The era of treating suppliers as free warehouses is coming to an abrupt end. For decades, global manufacturing giants have optimized their balance sheets by pushing inventory and asset storage costs upstream to smaller subcontractors. However, a recent landmark ruling by the Japan Fair Trade Commission (JFTC) against Toshiba Group signals a definitive regulatory shift that will ripple through global supply chains in the US, Europe, and Asia.
This article analyzes the JFTC’s corrective recommendations regarding the forced free storage of manufacturing molds, places it within the context of global regulatory trends like the EU’s CSDDD, and explores how innovation leaders can turn compliance into a competitive advantage.
Why It Matters: The “Mold Management” Crisis
In late 2024, the JFTC issued corrective recommendations to two Toshiba subsidiaries—Toshiba Industrial Products and Toshiba Hokuto Electronics—for violating the Subcontract Act. The violation? Forcing 61 suppliers to store 1,993 manufacturing molds without compensation, despite having no future orders scheduled.
This is not merely a bureaucratic slap on the wrist; it exposes a systemic failure in traditional logistics and procurement strategies.
The Toshiba Incident: By the Numbers
The investigation revealed that Toshiba’s internal guidelines explicitly required suppliers to maintain molds for 2.5 years post-production without storage fees. This practice effectively offloaded logistics and warehousing costs onto smaller entities that lacked the leverage to refuse.
- Violator: Toshiba Industrial Products & Toshiba Hokuto Electronics
- Victims: 61 Subcontractors
- Assets: 1,993 Molds/Dies
- Root Cause: Internal “Cost Reduction” Guidelines vs. Subcontract Act Compliance
For global strategy executives, this serves as a warning. Regulatory bodies are no longer looking only at direct payments; they are scrutinizing “Scope 3” logistics costs—the hidden burden placed on the supply chain.
As discussed in our analysis of Japan’s New Logistics Law: Defining Shipper Responsibility, the definition of “shipper responsibility” is expanding. It now encompasses the entire lifecycle of entrusted assets, meaning ignorance of supplier burdens is no longer a legal defense.
Global Trend: The Fight Against “Bully” Procurement
While the Toshiba case is specific to Japan, the underlying friction—OEMs leveraging power to suppress supplier margins—is a global phenomenon. Regulators in the US and EU are simultaneously tightening the screws on supply chain fairness.
The Regulatory Landscape Shift
We are witnessing a convergence of global regulations aiming to protect the financial health of the lower-tier supply chain.
| Region | Regulation / Trend | Key Focus regarding Suppliers |
|---|---|---|
| Japan | Subcontract Act & Optimization Act (Jan 2025) | Explicitly bans “unjustified economic benefits” like free storage of molds or forced price reductions. Mandates fair logistics cost negotiation. |
| Europe | Corporate Sustainability Due Diligence Directive (CSDDD) | Requires large companies to identify and mitigate adverse human rights and environmental impacts, which includes “unfair purchasing practices” that drive suppliers to insolvency. |
| USA | FTC Supply Chain Resilience & Robinson-Patman Revival | The FTC is reinvestigating price discrimination and buyer power. There is a growing focus on how dominant buyers (like Amazon or Walmart) squeeze suppliers, impacting market competition. |
| China | Common Prosperity & Anti-Monopoly Law | Increasing scrutiny on large platforms and manufacturers abusing market dominance to squeeze SMEs, shifting power dynamics back to domestic manufacturers. |
The “Just-in-Case” Inventory Burden
The post-pandemic shift from “Just-in-Time” to “Just-in-Case” has exacerbated this issue. Companies want resilience, meaning they want safety stock and backup tooling available immediately. However, they rarely want to pay for the warehousing space required to store these assets.
In the US and Europe, this tension is leading to a rise in “Warehousing-as-a-Service” contracts where OEMs must explicitly book and pay for space, rather than burying it in unit costs. The Toshiba ruling reinforces that asset retention is a service, not a favor.
Case Study: BMW Group & Catena-X – Digital Visibility as the Cure
If the problem is hidden assets and unpaid storage, the solution is radical visibility. While Toshiba relied on static internal guidelines that ignored supplier realities, BMW Group is leveraging the Catena-X automotive network to revolutionize how assets and data are managed across the supply chain.
The Challenge
Automotive supply chains are notoriously complex. A single car requires thousands of parts, and consequently, thousands of molds and tools scattered across Tier 1, 2, and 3 suppliers. Traditionally, OEMs lose track of these assets, leading to the exact scenario Toshiba faced: “Zombie Molds” taking up space on supplier floors years after production ends.
The Innovation: Data Sovereignty & Digital Twins
Through the Catena-X data ecosystem, BMW is implementing a standard for data exchange that ensures transparency while respecting supplier data sovereignty.
- Digital Twins for Assets: Instead of a paper trail, valuable assets (containers, specialized racks, and potentially molds) have digital twins. This allows the OEM to see exactly where an asset is and its status (active, maintenance, or dormant).
- Collaborative Planning: Unlike the unilateral “2.5 years free storage” rule, Catena-X facilitates collaborative planning. If a mold is flagged as “End of Life” in the system, the disposal or return process can be automated based on pre-agreed smart contracts.
- Circular Economy Integration: BMW uses this visibility to reclaim raw materials. Molds are high-quality steel; by tracking them digitally, BMW can recycle them efficiently rather than letting them rust in a supplier’s warehouse.
The Result
By digitalizing the relationship, the ambiguity of “who pays for storage” is removed. The asset is tracked, its location is known, and the costs associated with it are visible. This transparency protects the supplier (who can prove usage/storage) and the OEM (who reduces legal risk and capital leakage).
Key Takeaways for Logistics and Strategy Leaders
The JFTC’s recommendation to Toshiba is a proxy for a much larger issue: The financial sustainability of the supply chain. Here are the strategic imperatives for 2025 and beyond:
1. Audit Your “Zombie Assets”
Do not wait for a regulator to knock on your door. Conduct an immediate audit of all tooling, dies, and molds stored at supplier sites.
- Action: If an asset hasn’t produced a part in 12 months, either pay a storage fee, repatriate it to your own warehouse, or authorize its disposal.
2. Decouple Unit Price from Logistics Services
The Toshiba failure stemmed from assuming storage was “included” in the part price.
- Action: Move toward “Cost Breakdown” models where piece price, tooling amortization, and logistics/storage fees are separate line items. This transparency prevents Subcontract Act violations.
3. Digitalize Asset Management (DX)
You cannot manage what you cannot see. Manual spreadsheets for mold management are a liability.
- Action: Invest in cloud-based Supplier Relationship Management (SRM) tools that track asset location and age. Automate alerts for “End of Production” to trigger disposal protocols immediately.
4. Legal Compliance is Scope 3 Resilience
Forcing suppliers to absorb costs weakens them financially. A bankrupt supplier cannot ship parts.
- Action: View compliance with acts like the Japanese Subcontract Act not as a legal burden, but as a strategy to ensure supplier solvency.
See also: Hacobu 2025 Report: Regulatory Pressure Drives Global DX – Understanding how regulatory pressure is the primary driver for DX adoption.
Future Outlook: The Rise of “Logistics Fairness”
The enforcement against Toshiba is just the beginning. As of January 2025, the Japan Fair Trade Commission and the Small and Medium Enterprise Agency have intensified their monitoring under the new “Optimization of Transaction Terms” guidelines.
We predict three major shifts in the next 24 months:
- AI-Driven Contract Policing: Regulators will begin using AI tools to scan standard supplier contracts for non-compliant clauses (like “indefinite free storage”).
- The “Right to Scrap”: We will see more industry standards (led by giants like Toyota and VW) that grant suppliers the automatic right to scrap tooling after a set period of inactivity unless the OEM starts paying storage fees.
- Virtual Inventory / 3D Printing: To avoid mold storage entirely for spare parts, OEMs will accelerate the shift to Additive Manufacturing (3D Printing). Instead of storing a physical mold for 10 years for a spare bumper, companies will store the digital file and print on demand, eliminating the logistics burden entirely.
The Toshiba case proves that the “hidden factory” of unpaid supplier services is closing down. The winners of the next decade will be those who treat their supply chain partners not as storage units, but as integral, fairly compensated extensions of their own enterprise.
