Explainer: What occurred to the closure of Toyota manufacturing in Japan? -Portal

Toyota Motor Corp.'s Motomachi plant, which has ceased operations, is pictured in Toyota

Toyota Motor Corp.’s Motomachi Plant, which has ceased operations, is pictured in Toyota, Aichi Prefecture, Japan, on this photograph taken by Kyodo on August 29, 2023. Necessary credit score: Kyodo/through Portal purchase license rights

Aug 30 (Portal) – Toyota Motor (7203.T) scaled again manufacturing at its Japan-based factories on Wednesday after a pc system used to course of orders for automobile elements failed on Tuesday, forcing the closure of 14 meeting vegetation.

The disruption crippled a system on the core of Toyota’s lean manufacturing, a technique for decreasing stock and maximizing manufacturing efficiencies that the Japanese automaker pioneered and that its opponents have extensively adopted.

How did a system error happen that paralyzed manufacturing?

Two individuals conversant in the matter stated the outage occurred throughout a system replace. Toyota didn’t present particulars on what went improper, merely stating that the trigger was not a cyberattack.

In February final 12 months, Toyota was additionally compelled to shut the identical 14 factories when one among its suppliers, Kojima Industries, which provides plastic elements and digital elements, stated one among its file servers had been contaminated with a virus containing an unknown threatening message.

This assault raised questions concerning the cybersecurity of Japan’s provide chains.

What are the consequences of a one-day manufacturing loss?

Toyota’s manufacturing has recovered this 12 months, so the outage might doubtlessly be extra expensive than the shutdown in 2022.

Toyota’s home manufacturing rose 29% within the first half of this 12 months, its first such improve in two years. Toyota produces a full vary of autos in Japan, from the price range Yaris to the most costly fashions, together with luxurious vehicles beneath the Lexus model.

Toyota’s manufacturing in Japan – a few third of world manufacturing – averaged about 13,500 autos per day within the first half of the 12 months, in line with Portal calculations. This doesn’t apply to autos from the group automobile producers Daihatsu and Hino.

The typical world automobile gross sales value was $26,384 final quarter, in line with monetary studies. Utilizing that as an approximation, a full day of manufacturing throughout the 14 vegetation would equate to $356 million in gross sales.

Toyota hasn’t stated how or whether or not it plans to make up for misplaced manufacturing.

WHAT IS TOYOTA’S PRODUCTION AND SUPPLIER MANAGEMENT SYSTEM?

Toyota primarily invented fashionable automotive meeting with its “Kanban” system to tell suppliers what elements are wanted, when and the place to attenuate stock.

“Kanban” means protect in Japanese, and Toyota engineer and later govt Taichi Ono, who developed the system, was impressed by watching an American grocery store chain, Piggly Wiggly, on a visit to the USA within the Fifties managed their shelf shares.

Toyota’s system of lean manufacturing and just-in-time elements supply has been adopted and extensively studied all through the automotive trade. Greater than 20 years in the past, it moved from a system of printed playing cards that managed provider workflow to an internet-based “e-Kanban” system.

Toyota’s Kanban system, which depends on easy visible cues to prepare workflows, has been adopted by different industries, together with software program growth.

What different issues has Toyota confronted s
ince its management change?

Koji Sato succeeded Toyota Chairman Akio Toyoda as CEO in April. Though the corporate has been making an attempt in current months to overtake its strategy to electrical autos and the manufacturing challenges related to U.S. electrical automobile chief Tesla (TSLA.O), it has additionally reported some embarrassing missteps.

In April, Toyota subsidiary Daihatsu stated it had tampered with a part of the door throughout side-impact security checks on about 88,000 small vehicles, most of which have been offered beneath the Toyota model.

In Might, it stated the corporate inadvertently uncovered buyer knowledge for greater than two million Toyota homeowners on-line as a result of it made a mistake in configuring a cloud-based service monitoring system.

Reporting by Daniel Leussink, Maki Shiraki and Satoshi Sugiyama; Writing by Kevin Krolicki; Edited by Christopher Cushing and David Holmes

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