japan’s Toyota Motor Corp. said on Feb. 10 it wasn’t expecting a shortfall of semiconductors to affect its production. In the company’s earnings call, Chief Financial Officer Kenta Kon said that as part of its business continuity plans, Toyota — which makes more than 10 million cars a year — had secured “one to four months of stocks as necessary” for various components. As its operating profits surged, it raised its earnings forecast by over 50%. (On Tuesday, the company said it will partially halt 14 production lines at nine plants because of disruptions to suppliers resulting from the Feb. 13 earthquake off the coast of Japan. The pauses range from two to four days.)