Many Japanese companies have long pursued lean inventories, but COVID-triggered supply disruptions made it harder to replenish their stocks and boost output to meet a recent recovery in demand.

Lean inventory turns into liability for Japan Inc.

Bottlenecks in supply chains force companies to rethink their strategy

YOHEI MATSUO, Nikkei staff writer

July 22, 2022 11:50 JST

TOKYO -- Corporate Japan's focus on low costs and lean inventories has won kudos worldwide for its efficiency, but what was once seen as a great asset has now turned into a big liability amid the supply chain disruptions caused by the COVID-19 pandemic.

With the easing of the pandemic, demand for a wide range of products has begun to rebound, but Japanese automakers and other manufacturers have been unable to boost production due to a lack of components and raw materials.