Why Did a Software Glitch Halt Toyota Production?
Toyota Motor, the world’s largest automaker, was forced to suspend operations at all 14 of its assembly plants in Japan last week due to a software glitch that prevented it from ordering parts from its suppliers.
The malfunction, which began in the morning and lasted until late afternoon, affected about a third of Toyota’s global production and caused an estimated output loss of tens of thousands of vehicles. The company said it was still investigating the cause of the problem, but ruled out the possibility of a cyberattack.
The incident highlighted the vulnerability of Toyota’s lean manufacturing system, which relies on just-in-time delivery of components to minimize inventory and costs. While the system has been widely adopted by the auto industry for its efficiency and flexibility, it also exposes the carmaker to unexpected disruptions in its supply chain.
Toyota has faced several challenges in its production this year, mainly due to the global shortage of semiconductors that has hit the auto industry hard. The company had to cut its output by about 40% in September due to the chip crunch, affecting its sales and market share.
The company also suffered a one-day halt in production last year when one of its suppliers was hit by a ransomware attack that affected its ability to order parts. Toyota was able to resume operations using a backup network, but still lost about 13,000 vehicles in output.
The software glitch on Tuesday was different from the previous incidents, as it affected Toyota’s own internal system that processes orders for parts from its suppliers. The company said it was not related to the semiconductor shortage or any external factors.
The glitch affected all 12 of Toyota’s domestic assembly plants, as well as two plants operated by its group companies, Toyota Industries and Hino Motors. The plants produce a range of models, from compact cars to trucks and buses, for both domestic and export markets.
The company said it was able to restore the system by late afternoon and resume some operations at some plants. It said it would try to make up for the lost production by adjusting its schedules and working overtime.
Toyota apologized to its customers, suppliers and stakeholders for the inconvenience caused by the glitch and said it would take measures to prevent a recurrence.
The impact of the glitch on Toyota’s sales and earnings is not yet clear, but analysts said it could be significant given the scale and duration of the disruption. Toyota is expected to announce its earnings results for the July-September quarter on Nov. 5.
