Just-in-time auto manufacturing is having a rough time
The Hustle

Just-in-time auto manufacturing is having a rough time

Auto manufacturers use just-in-time manufacturing to run their assembly lines. But nothing is running on time.

In 1913, Ford launched the assembly line to great success on one basic premise: Never stop churnin ’em out.

Unfortunately, the past year has highlighted the line’s fatal flaw: If even a single screw is out of stock, everything has to be turned off.

First, a brief history lesson

With just-in-time manufacturing, supplies show up just as needed to save on space and costs.

Just-in-time manufacturing developed over decades:

It’s a great system for when things go as planned.

Problem is, nothing seems to be going as planned

In the last few months, the auto world has taken one helluva beating:

Ford, for example, could see a 50% production hit and miss out on $2.5B in profits.

Companies are working to improve by stockpiling inventory, building vertically integrated supply chains, and, in the case of Tesla, signing exclusive deals for access to raw materials.

If anything, this whole ordeal has been a stark reminder for the auto biz not to put all their eggs in one basket.

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