I read an article about worldwide supply chain problems caused by the Japanese earthquake and ensuing tsunami. This natural disaster destroyed ports that handle approximately 7% of Japan’s industrial output and damaged the electrical infrastructure. This disaster will have a global impact on the supply of high-tech components, especially semi-conductors, as well as, steel, polysilicon, and wafer material. South Korea seems to have the most to loss, as they depend on Japan for steel to support their shipbuilding industry, LCD glass, silicon wafers, and other materials for making semi-conductors. The impact of this disaster will also affect the U.S. solar energy business, the European car industry, and Japan’s auto industry.
This article illustrates how interdependent the countries of the world are in the manufacturing of products. One seldom considers the complexity of manufacturing an automobile, but the bill of materials for an automobile consists of thousands of items. The supply chain for these components spans the globe. Typically, automobile manufacturers only hold a few days inventory of components, so they are quickly dead in the water if the supplier cannot perform. It only takes one missing component to prevent the car from moving to the end of the assembly line. If a supplier’s business is severely damaged and no contingent suppliers are available, the automaker could experience long-term part shortages. This will eventually generate shortages for the consumer, which can cause the consumer to purchase a competitor’s product. It is ideal to have a contingency plan in place just in case the unthinkable happens.
http://www.reuters.com/article/2011/03/14/us-japan-quake-supplychain-idUSTRE72D1FQ20110314
I for one am in a state of shock over the Japan earthquake. The more I read the more, I am preplexed with all of the challenges and problems facing this country in the aftermath of the quake. Them I can hardly do more than shake my head in awe as I think about all the imacts and repercussions that will be felt worldwide.
ReplyDeleteMy first concern is for the people of Japan, and I pray for them and for their loved ones. What a horrible feeling to be so helpless.
I must be too wrapped up in my life and my job, because I never thought about all of the manufactured goods made in Japan that will impact my life. This article, like many others I have read over the last week, are clearly pointing out the global impact that major disasters have on us all.
It is absolutely unbelievable watching the news or reading the breaking headlines in regards to the devastation that has occurred in Japan. In first thoughts I did not think about the impact that this could place on the US, along with the rest of the world. The more I read, the more I think about all of the items manufactured in Japan, along with the impact for the surrounding areas in shipping and so on. My heart goes out to all those affected. Although this will greatly affect so many lives, including the impact we will see here, I am led to wonder how many businesses are also looking at this devastation as a great business opportunity for their companies.
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