Japan Earthquake: Global supply chains to suffer extensive disruption

Aftershocks to global economy expected to unfold slowly

03/24/2011


Organizations need to prepare for the possibility of an extended disruption to global supply chains resulting from the earthquake and tsunami in Japan, Marsh warned today. Thousands of multinational companies that rely on Japanese manufacturers for goods and services, as well as for sales, can expect significant global supply chain disruptions lasting up to several months.

Gary Lynch, Head of Supply Chain Risk Management at Marsh Risk Consulting, said: “Given that the immediate priorities in Japan are likely to be social not economic, the aftershocks to the global economies from this disaster may unfold very slowly; many of the economic consequences have yet to be seen. A multinational company whose supply chain could be impacted by the catastrophe should start now by assuming that its business is severely disrupted for an extended period and develop an effective mitigation strategy.”

Rather than the physical destruction of the production facilities, most of the supply chain disruption from this catastrophe is likely to be caused by issues associated with infrastructure, energy, utilities, transportation, and restrictions on highway/port access.

The most significant initial impact will be to the hi-tech, steel and auto industries quickly followed by those that depend on these industries such as medical devices, communications gear suppliers, car dealerships, solar, ship building, aviation and consumer electronics.

Mr. Lynch added: “This is yet another wake-up call for companies that have yet to strengthen the resiliency of their global supply chains. Despite substantial supply chain disruption losses from past events, many companies operating in the global marketplace continue to manage the risk of supply chain disruption ineffectively.

“Multinational companies need a thorough understanding of their supply chain, including the markets they sell to, the suppliers they rely on and the critical dependencies that exist along the supply chain. Effective planning can sometimes make all the difference whether a company survives or not.”

www.marsh.com

Marsh

- Edited by Amanda McLeman, Plant Engineering, www.plantengineering.com



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
The true cost of lubrication: Three keys to consider when evaluating oils; Plant Engineering Lubrication Guide; 11 ways to protect bearing assets; Is lubrication part of your KPIs?
Contract maintenance: 5 ways to keep things humming while keeping an eye on costs; Pneumatic systems; Energy monitoring; The sixth 'S' is safety
Transport your data: Supply chain information critical to operational excellence; High-voltage faults; Portable cooling; Safety automation isn't automatic
Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.

Maintaining low data center PUE; Using eco mode in UPS systems; Commissioning electrical and power systems; Exploring dc power distribution alternatives
Synchronizing industrial Ethernet networks; Selecting protocol conversion gateways; Integrating HMIs with PLCs and PACs
Why manufacturers need to see energy in a different light: Current approaches to energy management yield quick savings, but leave plant managers searching for ways of improving on those early gains.

Annual Salary Survey

Participate in the 2013 Salary Survey

In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.

Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.

2012 Salary Survey Analysis

2012 Salary Survey Results

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.