In 2025, one export rule in China rattled the global automotive supply chain. Rare earth metals, used in everything from motors to sensors, weren’t being shipped on time. At the time, many production lines in the industry froze. But Daimler Trucks’ inventory strategy gave the company an edge.
Key Nuggets:
- Daimler Truck’s inventory strategy for its rare earth metals moved away from just-in-time to just-in-case after China imposed licensing delays on exports.
- The company stockpiled to shield itself from the same chaos that halted factories during the chip shortage of 2020 and 2021.
- Early action helped the company avoid downtime, even as other automakers shut production lines.
- African supply chains should draw clear lessons: build buffers for exposed inputs, diversify sourcing, and plan beyond pricing.
This article explains Daimler Trucks’ inventory strategy for rare earths, what it cost, and what it saved. Then it breaks down how supply chain professionals, especially in Africa, can use the same playbook to protect their operations before the next disruption hits.
The Backstory Behind Daimler Trucks’Rare Earth Metal Inventory Strategy
In April 2025, China suddenly started requiring export licenses for rare earth metals and permanent magnets. That move slowed approvals to a crawl and stalled shipments. But Daimler Truck saw a pattern.
Just a few years earlier, chip shortages had crippled its factories. And the company learnt the hardway that a $1 part missing from the bill of materials could stop a $200,000 truck. That hit hard.
Karin Rådström, Daimler Truck’s CEO, remembered the pain. She told reporters the chip crisis had made one thing clear: just-in-time couldn’t handle geopolitical delays. But that wasn’t just a theoretical statement. It was operational memory.
So, when rare earths were subject to the same kind of disruption, Daimler took proactive action.
Read More: Lessons From Flipkart’s Logistics Network Expansion in 2023.
How Daimler Truck Rewrote Inventory Rules For Its Rare Earth Metals
The company started holding more rare earth components in stock, specifically magnets and microelectronics that used neodymium and other metals from China. But it did not stop there. Semiconductors, which had burned the company before, also moved off lean scheduling.
Internally, procurement teams stopped thinking in weeks of supply and reviewed the acquisition of inputs that, if delayed, would idle lines. Those items got the buffer treatment.
However, the decision came with trade-offs. More inventory meant more capital tied up, warehouse space, and carrying costs. But it also meant the trucks kept moving.
As Rådström put it, “With everything that’s going on in the world right now, [holding more inventory] seems to be a good and necessary strategy.”
Read More: How Ferrari’s Supply Chain Beat the Semiconductor Shortage.
What Happened After The Shift in Daimler Trucks’ Inventory Strategy
First of all, something did not happen. And that was production outages.
As of mid-2025, while some Daimler Trucks’ competitors were halting production due to rare-earth delays, the company was operating seamlessly. The buffer worked, and it was by design, not luck.
Rådström said rare earth supply was still under watch, but the inventory build-up had bought the company time. That time meant the company could put more trucks on the road. And trucks on the road translated to revenue.
That goes beyond just control. It is resilience paid forward.
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Lessons From Daimler Trucks’ Rare Earth Inventory Strategy
It is easy to think that Daimler’s inventory strategy during the rare earth crisis was about changing its forecasting model. But the company went beyond that. It reframed how to treat risk in global sourcing.
Here are some key lessons from the episode:
1. Don’t Trust JIT With Inputs You Can’t Replace
Rare earths aren’t expensive. But when they’re missing, nothing works. And Daimler learned that the hard way during the chip shortage. When the same threat reappeared, this time with magnets, the company buffered up.
For planners and sourcing managers, this shifts the logic. Criticality beats cost. The $4 part that can hold up an entire production line should be stocked, not squeezed, especially during a crisis or potential crisis.
Read More: Lessons From IKEA’s Shipping Strategy During The Houthi Crisis.
2. Inventory Isn’t Waste When It Keeps Lines Running
There’s a cost to holding stock. Everyone knows that. But there’s also a cost to stopping production because of a missing part.
Daimler Truck saw the trade-off clearly. Holding a few extra weeks of strategic inventory costs less than shutting down a production line. Initially, it was a burden on the balance sheet, but ultimately, it kept factories running.
If your supply chain touches any regulated material, single-sourced item, or hard-to-ship component, you should be asking: what’s my buffer? And if the answer is zero, the next disruption might find you before your supplier does.
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3. History Isn’t Hindsight. It’s a Planning Tool
Daimler’s reaction was quick because its memory was long.
The company did not wait for rare earths to run dry. It looked at what happened with chips, remembered the losses, and adjusted early. That shift from reactive to proactive turned out to be the edge.
Smart companies treat past disruptions like drills. If your operation lost time in the last crisis and nothing changed, you’re still vulnerable. Always ensure to build from what burned you. That way, at least there is some profit to it.
4. Not Every Part Needs a Stockpile. But Some Do
Daimler Truck did not apply just-in-case to every bolt. It was a strategic decision because rare earths and semiconductors were at risk, not tires and mirrors.
That risk stratification is key. You don’t need to hold inventory for everything. But you need to hold it for what you can’t replace, reroute, or expedite. So, build stock where sourcing risk and shutdown risk overlap. That’s your coverage zone.
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How African Supply Chains Can Apply These Lessons
African markets don’t build long-haul trucks. But they source many of the same components. The risks are the same, and so is the need for action.
1. Build Buffers for Fragile Inputs
Start by asking questions like what small part can stop a whole operation?
Whether it’s an imported sensor, a circuit board, or a lubricant compound, identify what’s both crucial and sourced from abroad. Then hold extra. But please note that this doesn’t mean you warehouse everything. It means protecting what’s least flexible.
2. Spread Risk Across Multiple Sources
Daimler’s move was about inventory. But Volvo, one of its key competitors, looked at sourcing. It started dealing with miners, not just magnet suppliers.
African buyers can take the same approach. Don’t just buy from one importer. Build secondary relationships, even if they’re more expensive short-term. Resilience pays off when the boats don’t show up.
3. Push Closer to Local Capacity
Africa has its own rare earth potential. Projects in Burundi, Angola, and South Africa are building future export streams. But local manufacturers can’t wait for them to mature. In the meantime, more industries should assess what they can make locally to reduce dependence.
Even if the answer is modest, such as rewinding electric motors, assembling cables, or recycling certain parts, each step reduces exposure.
3. Build a Memory, Not Just a Fix
The next disruption won’t look like rare earths. It might even be a currency crash or a cyberattack. Whatever the case, you do not have to wait to act. Document what hurt your supply last time. Then change your planning cycle, your buffer rules, or your contract terms.
Daimler did this. That was why it kept moving when others paused. And you can do the same.
Obinabo Tochukwu Tabansi is a supply chain digital writer (Content writer & Ghostwriter) helping professionals and business owners across Africa learn from real-world supply chain wins and setbacks and apply proven strategies to their own operations. He also crafts social content for logistics and supply chain companies, turning their solutions and insights into engaging posts that drive visibility and trust.
