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Why Murata’s Plant Closure Did Not Disrupt Supply Chains

Previous OM in the News posts have discussed shortages of semiconductor chips caused by the leaning of supply chains. Supply chain disruptions of even a few days can lead to shortages if companies run too lean. During the pandemic, planning for supply chain disruptions has assumed increasing urgency.

Murata Manufacturing supplies about 40% of the world’s multilayer ceramic capacitors. MLCCs are used in everything from smartphones, appliances, cars, to data centers. The company closed its Fukui plant for the last week of August 2021 due to a COVID-19 outbreak among workers.

The plant closure caused less serious disruption to the company, because Murata had inventories on hand to meet customer demand. The company was also able to respond quickly and implement additional prevention measures, resuming production within a few days.

Video Spotlight:  

This post is based on the Seeking Alpha article, Murata Manufacturing: Positioning For The Longer Term, by Opal Investment Research, September 26, 2021; the Asia Nikkei post, Japan’s Murata temporarily shuts key plant due to COVID cluster, by Nikkei Staff Writers, August 26, 2021; and the YouTube videos in the Spotlight. Image source: pang_oasis/Shutterstock.

Discussion Questions:

1. How did the COVID-19 outbreak affect Murata Manufacturing from the perspective of lean operations?

Guidance: The COVID-19 outbreak forced Murata Manufacturing to close its Echizen plant in the Fukui Prefecture, disrupting the production of multilayer ceramic capacitors that are used in various electronic devices from smartphones to appliances to cars.  The production disruptions at Murata Manufacturing need to be eliminated to achieve a balanced system of lean operations.

2. How did Murata Manufacturing respond to its plant closure to achieve the ultimate goal of lean operations?

Guidance: The ultimate goal of lean operations is a balance system that requires production disruptions be eliminated.  As such, Murata Manufacturing intends to meet production short fall with inventories, and production from other plants in Japan and overseas.  It also plans to resume production quickly by implementing preventive measures such as vaccination, mask wearing, and social distancing.

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