nSUPPLY CHAIN
Lessons Observed
Lessons Learned
By BETTY A. KILDOW, CBCP, FBCI
Last year’s devastating events in Japan were yet another reminder of the vulnerability of our business operations in general and most spe- cifically our supply chains. While
the full impact on organizations worldwide may never be known, there are lessons to be learned.
It is a fortunate truth that few organizations will ever experience the combined
direct impact of a black swan event like
Japan’s estimated 9.0 earthquake of March
11, 2011, the fourth largest in the world
since 1900. This was the resulting domino
effect with a sequence of multiple events
occurring in a relatively short period of time
… an earthquake, a tsunami, and nuclear
power plant damage and shutdowns.
Widely diverse industries including
automotive, computers, electronic components, industrial equipment, steel, textiles, and processed foods felt the effects.
A partial list of Japanese and global
businesses experiencing direct damage
and/or significant supply chain interruptions includes some of the world’s biggest and best known companies: Apple,
Canon Inc., Cosmo Oil Company, Fujitsu
Ltd., Honda, Mazda, Mitsubishi, Nissan
Motor Co., Oriental Land Co. (Disney),
Panasonic Corp., Sapporo Breweries Ltd.,
Sony Corp., Sumitomo Metal Industries,
Subaru, Suzuki, TDK, Texas Instruments,
Tohoka Electric Power Co., Tokyo Electric
Power Co., Tokyo Gas Company, Toshiba
Corp., Toyota Motor Corp., and Vopak.
Supply chain disruptions were far-reaching with transportation companies,
suppliers, tier suppliers, supply chain
strands, outsourcing companies, contractors, and customers all feeling the impact.
It is not only the international behemoths that suffered resulting losses,
though they are the expected focus of
most media reports. Coeli Carr’s article
“A Sake Story,” ( Portfolio.com March
17, 2011 http://www.portfolio.com/
business-news/2011/03/17/importers-
worried-about-sake-business-following-
japan-earthquake/#ixzz1VrZwLETJ)
reported the disruption and uncertainty for
a U.S. importer of Japanese sake and the
related impacts on U.S. importers, distributors, retailers, and restaurants, as well as
the Japanese distribution companies, sake
breweries, and rice growers.
As worldwide attention to the continuing
consequences continues to wane, in Japan
heightened concerns about nuclear power
are raising questions about whether some or
all 54 of Japan’s reactors could go off line
as a result of continuing fears. According
to Reuters, with nuclear power plants pro-
viding one-third of its power, “Japan could
face a power shortage of more than 9 per-
cent next summer if all its nuclear reactors
are shut down, media reported Wednesday
citing government estimates.”
No one invests in earthquake prepared-
ness and mitigation like the Japanese. A
system of bullet train trackside seismom-
eters detect a coming earthquake, causing
train operation controls to activate and
launch a shutdown command to trains that
reduce speed or bring the train to a rapid halt
based on earthquake acceleration levels.
Reports are that 27 bullet trains running
in the affected areas on March 11 avoided
derailment by applying emergency break-
ing 9 seconds before the shaking began, 70
seconds prior to the most violent tremors.
Infrastructure equipment has been
strengthened to withstand earthquake motion.
Japan’s undersea cables remained mostly
intact, allowing much-needed Internet com-
munication and response in many areas.
