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AUTOMOTIVE INSIGHT
WHEN LEAN
BECOMES BRITTLE
The systems designed to speed up automotive manufacturing are now making it more fragile. Understanding
why is the first step to adapting.
For years, automotive manufacturing has been
built on a single principle: efficiency above all
else. Lean systems, just-in-time delivery and
tightly controlled supply chains have allowed
manufacturers to reduce waste, minimise
inventory and operate at remarkable speed. In
stable conditions, the model works.
But those conditions are no longer stable.
And the same systems that deliver efficiency
under normal circumstances can create acute
vulnerability when those circumstances shift.
The illusion of control
Just-in-time supply was designed to eliminate
excess. Materials arrive when needed, not
before. Inventory is reduced, storage costs fall,
and cash is not tied up in stock. The assumption
underpinning all of this is consistency – suppliers
deliver on time, transport flows as expected,
and demand is predictable.
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That assumption has been tested repeatedly in
recent years. When the global semiconductor
shortage took hold from 2021 onwards,
manufacturers found that a component costing
a few pounds could halt the production of
a vehicle worth tens of thousands. Ford,
Volkswagen and Toyota all cut output
significantly – not because of broad systemic
failure, but because just-in-time left almost no
buffer when a single supply stream ran dry.
“ Just-in-time does not
remove risk.
It concentrates it ”
When everything is aligned, the system is
efficient. When it is not, there is very little
margin for recovery.
A single ship, a global
standstill
The semiconductor shortage was a slow-build
crisis. The blockage of the Suez Canal in March
2021 was the opposite – a single event, lasting
six days, that disrupted an estimated 12% of
global trade. For automotive manufacturers
reliant on components routed through that
corridor, it exposed just how little redundancy
existed in their supply chains.
Neither event was unforeseeable in type, only
in timing. And therein lies the problem. Supply
chains are now global and interconnected to a
degree that makes them highly efficient under
normal conditions and highly susceptible under
abnormal ones. A disruption in one location
can affect production thousands of miles away,
often in ways that are difficult to trace until the
impact is already being felt on the line.
