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.

Part $3$

$"$The JIT model is designed for$$ supply$-$chain efficiencies and economies of$$ scale," says$$ Nissan's CEO.$$ "The repercussions of an unprecedented crisis like Covid highlight the fragility of our$$ supply$-$chain model."

The basic idea of$$ JIT, as explained in Chapter$16,$ is avoiding waste. By having suppliers deliver parts to the assembly line shortly before they go into a$$ 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.

Part $4$

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$$ parts, the antithesis of JIT. After the $2011$ earthquake in Japan hit many Toyota$$ suppliers, the company pushed them to disclose who sells them their components. Over$$ time, Toyota built a database that covers$400,000$ items and reaches as far as $10$ tiers down.

Part $5$

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$400,000$ parts for the $100$ models in its lineup of brandsdashand $95\%$ of those parts come from a single source.

$$Source: The Wall Street Journal$($May $4,2021).$

Part $6$

Critical Thinking Questions

$1.$ The$$ just$-$in$-$time model is

A$.$

is unrelated to the concept of using single suppliers for parts.

B$.$

as secure as it was a half century ago.

C$.$

intended to force suppliers to deliver parts hourly.

D$.$

hyper efficient during times of no disruption.

E$.$

exhibiting weaknesses resulting from COVID issues.

Part $7$

$2.$ 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$$ gas$-$powered cars.