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Technical Glitch Suspends Toyota's Japan Operations Until Wednesday

The logo of Toyota Motor displayed at a car showroom in Tokyo.

YUICHI YAMAZAKI/AFP via Getty Images

Toyota Motor Corporation (TM), slipped down 0.5% in early trading on Tuesday morning as it suspended operations across all 14 of its plants in Japan owing to a glitch in its production syst🦄em.

KEY TAKEAWAYS

  • A technical glitch has suspended operations in all of Toyota's plants in Japan, disrupting its supply chain.
  • While the cause is being investigated, the company does not suspect a cyberattack.
  • It is possible that one of its plants will become operational on Wednesday.
  • Since Toyota employs the just-in-time method for manufacturing, delay in the supply of parts halts production.

The 14 factories experienced a glitch that halted production and are expected to be back online by Wednesday. The plants in Toyota’s home country account for as much as a third of global production.💦 While the cause is under investigationꦓ, the Japanese auto giant does not suspect it to be a cyberattack.

The system malfunction prevented the company from ordering components, but the impact on output is unclear. In a domino effect, group firm Toyota Industries has also partially suspended operations at two engine plants.

The just-in-time production method, which requires components to be delivered just when they are needed, was pioneered by Toyota to reduce inventory costs. A disruption in its supply chain means the company does not have spare parts to continue production until the malfunction is resolved.

Last year, a cyberattack on one of Toyota's suppliers led to a system failure, forcing the auto company to suspend operations for a day. The disruption caused an output loss of roughly 13,000 cars. Toyota also had to temporarily halt production at some plants owing to a coronavirus lockdown in China's economic hub, Shanghai, in 2022.

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