A look at how 'just-in-time' parts supply works

AP News
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Posted: Apr 20, 2012 5:34 PM
A look at how 'just-in-time' parts supply works

The auto industry's switch to a just-in-time delivery system saves money, but has left it vulnerable when parts supplies are interrupted by natural disasters, fires or other incidents. Here's a quick look at the system.

HOW IT WORKS: Automakers and parts companies schedule deliveries to assembly plants so parts arrive shortly before they are needed in cars and trucks. The system was pioneered by Toyota and copied by U.S.-based companies.

ADVANTAGES: Big stockpiles of parts cost a lot of money, and automakers can avoid the expense.

DISADVANTAGES: If parts plants are disabled by a natural disaster or fire, companies have few supplies on hand. Even a small part can stop automakers from producing cars and trucks. That can disrupt supplies to dealers and send customers elsewhere.