Toyota’s global car recall challenges supply chain systems
1 min read
In the immediate aftermath of Toyota's announcement that it needs to recall 1.7 million cars worldwide over fuel leak concerns, IT pundits are pointing to the likely strain on the car maker's supply chain.
Antony Bourne, global industry director at IFS, believes the recall will be a logistical nightmare. "Toyota's internal distribution and logistics machine will be in overdrive now getting a handle on the implications this recall will have on its vast, complex, global supply chain," he explains.
"The job isn't just getting the nearly 1.7 million cars to dealers around the world for repairs. The huge challenge ahead also includes notifying car owners, sourcing materials for new parts, manufacturing new parts that weren't planned, employing new staff to make the parts, managing the distribution of these parts, and storing them. All of this work has to be done immediately, and must be tightly controlled to contain costs."
Given that automotive manufacturers operate according to lean manufacturing methodologies, where stock is manufactured only to the pull of demand, and with only small quantities of spares, one can only wonder at the scale of upheaval.
"Toyota will have to rely heavily on the IT systems supporting its supply chain to successfully execute this recall – to, among many other things, track down owners, contact dealers, trace spare parts, manufacture parts, manage distribution and verify that repairs have been made," hazards Bourne.
"The accuracy, integration, flexibility and speed of these systems will be sorely tested in the coming weeks and months, as will Toyota's agility as a business. If IT systems are up to scratch, and if management has planned meticulously for such an event, then this recall may only amount to a very painful and costly process, and not a complete disaster," he continues.
"The fact is, however, that these things shouldn't happen. Advances in technologies, like ERP, mean that there are ample quality control tools available to ensure the right checking is done at the right time in the manufacturing process.
"The string of automotive recalls by various manufacturers over the past 12 months indicates that something is missing in the quality control aspect of the supply chain, and suggests that manufacturers need to review their IT systems and business processes."
