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Putting the Brakes on JIT Toyota is stockpiling four months of some parts. Volkswagen is building six factories so it can get its own batteries.
Putting the Brakes on JIT
Toyota is stockpiling four months of some parts. Volkswagen is building six factories so it can get its own batteries. And Tesla is trying to lock up access to raw materials.
Part
The hyper efficient auto supply chain symbolized by "just in time" is undergoing its biggest transformation in half a century, accelerated by the troubles car makers have suffered during the pandemic. After sudden swings in demand, freak weather, and a series of accidents, they are reassessing their basic assumption that they could always get the parts they needed when they needed them.
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The JIT model is designed for supplychain efficiencies and economies of scale," says Nissan's CEO. "The repercussions of an unprecedented crisis like Covid highlight the fragility of our supplychain model."
The basic idea of JIT, as explained in Chapter is avoiding waste. By having suppliers deliver parts to the assembly line shortly before they go into a vehicle, auto makers don't pay for what they don't use. They save on warehouses and the people to manage them. But as supply chains further globalize the system has grown brittle. The crises are more frequent.
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Auto makers don't want to replace JIT entirely, because the savings are too great. But they are moving to undo it to some degree, focusing on areas of greatest vulnerability such as irreplaceable semiconductors. Ironically, Toyota now asks its suppliers to stockpile parts, the antithesis of JIT. After the earthquake in Japan hit many Toyota suppliers, the company pushed them to disclose who sells them their components. Over time, Toyota built a database that covers items and reaches as far as tiers down.
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A sister idea to JIT was the use of single suppliers for many parts. These suppliers could master the daily dance of deliveries, cut costs through volume and service the global factory networks that the top car makers operate. Chrysler buys about parts for the models in its lineup of brandsand of those parts come from a single source.
Source: The Wall Street JournalMay
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Critical Thinking Questions
The justintime model is
A
hyper efficient during times of no disruption.
B
intended to force suppliers to deliver parts hourly.
C
is unrelated to the concept of using single suppliers for parts.
D
exhibiting weaknesses resulting from COVID issues.
E
as secure as it was a half century ago.
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Auto makers are
A
replacing JIT entirely.
B
becoming more brittle and drowning in losses
C
cooperating with each other to "lend" each other suppliers during disruptions.
D
asking suppliers to ignore JIT basics and stockpile parts.
E
building more manufacturing plants to increase output of gaspowered cars.
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