A malfunction that shut down all of Toyota Motor's assembly plants in Japan for about a day last week occurred because some servers used to process parts orders became unavailable after maintenance procedures, the company said.
I work in a manufacturing company that was owned by the founder for 50 years until about 4 years ago when he retired. He disagreed with a lot of the ideas behind lean manufacturing so we had like 5 years worth of inventory sitting in our warehouse.
When the new management came in, there was a lot of squawking about inefficiency, how wasteful it was to keep so much raw material on the shelf, and how we absolutely needed to sell it off or get rid of it.
Then a funny little thing happened in 2020.
Suddenly, we were the only company in our industry still churning out product. Other companies were calling us, desperate to buy our products or even just our raw material. We saw MASSIVE growth the next two years and came out of the pandemic better than ever. And it was mostly thanks to the old owners view that “Just In Time” manufacturing was BS.
Cool story, but a once every 150 years pandemic is hardly a good reason to keep wasting money on storing stuff. A fire or a flood was much more likely to wipe it all out in 50 years.
Even in your anecdote the owner never actually benefited from the extra costs.
Depending on what you’re producing costs to maintain extra inventory of raw materials can be massive and for the company the size of Toyota, multiply that by million.
I work in a manufacturing company that was owned by the founder for 50 years until about 4 years ago when he retired. He disagreed with a lot of the ideas behind lean manufacturing so we had like 5 years worth of inventory sitting in our warehouse.
When the new management came in, there was a lot of squawking about inefficiency, how wasteful it was to keep so much raw material on the shelf, and how we absolutely needed to sell it off or get rid of it.
Then a funny little thing happened in 2020.
Suddenly, we were the only company in our industry still churning out product. Other companies were calling us, desperate to buy our products or even just our raw material. We saw MASSIVE growth the next two years and came out of the pandemic better than ever. And it was mostly thanks to the old owners view that “Just In Time” manufacturing was BS.
Cool story, but a once every 150 years pandemic is hardly a good reason to keep wasting money on storing stuff. A fire or a flood was much more likely to wipe it all out in 50 years.
Even in your anecdote the owner never actually benefited from the extra costs.
Depending on what you’re producing costs to maintain extra inventory of raw materials can be massive and for the company the size of Toyota, multiply that by million.
You’re not wrong, but the real answer is somewhere in between.