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BEIJING – A shortage of auto parts and other components after Japan’s earthquake has stirred unease about two pillars of manufacturing: the country’s role as a crucial link in the global supply chain and “just in time” production.
Manufacturers slashed costs by adopting Japanese-style small inventories and close links to a tight circle of suppliers. But that left them without a cushion of raw materials to ride out disruptions, forcing factories as far away as Louisiana to close when the March 11 quake and tsunami battered Japanese producers.
“There’s no question people are saying: Look, we may have gone too far. Let’s revisit this and do some different things about just-in-time,” said Jim Lawton, vice president of D&B Supply Management Solutions, a unit of Dun & Bradstreet Inc.
Companies can use more suppliers spread over more countries but that would mean they have less bargaining power to lower costs. Manufacturers may hold more inventories. That might mean higher prices for consumers.
Tsunami damage and power shortages that idled thousands of Japan’s factories highlighted its role as a key