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Managing Supply Chain Risk and Standardizing Parts

partsToyota has recently scaled back development of custom parts in its various car models, which should cut time and cost for creating new car models by as much as 30 percent. It sounds like a great move, and in many ways it is, but Marty Lariviere reflects on the positive and negative implications of this decision in a blog post. Decreased part complexity means more facilities globally will be capable of producing the parts, which will protect Toyota from shortages in the future in the case that more natural disasters strike their local facilities. However, since these auxiliary global facilities are more likely to be fitting the needs of more than one manufacturer, Toyota’s customer needs will likely not be at the top of the facilities’ priority list. Another concern regarding this shift toward more standardized parts is that, although overall development time and cost will drop significantly, it means that the repercussions will be exponentially more severe if there is a product recall. An expensive recall could become an extremely expensive recall in this way. On the whole though, it seems like streamlining production will be good for the long-term health of the company. Risk is just an inescapable part of progress.

About John Friscia

John Friscia is the Editor of Computer Aid’s Accelerating IT Success. He began working for Computer Aid, Inc. in 2013 and continues to provide graphic design support for AITS. He graduated summa cum laude from Shippensburg University with a B.A. in English.

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