Global chip shortage: As Toyota slash car production, industry must consider ERP innovation


The supply of cars is dropping radically as the global chip shortage truly makes itself felt. Historically, the industry has relied on a ‘just-in-time’ approach to buying car parts, procuring components from suppliers right at the moment they’re needed. This is designed to streamline production and eliminate the costs of keeping warehouses stocked. But, as automakers confront the lack of available chips, they need to be nimble and overhaul the way they get the electronic components that have become so critical to car design.

In order to do this, ERP systems, the heart of any manufacturing operations, need to be as agile as possible. However, according to research, data governance issues, complex hybrid IT environments, and outdated legacy technology are hurting almost 40% of manufacturers across the board. Therefore, manufacturers should look towards a cutting-edge composable ERP approach – giving them a flexible platform to bridge the gap between legacy, modern applications and applications used by their suppliers.